Why Trump’s Victory Will Spur Tech Deals, Ease Scrutiny on AI and TikTok | Analysis

The tech world is largely rejoicing after Donald Trump was elected again this week, and that excitement can be reduced to this: less regulation, more deals.

“We expect Big Tech to play more offense in terms of M&A,” Morningstar analyst Dan Romanoff said in a note to clients. “From an M&A perspective, we believe a Republican-led Washington to be the best-case scenario for Big Tech companies, as it will allow them to flex their M&A muscle.”

In notable contrast to Hollywood, CEOs from the biggest tech companies one by one offered their congratulations to the president-elect after his surprise victory on Tuesday.

“Congratulations to President Trump on a decisive victory,” Meta CEO Mark Zuckerberg wrote on Threads. “We have great opportunities ahead of us as a country. Looking forward to working with you and your administration.”

Amazon founder and Washington Post owner Jeff Bezos tweeted his warm embrace of Trump the night of the election:

Several other analysts who spoke with TheWrap agree the water just got warmer for Big Tech under Trump. Investors are already betting on it too, with Apple, Facebook parent Meta, Tesla and Google parent company Alphabet all seeing their shares make healthy gains on Wall Street following the election. The bet is that the near-certain exit of FTC chairwoman Lina Khan will help grease the wheels for more mergers.

“Big tech has been in a period of tighter regulatory scrutiny, which alongside a profit focus, has chilled investment and acquisitions,” Omdia analyst Seth Wallis-Jones told TheWrap. “We identified 52 acquisitions by the major U.S. consumer platforms in 2021 and just five so far in 2024. Participation in investments by platforms has also halved, despite the AI boom.”

But the optimism goes beyond dealmaking.

A second Trump presidency will affect a number of burgeoning industries, including cryptocurrency and artificial intelligence — a topic that has been hotly debated in Hollywood this past year. Crypto executives were instrumental in boosting Trump, and crypto stocks and Bitcoin saw double-digit upward spikes the day after the Trump win.

Trump could also play a role again in whether TikTok is booted from the U.S. Similarly, the distaste Trump showed in his first term for Section 230, a law that gives platforms like Facebook legal immunity against being sued for what its users post, has again been pushed to the forefront — and might explain why tech execs like Zuckerberg have been courting Trump in recent months.

TikTok

Trump’s election may not have much of an impact on the pending TikTok ban. The reason: TikTok’s ban date, if it’s unable to sell its U.S. operations to a non-Chinese company, is Jan. 19. Trump is set to be inaugurated on Jan. 20.

If the ban date is pushed back at all, that’s where things could get interesting. Trump’s feelings towards the uber-popular app have shifted in recent years. He pushed for its ban during his first term, signing an executive order in 2020 calling for its U.S. operations to be sold off. (The app, he argued, was a national security threat because TikTok’s parent company, ByteDance, is obligated to share user data with China’s communist government.)

He’s changed his tune since then and even joined TikTok in June, saying it was an “honor” to be on the app. His use of the app, coupled with his appearances on several podcasts, may have influenced his strong performance with younger voters.

Trump won 55% of the 18-29 vote, compared to 42% for Harris, based on exit poll data. If the app’s ban is pushed back to sometime during his presidency, Trump may lean into his dealmaking background to try and keep it around. He was in favor of TikTok selling its American business to Oracle in 2020, for example.

Artificial intelligence

Compared to Kamala Harris, analysts expect Trump to be less focused on curtailing the fast-evolving artificial intelligence industry.

“Trump’s administration is taking more of a hands-off approach with AI, which I think will spur more investment into the industry and allow these companies to grow a lot quicker,” Brett Sifling, a director with Gerber Kawasaki Wealth & Investment Management, said.

Romanoff, in a recent note to clients, was similarly bullish on AI under Trump. “We expect more deal activity in the AI space by large technology incumbents,” he said.

Harris was the driving force behind a 2023 executive order on the “safe, secure and trustworthy development and use of AI,” and she’s made other comments on establishing AI guidelines. The vice president also brought in the heads of OpenAI, Microsoft and Google and got them to agree to voluntary safety standards.

Trump, analysts predicted, will take a less rigorous approach to the industry. The wild card aspect of this, though, is the president-elect’s relationship with Elon Musk, the world’s wealthiest person and a critic of AI companies like OpenAI.

Musk has been one of the more vocal skeptics of AI in the tech world — even as he’s leading companies like Tesla that are major AI players. He’s concerned with a potential “alignment” issue between AI and humans, where the machines aren’t doing exactly as they’re told.

“[AI is] most likely going to be great,” Musk said last month. “There’s this sub chance, that could be 10% to 20%, that it goes bad. The chances aren’t zero that it goes bad.”

There’s a chance Trump, after talking to Musk about the dangers of rogue AI, may introduce his own safety guidelines for the industry.

In the meantime, some of the big AI players have started to seek a warm relationship with the new Trump administration.

“Congrats to President Trump. I wish for his huge success in the job,” OpenAI CEO Sam Altman posted on X. “It is critically important that the U.S. maintains its lead in developing AI with democratic values.”

Elon Musk

Musk has been President-elect Trump’s biggest public supporter, both in terms of his cheerleading on X, the social platform he owns, and in financial terms, with the billionaire pouring $119 million into getting Trump back to The White House.

His faith is already being rewarded financially, with Tesla’s stock price surging 14.75% on Wednesday.

Sifling said a Trump presidency is good news for Tesla shareholders, since Trump is likely to roll back a lot of electric vehicle incentives. That may seem counterintuitive, but Sifling said that Tesla, because of its lead over the rest of the industry, is actually poised to benefit.

“That really bodes well for Tesla, since they’re so far ahead of the competition that they’d be able to handle those ups and downs,” Sifling explained. “Where other EV makers that are still trying to get started are obviously going to be hurt if they don’t have access to those incentives right away.”

Similarly, Trump putting tariffs in place would also benefit Tesla, Sifling noted.

“If he does enact a lot of these tariffs that he’s talking about, you can imagine that a lot of them are going to be on Chinese EV makers right into the U.S., which was a huge competitor for Tesla moving forward,” he said. “If you knock both of those things out, the future looks a lot brighter for Tesla.”

Musk’s other companies are also well-positioned now. SpaceX, his rocket company, has faced blowback in California for Musk’s pro-Trump stance in recent months — something that even Democratic Gov. Gavin Newsom said has gone too far. With Trump in office, Musk is less likely to feel pressure from regulators, at least at a federal level.

Veteran tech reporter Kara Swisher, in a series of Threads posts Wednesday, said to watch for Musk merging X with Truth Social, Trump’s social app. Musk, she said, will then look to take the new company public.

Altogether, it’s easy to see why fellow Trump supporter Peter Thiel said he’d “never bet against” Musk back in 2015. Musk’s own bet on a second Trump presidency just came to fruition.

Regulation and M&A

Analysts expect the next Trump administration will have a more laissez-faire attitude towards regulating Big Tech, especially when it comes to mergers.

Wedbush analyst Dan Ives told TheWrap the reason for that is simple: FTC chairwoman Khan will likely be fired by Trump, if she doesn’t resign by the time he reenters The White House.

“The biggest thorn in the side of tech in the last 20 years is Lina Khan, and her days are now numbered,” Ives said.

President Joe Biden appointed Khan in mid-2021. The commission, under her guidance, has scrutinized a number of tech heavyweights, including Microsoft, Amazon and Nvidia.

Romanoff outlined how aggressive Khan has been, relative to prior regulators.

The proportion of deals that received consent from the Justice Department and FTC has gone from an average of 70% in 2011-20 to 32% in 2021-24, Romanoff said. “Conversely, the proportion of deals either being abandoned or facing regulatory complaints has skyrocketed,” he added.

The DOJ, meanwhile, has been looking at breaking up Alphabet, Google’s parent company.

Ives said he expects the Justice Department to continue looking into Google, but in general, “the tone won’t be as sharp” for Big Tech under Trump.

Analysts believe Trump’s removal of governmental red tape will spur more M&A activity.

Wall Street clearly saw Trump’s election as a boost to tech companies overall, with companies like Google and Microsoft seeing their shares jump on Wednesday and Thursday, with the three big stock indexes climbing overall.

“There’s an anti-tech part of him,” Ives said about Trump. “But overall, compared to Harris, this is a champagne and lobster roll scenario from the perspective of The Street.”

Crypto

Bitcoin, as it became apparent on election night that Trump was heading towards victory, raced to a new all-time high north of $74,000. That’s not too shocking considering Trump’s crypto-friendly stance in recent months.

Trump has said he’ll create a “bitcoin and crypto presidential advisory council” where “the rules will be written by people who love your industry, not hate your industry.”

At a crypto conference in Nashville in July, he said the government will be focused on acquiring more bitcoin, rather than offloading what it has. “For too long our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said.

Those comments, Sifling said, add to one other reason he’s viewed as “crypto-friendly” — he promised to get rid of Gary Gensler. Trump has said he’ll get rid of the Biden-appointed head of the SEC, on “day one.” Gensler has been tough on the industry. He’s brought more than 100 actions against crypto companies since taking office.

It’d be tricky to remove Gensler. As Axios reported, the SEC chairman typically resigns with a change in administrations, but there are legal ways for Trump to fire Gensler if he ends up sticking around. One way or another, Ives said he expects crypto regulation to wane drastically under Trump.

“[Anything] regulatory goes out the window, by having one of the most pro-crypto politicians, you could argue, in the world now as president,” Ives said. “As a crypto bull [myself], it’s a Cinderella story, Trump becoming president.”

Section 230

Section 230 of the Communications Decency Act is the broad legal shield that gives companies like Facebook and X the ability to moderate content however they want. 

It’s been criticized by politicians on both the left and the right in recent years — and that includes sharp criticism from Trump.

“Trump has made it clear that Section 230 is a favorite target of his,” Eric Goldman, a law professor and head of the High Tech Law Institute at Santa Clara University, told TheWrap.

In May 2020, Trump signed an executive order aiming to rollback Section 230 protections for companies like Facebook and Twitter, who he was upset with over their censorship decisions. The Biden administration later revoked Trump’s executive order.

Goldman said he wouldn’t be surprised to see Trump aim to curtail Section 230 again. This would be a misstep, Goldman said, because it would hold platforms legally liable for what its users say — something that would drive up legal costs and reduce investment in the next wave of social apps.

“We’re reaching the end of the User Generated Content Era online, where people are talking to each other. The repeal or gutting of Section 230 will drive most players out of that industry. It’s just not profitable,” Goldman said.

“At best,” he added, “we have a major market consolidation with a few large incumbents and very little startup or entrepreneurial activity in the area.”

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