Following his decisive win, Donald J. Trump has wasted no time in shaking up the Washington, DC status quo. With Inauguration Day still months away, the Tech Sector already is feeling the impact of the 47th (and 45th) US President's bold new vision.
In 2025, Republicans will hold the majority in both houses of Congress, as well as the Presidency. This political alignment between US Executive and Legislative branches will create not just tailwinds, but strategic moves, driving Tech forward.
01 | Championing innovation in Emerging Tech
Trump's election likely means big wins for Emerging Tech, including Crypto, AI and Commercial Space.
During his campaign, Trump emphasized ensuring America's ability to dominate the Tech Industry, including for both economic competitiveness and national security reasons. Among others, the ongoing US — China battle for AI supremacy is viewed as a must-win.
For those seeking a potential roadmap, the 2024 GOP “Make America Great Again” platform document promises that “Republicans will pave the way for future Economic Greatness by leading the World in Emerging Industries,” with express focuses on 3 key areas:
1. Crypto, 2. Artificial Intelligence (AI) and 3. “Expanding Freedom, Prosperity and Safety in Space.”
The Republican platform document envisages:
| Crypto
Ending the Biden administration's “Crypto crackdown,” “oppos[ing] the creation of a Central Bank Digital Currency,” “defend[ing] the right to mine Bitcoin,” and “ensuring every American's right to self-custody of their Digital Assets and transact free from Government Surveillance and Control.” Artificial Intelligence (AI) Repealing the Biden Administration's AI Executive Order, including on grounds that it “hinders AI Innovation” and is “dangerous.” In its place, “support[ing] AI Development rooted in Free Speech and Human Flourishing.” Expanding Freedom, Prosperity and Safety in Space “Creat[ing] a robust Manufacturing Industry in Near Earth Orbit, send[ing] American Astronauts back to the Moon, and onward to Mars, and enhanc[ing] partnerships with the rapidly expanding Commercial Space sector to revolutionize [the US'] ability to access, live in, and develop assets in Space.” |
Notably, tech mogul, Elon Musk, whose influence loomed large in President Trump's presidential reelection campaign — and who has been tapped by Trump to co-lead (with Vivek Ramaswamy) the novel Department of Governmental Efficiency that Musk proposed — has well publicized views on (and, in some cases, involvement in) each such emerging tech industry.
Musk's views are likely to influence the Trump administration's approach to growing US Tech supremacy and capital formation — not just its approach to efficiency and cost-cutting.
02 | Artificial Intelligence — moving the regulatory North Star
As noted, President-elect Trump has vowed to repeal President Biden's sweeping AI Executive Order, including for freedom of speech reasons, and there has been no indication that he is rethinking that promise. Musk's influence in the Trump administration makes AI regulation and legislation a particularly hot topic to watch.
Viewing AI dominance as critical for both ensuring national security and economic competitiveness, Trump has argued against heavy AI regulation. Similarly, Vice President-elect JD Vance has favored the removal of certain restrictions on AI developers.
Yet Elon Musk has advocated publicly for AI regulation, including in connection with California's highly controversial AI safety bill, SB 1047, which Governor Gavin Newsom recently vetoed. Among other things, SB 1047 would have required developers of powerful AI models to conduct safety tests, implement safeguards and protect whistleblowers. The bill was strongly opposed by many in the tech industry, including OpenAI, as well as numerous Democratic members of Congress, and was characterized as being too burdensome and “stifl[ing] innovation.” By contrast, Musk called on California to pass SB 1047, stating in a post on X, "For over 20 years, I have been an advocate for AI regulation, just as we regulate any product/technology that is a potential risk to the public."
In the US, AI has been a contentious topic for Congress, sparking debates along partisan lines about both the degree of restrictions to impose and on which players to impose them. To date, several AI bills have focused on AI safety, including concerning elections and deepfakes, although none has gained traction.
President Biden's AI Executive Order provided a “North Star” for US federal AI regulation and directed agencies to act (including to promulgate rules and standards), but, unlike the EU AI Act, did not itself impose binding regulations that are subject to enforcement.
As such, the US states have taken the lead in legislating AI, creating an increasingly complex “patchwork quilt” of diverging law that poses challenges for companies and projects doing business in the US.
As we await Trump's next move, AI safety, including in the context of national security, will be a key concern. Republican control in both the US Senate and House of Representatives may help speed the passage of US federal AI legislation, even without a filibuster-proof Senate.
The Trump administration and Congress will need to grapple with concerns about ensuring privacy and limiting burdens on freedom of speech in a fast-moving environment, as AI remains very much a race to the moon, an arms race and a talent war.
03 | Crypto and digital assets — a dealmaking renaissance and the crypto capital of the world
The election transformed the crypto industry from government enforcement target to an industry on the verge of breakout expansion. Trump catapulted the Department of Governmental Efficiency from a DOGE meme fever dream to an imminent reality. Buoyed by Trump's campaign promises at the Bitcoin Conference earlier this year in Nashville, including to fire SEC Chair Gary Gensler “on day one,” Bitcoin has reached new all-time price highs. We expect that many high-profile market participants, including banks and other TradFi players and household names, that have been waiting on the sidelines, will enter the digital assets space in force.
To date, views on crypto regulation and legislation have largely divided along partisan lines, stymying attempts to pass new US federal laws, including concerning market structure and stablecoins.
Democratic lawmakers in the House and Senate, as well as the Biden administration, generally, with some exceptions (like Kirsten Gillibrand and Ritchie Torres), have tended to approach crypto with suspicion, viewing the industry through a national security and focusing on potential for fraud, without a corresponding recognition of the technology's promise or the need for the US to compete, let alone dominate, in the crypto space.
Congressional Democrats such as Maxine Waters and Elizabeth Warren have pushed for stricter regulatory approaches, which has had a chilling effect on the industry, and Biden appointee Gary Gensler has led the SEC on an enforcement warpath against crypto.
Early in 2024, President Biden vetoed lawmakers' decision to end the wildly unpopular accounting guidance, SAB 121 (which the US GAO determined was an improperly passed rule). In addition, it had been rumored that, over the past few years, Congress had been very close to passing a federal stablecoin bill, but that the Biden administration's view discouraged its passage.
By contrast, Republicans, including, notably, Patrick McHenry and Cynthia Lummis (both of whom have sponsored or co-sponsored comprehensive crypto market structure bills), generally have taken more procrypto stances.
As for the President-elect, despite an initially dismissive attitude towards crypto, between 2022 and 2024, Trump himself launched four NFT collections, Trump Digital Trading Cards, which capitalized on his brand loyalty and rocketed in price immediately following his November re-election. His transformed views on crypto were clear during the US Presidential election race: In his September 2024 Nashville speech, Trump vowed to make the US the crypto capital of the world and promised the creation of a national strategic Bitcoin reserve.
While Trump's firing SEC Chair Gary Gensler on day one statement may have been a bit metaphorical (Gensler's term was to run until April 2026, subject to any forcause removal), it signaled a sea change in the US regulatory approach to crypto. While many predicted that Gensler would resign by the end of 2024, on November 21, 2024, Gensler made headlines with his announcement that he would be stepping down on January 20, 2025, just in time for Inauguration Day. Calling the SEC a “remarkable agency,” hailing SEC staff as “true public servants,” and thanking President Biden, Congress, US government colleagues and regulators around the world. Gensler reflected, “It has been an honor of a lifetime to serve with them on behalf of everyday Americans and ensure that our capital markets remain the best in the world. [….] The SEC has met our mission and enforced the law without fear or favor.”
That same day — November 21, 2024 — crypto scored multiple big wins: A federal court in Texas struck down the SEC's controversial Dealer Rule, on grounds that the SEC had exceeded its statutory authority. That case, brought by the Blockchain Association and the Crypto Freedom Alliance of Texas, had asserted, among other things, that the SEC had violated its obligations under the Administrative Procedures Act, noting that the Dealer Rule blurred the lines between traders and dealers, including in the context of DeFi.
Also on November 21, the Consumer Financial Protection Bureau (CFPB) issued its final “Larger Participant Rule,” which applies to “"general-use digital consumer payment applications,“ including peer-topeer and payment apps and digital wallets. In stark contrast to the CFPB's 2023 proposed rule — and as explained in the issuing release — the Final Rule “does not include digital assets transactions.” “The CFPB has decided, for purposes of this Final Rule, not to define larger participants in the general-use digital consumer payment applications market by reference to activity involving digital assets.”
The next day, on November 22, 2024, SEC Commissioner Jaime Lizárraga, who was appointed by President Biden, and whose term was set to run until 2027, announced that he will step down on January 17, 2025. Lizárraga's departure will mean that only one Democrat-appointed SEC Commissioner — Caroline Crenshaw — will remain when Trump takes office. Meanwhile, Trump reportedly is exploring the appointment of a Crypto Czar.
On November 22, Trump named crypto-friendly hedge fund manager, Scott Bessent, as his choice to succeed Janet Yellin as Treasury Secretary. (Many believe that, had the next US President been a Democrat, Gensler would have sought to hold that role, which could have had a very different impact on crypto than Bessent is expected to.)
That same week, spot Bitcoin ETF options hit the market following regulatory approval, and yet another major financial services company announced plans to enter the spot crypto trading market. Meanwhile, financial advisers, including at wire houses, are reportedly clamoring for more freedom to recommend crypto related products to their clients.
Irrespective of whether Trump delivers on some or all of his crypto pledges, the market already has felt the impact, including with increased deal-making and interest from investors, builders and contributors — including Trump himself. Trump's social media venture, Trump Media & Technology Group, which owns Truth Social, reportedly is in talks about a potential purchase of digital asset trading platform, Bakkt. Additionally, according to a November 18, 2024, US Patent and Trademark Office filing, T Media Tech LLC applied for a TRUTHFI trademark and referred to uses in connection with, among others, “digital wallets,” “cryptocurrency payment processing” and “trading in digital assets.”
Some members of Congress, including Waters and McHenry, have been hopeful that certain cryptofocused legislation, such as the McHenry-sponsored FIT21 Act (focusing on market structure) or federal stablecoin legislation, could be passed during the lameduck session (i.e., prior to the new Congressional class). Waters herself has called for a “grand bargain” on stablecoin legislation, but lawmakers like Sherrod Brown, who had been hostile to crypto and did not win reelection, may be unwilling to strike such a bargain.
In addition, many believe that Trump's immediate priorities include topics like taxes, immigration, trade and tariffs, and that crypto may have to wait.
For those reasons, it is more likely that movement on crypto regulation and legislation will happen in 2025 — although the US and, perhaps, the world are awaiting Trump's pick for the next SEC Chair, with crypto-friendly SEC Commissioners Hester Peirce and Mark Uyeda reportedly under consideration, along with numerous other contenders from the business and legal worlds.
It is expected that a Republican-majority Congress will pass long-stalled crypto legislation, but, given the numbers in the Senate (and the possibility of filibuster), pro-crypto legislation will still need some Democratic support. In the meantime, regulatory efforts to provide greater crypto market clarity, including concerning when a digital asset may be a commodity and not a security, continue.
The Heritage Foundation's Project 2025 document, several authors of which have been nominated to President-Elect Trump's cabinet, advocates rulemaking and/or legislation classifying most tokens as commodities rather than securities, which would represent a huge victory for the crypto industry.
On November 21, 2024, the US CFTC's Global Markets Advisory Committee (GMAC), sponsored by CFTC Commissioner Caroline Pham, considered a presentation by the Utility Token workstream of its Digital Asset Markets Subcommittee, focused on defining utility tokens and developing guidance for market participants. During the same meeting, the GMAC advanced a recommendation to expand the use of non-cash collateral through the use of distributed ledger technology.
“All over the world, there have been successful and proven commercial use cases for tokenization of assets, such as digital government bond issuances in Europe and Asia, over $1.5 trillion notional volume in institutional repo and payments transactions on enterprise blockchain platforms, and more efficient collateral and treasury management,” Pham said in a press release. “Now, we can finally begin to make progress on U.S. regulatory clarity for digital assets with today's GMAC recommendation on tokenized non-cash collateral. This marks a significant first step toward realizing these opportunities for our derivatives markets — with exactly the same guardrails and protections in place. Embracing new technology does not mean compromising on market integrity. I'm also excited by the progress of the Utility Tokens workstream and their extensive efforts on a regulatory solution for these key assets which will help to unleash rapid innovation and growth in the digital economy.”
As SEC Commissioner Mark Uyeda noted recently, the era of aggressive SEC enforcement against crypto projects, in the absence of fraud or actual harm, is expected to end. Efforts to launch a US Central Bank Digital Currency (CBDC) also are likely to cease. Trump has vowed that, during his presidency, there will be no CBDC and has thanked Vivek Ramaswamy, who has described CBDCs as “a threat to liberty in this country,” for alerting him of the risks. Relatedly, Trump has expressed his belief in the right to self-custody digital assets, and his view could influence agencies' approaches to unhosted and non-custodial wallets. As of the date of this publication, the price of Bitcoin has soared to nearly US$100,000.
In short, Trump's win has been a win for crypto.
04 | Infrastructure as a service (IaaS) providers and National Security
In light of Trump's strong focus on National Security, restrictions on IaaS providers are expected to grow.
In January 2021, then-President Trump issued an executive order (IaaS Executive Order) called “Taking Additional Steps to Address the National Emergency With Respect to Significant Malicious Cyber-Enabled Activities,” aimed at addressing foreign bad actors' use of US IaaS products.
The IaaS Executive Order states that the US “must ensure that providers offering United States IaaS products verify the identity of persons obtaining an IaaS account [….] for the provision of these products and maintain records of those transactions. In appropriate circumstances, to further protect against malicious cyber-enabled activities, the United States must also limit certain foreign actors' access to United States IaaS products. Further, the United States must encourage more robust cooperation among United States IaaS providers, including by increasing voluntary information sharing, to bolster efforts to thwart the actions of foreign malicious cyber actors.”
The IaaS Executive Order directed the Commerce Department to promulgate rules under which, essentially, IaaS providers would be responsible for conducting “know your customer”/anti-money laundering (KYC/AML) checks.
The Biden administration did not repeal Trump's IaaS Executive Order and, in the Biden AI Executive Order, expressly directed the Secretary of Commerce, similarly, to propose regulations, including reporting requirements, applicable to IaaS providers in the context of AI.
0n January 29, 2024, the Commerce Department issued a Notice of Proposed Rulemaking (NPRM), referring to both the Trump IaaS Executive Order and the Biden AI Executive Order. Specifically, the NPRM described those executive orders as directing it to propose regulations “requiring U.S. Infrastructure as a Service (IaaS) providers of IaaS products to verify the identity of their foreign customers, along with procedures [….] to grant exemptions; and authorize special measures to deter foreign malicious cyber actors' use of U.S. IaaS products” and “require[ing] providers of certain IaaS products to submit a report to the Secretary when a foreign person transacts with that provider or reseller to train a large Artificial Intelligence (AI) model with potential capabilities that could be used in malicious cyber-enabled activity,” respectively.
The NPRM reflected certain public comments received in response to a September 24, 2021, Advanced Notice of Proposed Rulemaking (ANPRM), and the deadline for public comments on the NPRM was April 29, 2024, it previously had been predicted that the Commerce Department would introduce final rules by year-end.
Given that Trump's IaaS Executive Order introduced the concept of applying KYC/AML checks to IaaS providers, his continued focus on National Security, and intensifying US-China relations and geopolitical tensions, we expect that the Commerce Department is likely to continue to progress rules, notwithstanding any promised repeal of Biden's AI Executive Order.
In terms of timing, it is notable that years elapsed between the Commerce Department's issuance of its IaaS ANPRM and its IaaS NPRM (with Biden's AI Executive Order having been issued in the meantime). This appears to mirror the Commerce Department's slow issuance of new export controls in the wake of the Export Control Reform Act of 2018. As such, it is possible that implementation of any Trump IaaS national security initiative could be delayed by bureaucratic or other delays in the rulemaking process at the Commerce Department.
This continues to be a very important topic for companies in the Tech space, from large companies and cloud service providers, to earlier stage projects. Importantly, the introduction of IaaS KYC/AML requirements could have an impact on the crypto industry. For instance, to the extent that certain projects and teams may have taken the position that they are not engaged in money transmission, and, instead, are providing infrastructure, they may need to reassess applicable requirements and compliance processes.
05 | Big Tech's Future
Trump's re-election has been hailed as a return to dealmaking, but much of the specifics of the regulatory policies will hinge on whom he appoints to key roles.
In addition to Elon Musk, who, despite being at the helm of a Big Tech social media platform, has been openly critical of certain Big Tech players, Trump already has tapped for leadership positions certain players with views critical of Big-Tech platforms.
For instance, Brendan Carr, Trump's pick for FCC Chair, has called for the FCC to repeal Section 230 of the Communications Decency Act of 1966, which generally insulates providers and users of interactive computer services from being held liable for content provided by third parties. Carr also has accused certain Big Tech players of suppressing specific viewpoints, with Trump referring to him as a free speech warrior, and has advocated for the ban of certain Big Tech platforms.
While new leadership at the antitrust agencies is expected to reassess current priorities, the antitrust enforcement focus on Big Tech — including the Google Search case — date back to the first Trump administration. In addition, certain key transition team members, including Vice-President-elect Vance, have publicly supported FTC Chair Lina Khan's continued focus on challenging Big Tech dominance, including efforts to break up, or heavily regulate, Big Tech platforms.
On the other hand, Pam Bondi, whom Trump named on November 21, 2024, as his pick for Attorney General, reportedly has lobbied on behalf of some of the biggest Big Tech players. (By contrast, Matt Gaetz, who withdrew from consideration as Attorney General, had, like Vance, complimented Lina Khan's strict approach to antitrust enforcement.)
Recent criticism of Big Tech, including by Trump, Musk, Carr, Khan, Vance and Gaetz, has taken a somewhat different approach, with an increased focus on freedom of speech considerations.
At the same time, US companies might see less coordination on regulation and enforcement at international level. Following a meeting with one US Big Tech CEO, Trump suggested that he would try to take steps to protect US companies against enforcement and regulatory actions in the EU, including under the Digital Services Act and Digital Markets Act.
06 | US-China relations could get colder, but India warms up
As US and China battle for global Tech supremacy, tensions have risen between the two countries, affecting critical sectors such as AI, autonomous vehicles and semiconductors. Trump has strong views on Chinese tech influence and has emphasized restricting exports of critical technologies, like AI, semiconductors and quantum computing.
A key focus of Trump's reelection message was on implementing tariffs on imports of Chinese goods. Big Tech — as well as other tech players — that rely on Chinese supply chains are likely to feel the impact of those tariffs, and we anticipate that relations between the US and China will continue to get colder.
Trump's tough stance on China may lead US companies to diversify their supply chains and seek alternatives in India. This could result in increased investments in Indian technology and manufacturing sectors as businesses look to reduce reliance on Chinese suppliers. The Indian IT sector's contribution to the U.S. economy — estimated at US$80 billion — highlights its importance and may encourage more US firms to set up Global Capability Centers (GCCs) in India as they seek reliable partners for growth.
07 | Tech Outlook
Trump has expressed an ambitious and aggressive Tech vision. While markets have responded positively to President Trump's reelection, the US remains a deeply divided country, and President Trump will now need to deliver on his election promises. Republican control both the Senate and House of Representatives should make it easier to pass laws and move forward Trump's agenda.
We will be monitoring developments as they unfold.
Please click here to visit additional insights: U.S. Election Outcomes: The Business Implications of Trump's Second Term, Webinar: Navigating the Impact of the US Election: Legal and Strategic Insights and Crypto Facto with Josh Klayman Podcast: Episode 13, Trump Card: Crypto Plays to Win Under the Next US Administration.
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