Recruiting and Hiring

The Tech Industry Is Preparing for Trump 2.0 by Not Preparing 

Big tech helped Trump win the election, but will small-medium tech reap the benefits?



Tech industry leaders are cautiously observing the early days of Donald Trump’s second presidency, with many adopting a wait-and-see approach rather than making immediate moves. While major players like Meta and Amazon have made significant overtures to Trump, small and midsize business owners are holding off on drastic actions until the new administration’s policies become clearer.
Trump’s 2024 campaign received strong support from Silicon Valley entrepreneurs and investors, many of whom saw an opportunity to gain influence by backing his reelection. Elon Musk, the world’s richest man, was a key figure in this effort, contributing over $250 million to Trump’s campaign. Musk has since become one of Trump’s closest advisors and is expected to play a major role in shaping the administration’s AI policies and deregulation efforts. While Musk has positioned his businesses for success under Trump, most tech founders lack his wealth and influence, leaving them to navigate the new administration with caution.
### Monitoring Regulatory Changes
Alon Yamin, founder of AI detection company Copyleaks (ranked No. 330 on the 2024 Inc. 5000), says his company isn’t taking specific steps to prepare for Trump’s presidency. Instead, like many others, they are focused on understanding how the administration will approach AI regulation and compliance. Before the 2024 election, smaller AI companies were concerned that overregulation could stifle innovation, favoring larger firms with dedicated compliance teams. However, Trump’s anti-regulation stance has eased some of these worries, with entrepreneurs now optimistic that AI development won’t be heavily restricted by federal policies.

Trump has pledged to repeal President Joe Biden’s AI executive order, which provided guidance for government agencies but had limited impact on private businesses. However, Yamin is concerned that without federal oversight, individual states might enact their own AI regulations, creating a patchwork of rules that could complicate operations for smaller companies. OpenAI has already proposed federal regulations to override state-level rules, highlighting the need for a unified approach.
### Tracking Tariffs on Semiconductors
Daniel Berlind, founder of Snappt (No. 41 on the 2024 Inc. 5000), shares Yamin’s cautious stance. His company, which uses AI to detect tenant fraud in contracts, doesn’t expect significant impacts from the new administration. However, one area of concern for many tech businesses is Trump’s proposed tariffs on imported goods, particularly semiconductors. A key campaign promise was to impose tariffs of up to 60% on Chinese imports, aiming to bring manufacturing back to the U.S.

The majority of the world’s semiconductor chips, essential for AI development, are produced by Taiwan Semiconductor Manufacturing Company (TSMC), which operates primarily in Taiwan and China. While TSMC is already building facilities in Arizona with funding from Biden’s Chips Act, Trump’s tariffs could disrupt the supply chain. Ben Harvey, founder of AI integration platform AI Squared, warns that while large AI companies like OpenAI and Musk’s xAI can absorb higher costs, midsize businesses, universities, and government agencies may struggle to afford the chips needed for AI development until domestic production scales up. “Chips will go to the highest bidder,” Harvey predicts, “and that’s likely to be well-funded companies with significant venture capital backing.”
### Musk’s Influence on Defense and AI
For some, Musk’s involvement in the Trump administration is a source of optimism. Brandon and Ryan Tseng, co-founders of defense tech company Shield AI, believe Trump’s presidency could streamline government contracting processes, making it easier for businesses like theirs to secure defense contracts. Shield AI develops autonomous systems for drones and fighter jets, and the Tseng brothers have been vocal advocates for reforming the Department of Defense’s procurement policies, which they argue are outdated and ill-suited for software-based innovations.

Brandon Tseng recently testified before the House Armed Services Committee, highlighting the need for the DOD to allocate more of its budget to AI-powered software. He argues that the current system, designed for hardware procurement, undervalues software and fails to adequately budget for AI services. With Musk’s firsthand experience in navigating DOD contracts, the Tsengs hope the new administration will address these inefficiencies and create opportunities for AI-driven defense technologies.
Despite concerns about Musk’s influence, many in the tech industry believe he will act in good faith. OpenAI CEO Sam Altman and Amazon founder Jeff Bezos have both expressed confidence that Musk won’t use his political connections to disadvantage competitors or unfairly benefit his own companies. Ryan Tseng views Musk’s collaboration with Trump as a positive development, stating that having an accomplished entrepreneur working with the president to drive efficiency and innovation is “a good thing.”
 A Cautious Optimism
Overall, tech business owners are approaching Trump’s second term with cautious optimism. While some, like Musk, are well-positioned to thrive under the new administration, smaller companies are closely monitoring regulatory changes, potential tariffs, and shifts in government contracting processes. For now, most are waiting to see how Trump’s policies unfold before making significant moves, hoping that the administration’s focus on deregulation and innovation will create new opportunities for growth in the tech sector.

President Donald Trump’s second White House stint is officially underway, and as evident in his inauguration’s guest list, it’s no longer contrarian for business leaders to support his administration. 

More than $1.3 trillion in combined net worth sat behind the Trump family at the Monday ceremony, according to Bloomberg calculations. Elon Musk, Jeff Bezos, and Mark Zuckerberg headlined the group, and the billionaire CEOs of Apple, Alphabet, and LVMH sat nearby.

“The golden age of America begins right now,” Trump said after being sworn in, adding that he would reverse the “American decline” catalyzed by the Biden administration. 

Some takeaways from his speech: 

  • Alluded to expanding U.S. territories with the phrase “manifest destiny”
  • Declared a national emergency at the southern border
  • Declared a “national energy emergency” and vowed to export more U.S. oil
  • He wants to make the U.S. a “manufacturing nation once again”
  • Aims to establish an “External Revenue Service” to collect tariffs from foreign sources
  • Declared the government will recognize only two genders, male and female
  • Declared the Gulf of Mexico will be renamed the Gulf of America

Notably, the 47th president inherits a country with annual inflation at 2.9 percent, unemployment at 4.1 percent, and stock and cryptocurrency markets hovering near record highs. Plus, GDP is currently trending at 3.1 percent.

Broadly, the economic landscape remains more robust than anyone predicted one year ago. 

Still, some economists—like the chief data-cruncher at the IMF—have warned that Trump’s policy mix of potential tariffs, tax cuts, and curtailed immigration could spur an inflation rebound. Others, though, point to his deregulatory bent as a reason to believe inflation will slow.

During Trump’s first term, he implemented tariffs on roughly $380 billion worth of products from U.S. trade partners and the impact was relatively muted. This time around, the president has floated higher across-the-board tariffs, though part of that is likely gamesmanship and negotiation. 

Among his proposals so far: 

  • A 25 percent tariff on Mexico and Canada
  • Gradually raising tariffs from 2 to 5 percent a month
  • Blanket 10-20 percent tariffs on all U.S. imports
  • A 60 percent tariff on goods coming from Chinese 

“The cost of higher tariffs include potentially higher prices for American consumers,” wrote strategists at Yardeni Research in a note Monday. “If tariffs lead to expanded capacity in the U.S., that could be disinflationary.”

It’s hard to know which, if any, of these will materialize. And even though some academics have voiced their concerns, Wall Street and business owners remain upbeat. 

As Opening Bell Daily has reported, equity strategists across big banks expect another strong year for the stock market, despite the mixed Fed outlook. The big banks themselves, too, expect business to boom as the White House eliminates red tape. 

The NFIB Small Business Optimism Index climbed in December to its highest reading since October 2018, with respondents reporting more hopefulness for the new administration versus the prior. Meanwhile, the share of business owners expecting the economy to improve surged 16 points from November to its highest since 1983.

“I stand before you now as proof that you should never believe that something is impossible to do,” Trump said. “In America, the impossible is what we do best.”