The Pulse #114: What does Trump’s win mean for Tech?
The Pulse #114: What does Trump’s win mean for Tech?
More influence for Musk and VCs, potentially reversing Section 174, pro-crypto, uncertainty for Big Tech, and more. Also: a third embarrassing security issue for Okta in two years
The Pulse is a series covering insights, patterns, and trends within Big Tech and startups. Notice an interesting event or trend? Send me a message.
This issue focuses on the US election result, and there’s no Industry Pulse for one week only. In this issue:
What does Trump’s win mean for the tech industry?
Yet another bizarre Okta security vulnerability
Let’s get into it!
1. What does Trump’s win mean for the tech industry?
On Tuesday, the US elected Donald Trump as president for a second time, defying pollsters who failed to predict his decisive victory, with the Republican party also taking control of the Senate. Based on what we know about Trump and the party he leads, we can look for some clues about the coming near-half decade of his administration’s impact on the US tech sector.
Elon Musk, a16z, and VCs bid for influence
One of the biggest Trump supporters – both in publicity and money terms – is Elon Musk. Other prominent venture capitalists who campaigned for Trump include a16z founders Marc Andreessen and Ben Horowitz, and venture capitalist, Peter Thiel. It is all but certain that these groups will have a say in shaping national tech policies. Expect these groups to lobby on issues such as:
Less antitrust for acquiring tech companies: VCs will most certainly be lobbying to allow Big Tech companies to acquire VC-funded startups without regulatory scrutiny, which is in the interest of venture capitalists by opening up more exit paths. The FTC’s blocking of Adobe’s $20B acquisition of Figma in 2023 led to large tech companies “poaching” founders and key employees from AI startups – like Google essentially acquihiring Character.ai, Microsoft basically acquihiring Inflection AI, and Amazon doing a “talent raid” with AI startup Covariant and Adept AI.
AI regulation: Elon Musk has a large stake in xAI, and could push to stop any AI regulation which doesn’t make it harder for newer entrants to enter. Other players like OpenAI and Anthropic will likely lobby for regulation that doesn’t impact their business.
Will Trump reverse his Section 174?
A Trump administration in full control of the Senate creates an opportunity to reverse Section 174; a piece of regulation that is making US tech companies less competitive, globally. In short, under this rule, software engineering salaries cannot be expensed as a cost as in other countries; they must be amortized over 5 years, or 15 years when employing software developers abroad. We cover more in a deep dive.