Geopolitical dynamics, especially the evolving US-China relationship, are influencing trade and the tech race.
President Donald Trump’s election win, which led to a surge in stock prices across Wall Street, signalled a wind of change for the tech and artificial intelligence (AI) industry. As he embarks on his second term in office, the tech world is buzzing with excitement, and a hint of uncertainty.
During Trump’s first term, AI was still finding its footing. Now, it’s practically marching down the runway in a flashy outfit, demanding attention. Back then, Trump focused on promoting innovation and maintaining US leadership in technology while engaging in aggressive trade policies aimed at protecting American intellectual property from the clutches of foreign competitors. It is now evident that his previous initiatives will continue.
Since taking office this time around, Trump has signed a flurry of executive orders that will see a more hands-off approach to AI regulation. One of them repealed an executive order signed into policy by former president Joe Biden in 2023. The order required developers of AI technologies that could potentially impact national security, the economy, public health or safety to submit testing data to federal authorities before launch. Trump, instead, called for a 180-day action plan to boost AI development without bureaucratic hurdles.
This approach aims to give US tech companies more freedom to innovate. Interestingly, the recent release of DeepSeek’s R1 model, which caused some panic in global financial markets, is likely a contributor to this softer approach. DeepSeek is a Chinese AI model comparable to ChatGPT-o1 but built reportedly at a fraction of the cost. This material progress from China will surely intensify US efforts to protect its tech dominance.
While this freedom for US tech firms may sound progressive, it raises concerns about the long-term implications of stalling regulatory progress — especially in areas such as privacy and cybersecurity. Linked to the tech showdown is military might. The AI arms race isn’t just about bragging rights — it’s about military power, cybersecurity and global influence.
We have also started seeing an increased influence on geopolitical dynamics from tech billionaires like Elon Musk. With ambitions ranging from colonising Mars to revolutionising transport through autonomous driving (where AI will drive your car while you sip coffee), Musk’s ambitions have a strong tailwind.
Similarly, other tech moguls are adapting to the new administration. Meta boss Mark Zuckerberg and Trump had a rocky history when the president was banned from Facebook after the January 6 Capitol riots, and he later threatened to jail Zuckerberg for alleged election interference. However, their relationship has since improved, with Meta making concessions, such as altering social media safety features.
Crypto assets continue to face many risks. Nobody wants to be left holding an empty bag when the music stops playing
We foresee a more lenient approach to antitrust enforcement, making mergers and acquisitions easier for tech companies looking to consolidate power. However, fewer competitors could mean less innovation and higher prices for consumers.
Talking about acquisitions, one of Trump’s first acts as president was to give TikTok’s Chinese owners 75 days to find a US buyer or risk a ban. Potential buyers include a surprising consortium featuring YouTube star Mr Beast, Oracle’s Larry Ellison and, of course, Elon Musk.
Many in the crypto industry are equally hopeful for a more favourable regulatory environment. Trump has formed an advisory committee on digital asset markets, chaired by David Sacks (a South African-born former PayPal executive). This committee aims to develop a regulatory framework for digital assets within six months.
Coincidentally (or not), Trump and his wife Melania have launched their own meme coins, which skyrocketed in value during his first days in office. All these developments seem positive for practical usage of crypto, with bitcoin, Ethereum and Ripple prices rallying in recent months. However, investors should beware: the final regulations may not be as relaxed as some hope and crypto assets continue to face many risks. Nobody wants to be left holding an empty bag when the music stops playing.
While we recently saw a retreat in tech stocks, we believe that technology’s momentum is so strong that it will likely overshadow regulatory impacts from any country or administration in the longer term. Growth in AI should continue to accelerate exponentially — whether it’s AI-driven cars, crypto chaos or the great semiconductor showdown, one thing is clear: technology will keep evolving, and we’ll be watching (and investing) every step of the way.
• Venter is joint head of portfolio management, INN8 Invest
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