3 Tech Sectors to Boom Under Trump 2.0 – And 2 Likely to Bust

Less than a month before inauguration day, tech is bracing for big changes. Donald Trump returns to power with a stronger electoral mandate and unburdened by the cautious voices he blames for hindering his previous term in office. If the President-elect gets his way, Washington will be run by a counter elite that includes tech’s richest man – co-helming a new crypto-themed agency designed to root out government waste.

An America-first ethos, hostility to regulation, and tighter security at the border will guide policies. Trump also wants Big Tech firms like Meta brought to heel in areas like content moderation, eliminating the strictures on speech that saw him booted off Twitter in January 2021.

Who will be tech’s biggest winners and losers under Trump 2.0? Let’s consider the evidence.

Table of Contents Table of Contents

1. Key Takeaways
2. Embracing the Techlash
3. 3 Tech Sectors Likely to Boom Under Trump 2.0
4. 2 Tech Sectors Likely to Bust Under Trump 2.0
5. Didn't See That Coming
6. The Bottom Line
7. FAQs
8. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Embracing the Techlash
3. 3 Tech Sectors Likely to Boom Under Trump 2.0
Show Full Guide
4. 2 Tech Sectors Likely to Bust Under Trump 2.0
5. Didn't See That Coming
6. The Bottom Line
7. FAQs
8. References

Embracing the Techlash

When Donald Trump reoccupies the White House next year, he will assume regulatory control over a tech industry that was different from what existed during his first term. Washington’s love-in with Silicon Valley looks to be over, and the relationship between government watchdogs and tech CEOs is much more arms-length. The Biden-era SEC has been decidedly crypto-skeptic, and antitrust officials have taken some of the biggest steps towards reining tech monopolies since the AT&T breakup in the 1980s.

BREAKING: Meta removes Trump account restrictions ahead of 2024 election
Meta on Friday said it would soon roll back restrictions it placed on former President Donald Trump's Instagram and Facebook accounts, @SaraFischer reports for @Axios.

Why it matters: The company said it… pic.twitter.com/UoKTcvZYlm

— Benjamin Ryan (@benryanwriter) July 12, 2024

Tech leaders seem to have got the message:

• Meta chief Mark Zuckerberg signaled a vibe shift that was underway last year when he embraced MMA and traded in his muted sweatshirts and hoodies to look for a new ripped physique. He recently donated $1 million to Trump’s inaugural fund.
• Amazon’s Jeff Bezos stopped the Washington Post from endorsing Democrat candidate Kamala Harris.
• Tesla/Spacex/X owner Elon Musk actively endorsed Trump throughout the election campaign. Musk is now one of his closest advisors and will head up the new DOGE government waste watchdog alongside small-state firebrand Vivek Ramaswamy.

All in all, it looks to be a tumultuous and unpredictable four years for tech. No matter the ambition of Trump’s plans, he must have the courts and Republican-led Congress on his side. That said, the policy direction that took shape during the campaign and the priorities Republicans committed to during the 2022 Mid-term elections suggest some clear winners and losers.

3 Tech Sectors Likely to Boom Under Trump 2.0

1. Cybersecurity

A focus on restricting immigration and more effective policing of America’s borders, plus a renewed push to take on Chinese and North Korean hacking, means companies in the cybersecurity space are likely to benefit. Surveillance firms like Palantir – owned by Trump supporter Peter Thiel – can expect their services to be in high demand as new Border Czar Tom Holman looks for better tools to detect and stop illegal immigration.

Cyber was a priority in Trump’s first term when he gave the U.S. Cyber Command prominence and introduced Washington’s first national cybersecurity strategy in over a decade. Expect the same emphasis next year with a renewed push by CISA to protect critical infrastructure from strategic adversaries like Russia and Iran. Execution will be shaped by Trump’s combative relationship with the intelligence community (see: Deep State), which could see security workloads shift away from state agencies and toward private firms.

2. AI

Trump’s campaign manifesto included a promise to repeal a 2023 executive order by the Biden administration to de-risk the development of AI. Trump labeled the order’s testing standards and anti-discrimination guardrails ‘radical and left-wing.’ He’ll now likely preside over a less constrained artificial intelligence industry that’s free to deprioritize AI discrimination safeguards and worry less about transparency in its use of training data, areas that Republicans have criticized as examples of government overreach.

Given his investments in Grok, it’s safe to assume Elon Musk will want a say on AI policy. Musk has criticized the behavior of firms like OpenAI and supports ‘safe AI’ legislation like California’s failed bill SB 1047. He also called for a freeze on major AI developments to “protect society.”

With Trump’s approach to addressing the copyright concerns surrounding generative AI still TBD, Musk and other AI executives will want to influence how Trump sees the issue.

3. Crypto

During the election campaign, Trump was a vocal supporter of cryptocurrencies and digital asset deregulation, distancing himself from opponent Kamala Harris’s near silence on the issue. He went on to make major overtures to the industry, addressing a standing-room-only crowd at the 2024 Bitcoin Conference and securing the backing of the Fairshake crypto super PAC, which includes prominent crypto investors like Marc Andreessen and Ben Horowitz among its major donors.

The industry could now get a late Christmas present when Trump likely pink-slips current Securities and Exchange Commission Chair Gary Gensler, a vocal crypto critic, dragged his heels on approving spot Bitcoin ETFs.

Expect more permissive and hands-off rule-making by the future SEC chair, especially if Trump follows through on his call to make America a “Bitcoin superpower.”

2 Tech Sectors Likely to Bust Under Trump 2.0

1. Electric Vehicles

Flipping to the negative side of Trump’s policy ledger, EV companies could be an early victim. Despite Elon Musk’s many appearances on the campaign trail, Trump has been consistently anti-electric vehicle, saying he would ‘stop electric vehicle mandates on day one,’ called EV subsidies ‘a gift to China’ that hurt American auto workers, and declared that EVs ‘don’t work.’

Those mandates, written into the Biden Administration’s Inflation Reduction Act, include incentives for US EV production, such as tax credits for manufacturers and other incentives for battery factories and lithium mining. That would mean Musk’s Tesla – America’s largest EV company could lose a source of funding.

However, in a July earnings call, Musk told analysts that losing the subsidy would “probably benefit Tesla” in the long term, as it would impact rising EV competitors more.

2. Renewable Energy & CleanTech

Regarding energy policy, Trump has promised to ‘drill baby, drill’ and unleash American energy, which, for him, means oil and natural gas. His picks for key government energy posts suggest that Trump 2.0 will be keen on fossil fuels and support America’s traditional energy sector. He’s also dismissed climate change as a hoax. Suffice it to say that advancing the renewables transition won’t be a priority for this administration.

That’s bad news for firms in solar, wind, and associated cleantech categories like renewable energy trading platforms – all of which benefit directly or indirectly from subsidy and/or favorable regulation. What happens to these firms if state support is swept away? With uncertainty around the coming recalibration of the U.S. energy sector, renewable generation projects looking for backing may well find that investors are hedging their bets – at last for the time being.

Didn’t See That Coming

While the Supreme Court considers TikTok’s request to overturn its U.S. ban, the embattled Chinese social media platform may get a reprieve once Trump takes office. Despite favoring a ban during his first term, Trump looks to have changed his mind. Following a meeting with TikTok investor (and Republican party donor) Jeff Yass earlier this year, he came out against a bipartisan move that would force owner ByteDance to choose between selling TikTok or seeing it banned in the U.S. entirely.

In a post on Truth Social, he said getting rid of TikTok would mean “Facebook and Zucker(berg) will double their business.” The bill passed, but Trump seems committed to the pro-TikTok camp. He pledged to undo the ban, which could see the popular app burst back to life in its biggest global market.

The Bottom Line

As Inauguration Day nears, tech watchers are straining their necks to see what category booms and busts might lay ahead. Yet predicting political outcomes is a mug’s game – as the multiple election polls showing Kamala Harris on track to become the next US president amply attest.

im crying Donald Trump is so unserious, someone recorded him working at McDonalds and he said “I’ve now worked 15 more minutes than Kamala” 😭 pic.twitter.com/3JzGNSQp04

— ryan 🤿 (@scubaryan_) October 20, 2024

Could anyone have foreseen the bizarre chain of events – lawsuits, convictions, assassination attempts, a meme-tastic shift at a McDonald’s drive-thru – that defined Trump’s winning campaign? The only certainty is more uncertainty. Tech leaders claim to love disruption; well, they’ve got it in spades.

The industry can expect a highly-disruptable next four years.

FAQs