The tech industry is already seeing the impact of its investments in the new administration. Following donations to the campaign, a flurry of directives are relaxing regulations and dropping lawsuits that should benefit cryptocurrency, AI, and social media companies.
A key player in these shifts is Elon Musk, the world’s wealthiest individual. Federal agencies under the president’s purview have withdrawn legal challenges against his SpaceX company and the largest U.S. cryptocurrency exchange. Further solidifying this new approach, the White House issued a “deregulatory initiative” aimed at easing tech sector regulation, specifically empowering Musk’s Doge initiative.
Musk, who has several tech companies that have been sued by federal agencies, invested nearly $300 million in the President’s re-election campaign. He now directs the Department of Government Efficiency (Doge), tasked with reducing federal spending and regulations. These moves align with a pattern of friendliness towards the tech industry and its leaders.
This friendliness was evident in the recent decision by Coinbase, which announced the Securities and Exchange Commission (SEC) planned to dismiss its lawsuit against the cryptocurrency exchange. The Justice Department also dropped its discrimination case against SpaceX the same day.
Furthermore, regulatory safeguards regarding artificial intelligence are being cut, despite concerns from Silicon Valley CEOs who deemed them burdensome. The body that tests the safety of advanced AI models is bracing for layoffs. Two weeks prior, a previous executive order by Joe Biden designed to ensure AI safety was rolled back by the White House.
Alongside Musk, other tech CEOs, including Apple’s Tim Cook, Amazon’s Jeff Bezos, Google’s Sundar Pichai, Meta’s Mark Zuckerberg, and OpenAI’s Sam Altman, have also cultivated relationships with Trump. They all contributed $1 million to Trump’s inaugural committee and have had private meetings.
Observers like Gautam Hans, law professor and director of the Civil Rights and Civil Liberties Clinic at Cornell, noted the shift in attitudes, saying it’s a reflection of a desire for more favorable treatment and a long-term conservative stance on deregulation.
Coinbase, for example, donated $1 million to Trump’s inaugural fund a month prior to the SEC dropping the case against it. The cryptocurrency industry broadly supported Republican candidates, and Trump’s re-election saw crypto prices surge.
Paul Grewal, Coinbase’s chief legal officer, wrote in a blog post that the decision to dismiss the SEC suit against Coinbase “righting a major wrong.” The SEC had sued Coinbase in 2023, claiming the exchange traded 13 tokens that should have been registered with the SEC as securities.
Experts predict the establishment of a crypto task force within the new administration’s SEC will possibly reverse previous policies and related cases. Public Citizen, a consumer protection advocacy group, views this as proof that the crypto industry’s political spending has paid off. The organization stated that withdrawing the lawsuit “is a massive gift to the industry.”
On Wednesday, Trump signed an executive order, a “deregulatory initiative,” that aims to reduce regulations aligning with Musk and Doge’s goals. The order will, according to the White House, “commence the deconstruction of the overbearing and burdensome administrative state.”
The order states that Doge, along with the Office of Management and Budget director, will “rescind unlawful regulations” through a review process within a 60-day timeframe. This list includes regulations that give too much power to Congress, impose considerable costs on others, and hinder tech innovation.
Silicon Valley has long objected to federal regulations related to anti-competitive, monopolistic behaviors, and labor and consumer safety standards. Google, Apple, and Meta have been sued in antitrust and discrimination cases by the Justice Department; similar cases have been filed by the Federal Trade Commission against those companies, and also Amazon, Uber, and Snapchat.
Daniel Walters, a law professor, questioned the legality of the new deregulatory executive order, citing the Administrative Procedure Act.
Administration officials have repeatedly indicated that they believe prior administrations over-regulated the technology industry. Vice-President JD Vance, at the Global AI Action Summit, emphasized “AI opportunity” over “AI safety.”
The administration intends to gut the guardrails surrounding AI development put in place by the previous White House. Shortly after taking office, Trump rescinded a sweeping AI executive order, calling it a “barrier to American leadership in artificial intelligence.”
The National Institute of Standards and Technology, which establishes safety and reliability standards, is facing layoffs, according to reports. The AI Safety Institute (AISI) within NIST, created in response to the previous AI executive order, is especially concerned about layoffs.
Alexandra Reeve Givens, CEO of the Center for Democracy and Technology, states eliminating the AISI would “undermine efforts” to ensure that AI tools are safe.
While the new administration has shown favoritism towards the tech industry, regulators are using threats against tech CEOs who distance themselves from the new president. Andrew Ferguson, the new chair of the Federal Trade Commission, launched an inquiry into “big tech censorship” on Elon Musk’s X platform.
