Donald Trump’s return to the White House is set to reshape the artificial intelligence industry, according to research from Deutsche Bank, whose analysts outlined five major shifts in approach that could impact both businesses and national security.
Diverging sharply from the Biden administration's policies, the president-elect's relationships with tech leaders such as Elon Musk, a vocal supporter and financial backer of his campaign, could give Silicon Valley a direct influence on policy.
Musk, who contributed over $130 million to Trump’s election and Republican candidates, is expected to play a significant role, with his proximity to the former Apprentice star likely enabling him to influence regulations that impact the industry. Deutsche reckons.
Tech titans to hold sway
Ties to other influential tech figures, including investors like Marc Andreessen and venture capitalist Peter Thiel, signal that Silicon Valley could hold a privileged position in discussions on AI development.
Safety regulations may also see a rollback, as Trump has pledged to repeal Biden’s AI safety mandates, which he sees as overly restrictive.
Under Biden, the AI sector saw a push for ethical standards and guidelines to mitigate risks.
Trump, however, has framed these measures as stifling innovation and has vowed to replace them with policies he claims will promote “free speech” and “human flourishing”.
Deregulation to help the 'scrappy'
Deutsche anticipates that this deregulation could spur growth for smaller “scrappy” startups, which could gain a competitive edge over larger firms traditionally favoured by stricter regulation.
Regulatory attitudes towards AI firms are also expected to become more business-friendly under Trump, according to Deutsche.
His administration is likely to ease the enforcement of antitrust laws that previously targeted tech giants, including lawsuits and investigations into companies like Google, Meta, and Amazon.
While Deutsche notes that certain ongoing lawsuits are unlikely to be dropped, it foresees a potential softening of rules for future mergers, potentially easing the regulatory hurdles faced by growing AI firms.
The chip manufacturing industry, essential to AI technology, could also see substantial shifts.
CHIPS reboot?
Trump has criticised the bipartisan CHIPS Act, which provides billions in subsidies to companies setting up semiconductor operations in the United States.
He has specifically questioned the role of Taiwan’s TSMC, one of the main beneficiaries, and has argued that American firms like Intel should receive more support to lessen US dependence on foreign chipmakers.
Deutsche Bank expects this preference for domestic producers could lead to further incentives for U.S. companies while limiting benefits for international firms.
Finally, security concerns surrounding AI are expected to become a key focus of Trump’s administration.
During his previous term, he initiated measures to restrict China’s access to advanced semiconductor technologies, a stance that Biden extended.
Deutsche predicts that Trump’s administration will intensify these restrictions to safeguard American technological advantages and national security interests, especially as AI becomes increasingly tied to military and defence applications.
Analysts believe this will lead to heightened scrutiny of AI tools and software, particularly in cases where they may serve dual civilian and military functions.