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Trump 2025 and Tech: Navigating Uncertainty and Opportunity

Author

Alpha
January 17, 2025

TECH IN THE NEWS

Green AI Initiative — Pres. Biden's new executive order allows AI companies to lease federal land for data centers with mandatory renewable energy requirements.

AI Defense Order — Pres. Biden is expected to sign additional executive order focused on software security and AI-powered defense systems.

AI Healthcare — Nvidia partnered with major healthcare institutions to accelerate AI-powered medical innovation across genomics, drug discovery, and clinical research.

Hindenburg Crashes — The influential short-seller research firm closes after seven years of exposing corporate misconduct at companies like Roblox and Nikola.

AI News Partnerships — Google partners with AP for Gemini news feed; OpenAI expands Axios pship to four new local AI newsrooms; Mistral teams up with AFP for Le Chat news in France.

COMPANIES TO WATCH

Replit — Despite halving headcount and relocating from SF, company's new AI "Agent" product helped drive 5x revenue growth according to CEO Amjad Masad.

Anduril — Defense startup doubled revenue to $1B, plans $100M tender offer for employee shares, and announced new weapons factory Arsenal-1 in Columbus, Ohio.

Synthesia — The Nvidia-backed AI video platform secured a $180M Series D with new backers NEA, Atlassian, WiL, and PSP Growth, raising its valuation to $2.1B.

Ndea — Ex-Google researcher and Keras creator François Chollet and Zapier founder launch a new AGI Research lab using deep learning & program synthesis.

THE HOTTEST THING IN TECH

Trump 2025 and Tech: Navigating Uncertainty and Opportunity

The year 2025 dawns with a mix of anticipation and apprehension. A new US administration takes office, promising a shift in economic and technological priorities. We are at a unique transitional point in the USA, experiencing a mix of trepidation, uncertainty, and even excitement about a potential resurgence of homegrown industry, with much of Trump’s MAGA focus expected to be on onshoring and reprioritizing domestic industry. The tech sector is anticipating the possibility of floods of VC money pouring in, channeled by figures like Elon Musk and other major tech leaders who will be present at the inauguration (including execs from most US big tech companies). 

We will at least know a lot more about the likely direction of this new regime by Monday when Trump’s much-anticipated Day one actions and orders are made. Here we explore some of the key news shaping this week’s lead up, including Trump’s potential TikTok stay of execution order, US crypto reserve rumors, macroeconomic headwinds and the likely tech trends, sectors and startups to watch this year.

This is a summary version of the full report we just published. Click here to read the full Trump 2025 Tech sector report featuring more original analysis on the current political, geopolitical and macroeconomic climate at the beginning of Trump’s tenure.

The Trump Transition’s Impact on Tech

“We're now having a healthy debate in America about what industries we want to keep, which supply chains are critical and where we should focus our trading relationships,"

— Kelly Ann Shaw, a trade adviser during Trump's first term

The incoming administration faces a challenging landscape. President Biden is using his remaining time to solidify his legacy with a series of executive orders, particularly in AI, security, and defense. This sets the stage for a potential clash with the new administration's stated policies, which include tightening trade restrictions and escalating curbs on AI and defense exports to China. 

One key area trending today is the incoming administration's stance on TikTok. After previously advocating for a ban, they are now expected to intervene to prevent it, signaling a shift towards finding a political solution, or possibly Elon Musk’s X purchasing the company as has been proposed by some in the Chinese administration in the US. This change in stance is underscored by the fact Trump has invited TikTok CEO Shou Zi Chew to the inauguration. 

Crypto is also making headlines this week as Trump is reportedly “considering” establishing a crypto reserve that would prioritize U.S.-based coins. Time to stack up on Dogecoin? This shift is being seen as very good news for US based crypto companies, and represents a shift from his previous stance of creating a bitcoin-focused strategic stockpile. Kalshi odds of a Bitcoin reserve still took a massive leap on this news and Bitcoin rebounded above $100K.

Economic and Market Volatility

While some in the tech sector are celebrating the potential for deregulation and a renewed focus on domestic industry, others are concerned about trade tensions and the impact on global markets as potential complications. This uncertainty is compounded by significant economic headwinds, including stock market volatility and concerns about overvaluation and another tech bubble, particularly in the AI sector. Several factors contribute to the current economic uncertainty:

  • Debt Concerns: There are concerns that the U.S. debt-to-GDP ratio is approaching 100%, which could lead to a bond market crisis, with the potential for bond vigilantes to drive up yields and trigger a recession. The yield on 10-year U.S. Treasury bonds has already risen substantially. Some experts believe that the bond market is the "boogeyman" to watch, raising concerns about a potential crisis and recession.

  • Market Volatility: The stock market has also shown signs of instability, with the S&P 500 and Nasdaq both experiencing declines. There are concerns that the market is overvalued, with some indicators suggesting a level of euphoria around AI and tech not seen since the dot-com bubble. This market exuberance is coupled with the anticipation of rising inflation and a potential slowdown in Federal Reserve interest rate cuts, further creating more headwinds in the markets. High and rising bond yields are putting pressure on equity markets.

  • AI Infrastructure Bottlenecks: A potential memory shortage could hinder further AI development, despite recent investments in chip manufacturing and data centers authorized in 2024 and this year by Biden, this will continue to be a challenge throughout the year. It will be interesting to see what solutions Trump and Musk have to this problem.

These factors raise questions about the sustainability of the current tech bull market and the potential for a sharp market correction. There are likely many on Wall Street and in the startup world waiting for a quick crash as the signal to cash heavy firms to finally deploy masses of capital into the next cycle banking on a fast v-shaped recovery and explosive growth akin to the covid-19 crash.

However, markets remain very different to 2021, we are in uncharted territory, and we must be prepared for the unexpected. Startups will have to navigate a complex and evolving regulatory landscape in 2025 as new policies are rolled out, making it a difficult period to plan and strategize. Times of transition often lead to market volatility and economic instability, so require a laser focus on sustainable growth and financial prudence. We expect to see investors return their focus to value investing rather than explosive growth in 2025. If played right, such transitional periods can also offer immense opportunities for investors and startups to thrive. 

Opportunities Amidst Uncertainty

Despite these challenges, technological advancements offer immense opportunities:

  • Convergence of Technologies: AI, robotics, and spatial computing are converging to create a "third industrial revolution" enabled by agentic AI and an associated deep tech explosion. At CES last week, Nvidia CEO Jensen Huang unveiled how close to reality this multi-trillion dollar mega industry is.

  • Scaling AI Infrastructure: Significant investments are being made to scale AI infrastructure, benefiting companies like Nvidia.

  • Agentic AI: AI tools capable of autonomous action are on the rise.

  • Space Race Escalation: Space exploration continues to advance, with companies like SpaceX and Blue Origin pushing boundaries.

  • Industrial Transformation: AI and automation are transforming industrial manufacturing.

  • Biotech: AI-driven advancements are driving innovation in sustainable fuels and bioplastics, drug discovery and material tech.

  • Fintech: The fintech sector is poised for a comeback, fueled by AI and blockchain technology.

  • Real Estate: AI is revolutionizing the real estate sector with automation and new ownership models.

  • Fighting Fire: AI-powered solutions are being developed to mitigate the impact of natural disasters.

  • Cybersecurity: The importance of cybersecurity continues to grow in an increasingly interconnected and AI powered world.

  • Cryptocurrency: The incoming administration's more favorable stance on cryptocurrency could boost the sector. 

What Trump 2025 Means For Startups & Investors

The tech startup landscape in 2025 presents both opportunities and challenges. AI remains a dominant force, but deep tech is also attracting significant investment.

Opportunities for Tech Startups:

  • Startups with strong AI-focused business models will thrive.

  • The demand for robust data infrastructure to support AI will drive growth and create opportunities in cloud computing, data security, and specialized hardware as well as alternative energy and quantum computing.

  • Deep Tech Ventures like Space, energy, and biotech offer long-term growth potential.

We will continue to monitor these trends and provide updates throughout 2025. At Tech Buzz, we're committed to bringing you timely and insightful content to help you navigate the future of tech. It's going to be a momentous year, so stay tuned!

We will be closely following these trends and providing you with updates throughout 2025. Some of our recent articles that may help you navigate this time:

Thank you for joining us on this journey. We are committed to being your trusted source for navigating the future of tech and beyond. It's going to be a big year so strap in for lift-off.

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