Trump is breaking up with the tech bros, here's why

Telegraph

a day ago

As Elon Musk steps down from his role at the White House, there are signs Donald Trump's love affair with Silicon Valley could be on the rocks.
The president sailed to election victory in November buoyed up by a wave of support from tech billionaires.
But as his America First measures on immigration, university funding, tariffs and energy begin to bite, a tech bro break-up looms.
'There's definitely some buyer's remorse on the right,' said Nu Wexler, a former policy communications executive at Google.
Having previously blocked the president from all Meta platforms, Facebook's Mark Zuckerberg sought to make amends first by dining with Mr Trump at his Mar-a-Lago resort in November, and then by donating $1 million to his inauguration fund.
Jeff Bezos, the founder of Amazon, caused outrage in February when he shook up The Washington Post's opinion section, ordering the paper to support 'personal liberties and free markets', in a move widely interpreted as a courtesy to Mr Trump.
He also made overtures to the first lady, paying $40 million for a Melania Trump documentary – nearly three times the next highest bid.
Meanwhile, Tim Cook, the Apple CEO, was hailed as tech's Trump whisperer after he donated $1 million and is said to have sweetened the deal with promises to start manufacturing products in the US.
Their support for Mr Trump was not without reason. During the election campaign, the president promised to unleash innovation by stripping back regulations he said hindered the development of artificial intelligence (AI) under the Biden administration.
Mr Trump is currently also making good on promises to make permanent the cuts to corporate tax rates, which he slashed from 35 per cent to 21 per cent in his first term.
And he has set about implementing a bold programme of financial services deregulation, particularly around cryptocurrency.
But the flattery of Mr Trump has not had the anticipated effect. It was widely expected that antitrust lawsuits against Facebook, Google and Amazon would soon disappear. Yet Mr Trump has so far declined to intervene.
Meanwhile, his relationship with Mr Cook appears to have soured after Mr Trump criticised the Apple billionaire for building factories in India.
At the same time, the knock-on effects of Mr Trump's broader policy agenda have sent Silicon Valley reeling.
Mr Musk said this week he was 'disappointed' with the president's 'big, beautiful' spending bill, warning that it 'undermines' the work of the Department for Government Efficiency (Doge) to bring down the deficit.
Despite Mr Musk's comment, the pair apparently remain great friends, with the president presenting the billionaire with a golden key to the White House during a farewell press conference on Friday.
However, Mr Musk's concerns were echoed by Chamath Palihapita, a former Facebook senior executive and host of the All In podcast, who warned that the financial markets would 'punish' the Trump administration for driving up national debt.
Immigration, too, has proved a dividing line between Mr Trump's Maga base and his Silicon Valley allies, with Mr Musk pledging to 'go to war' over visas for skilled immigrants.
Around 70 per cent of H-1B visa holders in the US are employed in the tech industry, and the SpaceX founder has likened the need to attract engineering talent from overseas to a professional sports team bringing in foreign players.
The president's repeated attacks on universities have also set pulses racing in Silicon Valley, with the scientific research programmes that transformed America into a technology superpower facing billions of dollars in cuts.
For decades, the US has stood unrivalled as the world's leader in scientific discovery and technological innovation thanks to government-backed projects that have created everything from the internet to mRNA vaccines.
However, the amount of money disbursed in grants by the National Science Foundation, which funds much of the scientific research at American universities, has plummeted by 51 per cent this year so far, compared to the average over the past 10 years.
'Killing the golden goose'
'There are a lot of people in Silicon Valley who worry this is going to kill the golden goose,' said Darrell West, a senior fellow in the Center for Technology Innovation at Brookings Institution.
'A lot of America's competitive advantage has been in digital technologies, and we're now making it difficult to finance the next generation.'
Mr Trump's tariffs agenda has triggered widespread alarm in the tech sector as well.
Having successfully won an exemption from a 145 per cent tariff on iPhones assembled in China, Apple was caught off guard last week by Mr Trump threatening 25 per cent tariffs on all iPhones made outside the US.
'I don't want you building in India,' the president warned Mr Cook during his recent Middle East tour.
Moreover, Mr Trump's moratorium on new clean energy projects risks driving up energy prices in California, where renewables account for 54 per cent of the state's total electricity generation.
Data centres – sprawling warehouses full of computer servers that power AI – are reliant on cheap electricity to keep them running, with experts warning that even small increases in energy prices could have 'catastrophic' consequences.
His plan to repeal the Inflation Reduction Act also spells bad news for California's world-leading energy storage industry by removing tax cuts that spurred investment in the technology.
From the moment Mr Musk pranced on stage at a Trump rally in October wearing an 'Occupy Mars' T-shirt, some critics said the president and Silicon Valley made strange bedfellows.
A far cry from the casual-dressing tech bros of San Francisco, whom Mr Trump recently called 'these internet people', the president is rarely seen without a suit and tie (when he's not on the golf course).
'Tech investors are not a logical fit for the grassroots Maga movement. It is more a relationship of convenience right now,' said Mr Wexler.
A loveless marriage it may be. But a messy divorce could have devastating consequences for the future of Mr Trump's coalition.
'He's tacked his administration to tech billionaires. They're a very powerful group and very well connected,' said Mr West. 'If they start to turn on him, that's a political nightmare.'