By HERMAN MORRIS
The Trump presidency opened with the biggest explicit political embrace of a party and president ever by tech capitalists. While previous presidents would court the tech industry’s support, Trump’s second term saw explicit political donations to his inauguration fund, personal appearances on the campaign trail, and a now infamous photo lineup of most of the biggest names in the tech industry attending his inauguration as guests of honor. Undoubtedly, tech CEOs were expecting to get something for this brazen display of allegiance.
Through the power of the executive, these wins have been plain to see: Trump rebuffed the nativist wing of his party to protect the H1-B program (an important source of cheaper labor for tech industrialists), repealing of Biden’s executive order to regulate the AI industry, and began forming a strategic crypto reserve.
Beyond the executive orders, Trump’s biggest giveaway to the tech industry was installing Elon Musk at the head of DOGE and allowing him to carry out a massive attack on federal workers, including layoffs, slashed budgets, and ripping up union contracts. After the measures were tied up in the courts for some time, the Supreme Court has given Trump the go-ahead for continuing the layoffs of federal workers. While it will take some time to fully assess how many jobs were cut by Trump, The New York Times estimates so far that more than 130,000 jobs have been removed and there are an additional 140,000+ cuts planned.
While the DOGE program failed in its goal of eliminating a trillion dollars in government spending, it still achieved many strategic victories for Trump and the far right to empower the executive branch to unilaterally redefine and destroy sections of that branch on a whim, and to force over a hundred thousand workers off their jobs, lowering the value of labor across the U.S. by spiking unemployment.
Somewhat behind the scenes has been the continuation of awarding defense and aerospace contracts to tech companies. For years now, tech companies have been more heavily involved in government contracts domestically and abroad. These include JEDI (a military cloud contract with the U.S. and Microsoft), NIMBUS (a cloud contract with the IDF and Google/Amazon), and project Maven (an AI surveillance contract between the Pentagon and Palantir). Trump has continued with this trend: over $600 million in contracts to Anduril (an autonomous weapon and software firm), $200 million each to Google, OpenAI, and xAI for AI services, an additional $795 million to Palantir for continuing Maven work, and billions in contracts for space exploration to SpaceX. Beyond this, the data of the federal government has been thrown open for AI companies to dig through and access, including OpenAI, xAI, and Palantir. These new sources of AI training data are important in the land-rush stage of AI tool development, as the open internet as a source of information for AI data is rapidly running out.
All that money and nowhere to go
These giveaways to the tech industry are important not only for tech companies, but for the continued dominance of the U.S. economy as it is currently constructed. While most major tech companies regained high profits after their drop from the Covid bubble, their stock evaluations come from the larger argument they make to investors that they will continue to increase their profits by opening up new markets and more deeply embedding themselves into the U.S. economy. These speculative promises are key to the companies remaining as highly valued as they are. In the case of Tesla, with its recent failures with the Cybertruck and declining sales, this dynamic is exposed, and we can see nearly a 50 percent drop in the company’s value over a period as short as a few months.
As crypto and AI markets have yet to demonstrate consistent profitability on their own terms, tech companies are increasingly having to run to the state to deregulate and provide more public funding and resources to prop up the losses they incur through speculating on new markets. On top of that, they have now ripped off the band-aid of regular layoffs for workers, even during profitable periods, as tech CEOs are having to reduce headcount in their older divisions to justify hundreds of billions of dollars they are pouring into AI investments that have no line of sight to profitability. For the near term, this strategy has panned out for the big tech companies (Tesla excluded), whose profits are at a rate they are comfortable with while they continue to invest in AI speculation.
Long term, this strategy is going to run aground without AI showing profit potential. Financially, competition between bigger tech companies in legacy businesses that lack a monopoly are going to drive profits down (cloud services, smartphones, advertising), and layoffs can only go on for so long before critical business operations begin to be impacted. More importantly, there is a political cost of continuing to prop up a system that siphons an ever-larger amount of social wealth with an increasingly small pool of business leaders, with the crumbs of high-paying work now beginning to dry up for tech workers who are facing >6% unemployment coming out of college, 2% higher than the national average.
A crack up? Not quite
The latest budget bill has appeared to be a major break between the GOP and tech leaders. Trump has feuded with Musk in a very public fashion over the 2025 budget bill, particularly around the ending of EV tax credits, which Tesla relies on, spiking the national debt, and now the landmark AI amendment to prevent any state-level regulations on AI tools—which has been dropped from Trump’s budget following a break from GOP representative Marjorie Taylor Greene and a 99-1 vote to drop it in the Senate. This was a surprise for those watching the GOP budget process, as the second Trump term up until this bill was largely a collaboration with the big tech owners. The actions of Republican lawmakers demonstrate that even within the GOP there are still divisions over what stance to take towards the tech industry, and the anxiety that other layers of the capitalist and middle classes in the U.S. feel toward the continuing dominance of the tech industry.
Also of note is the impact that tariffs will have on the material inputs needed to fulfill the capital expansion proposed by the tech industry today. Trump’s ongoing attempts to raise state funds through taxing imports have the potential to incur massive downstream cost inflation for new hardware and data center construction, both through advanced chip tariffs and on tariffs for construction materials. While tariffs on semiconductors have been paused in the past, the situation for tariffs is changing on nearly a daily basis and can help drive cost inflation for the already massive capital expenditures tech companies are taking on to build out their AI infrastructure.
While these divisions are notable, the Trump White House itself is still firmly embedded with tech capital, even if on occasion it doesn’t get everything that it wants. The vice president is still a former tech venture capitalist with direct ties to Peter Thiel, and Trump is now beginning to circumvent Congress through executive orders by banning any DEI influence in AI development, implicitly trying to pre-empt any discrimination-based regulation of AI tools.
While Trump’s and Musk’s feud cannot be denied, a U.S. president will always have a door open for one of the wealthiest men in the world, who also controls vast amounts of industrial production and manufacturing. Even if this feud were to last, in the past when Trump has feuded with a tech capitalist, he had no qualms working with a different CEO, still giving the industry a leg up. This was the case of the JEDI contract controversy in the first term, when Trump is alleged to have intervened to award Microsoft a contract over Amazon due his feud with Bezos. Trump also further entrenched the crypto market into traditional finance through the signing of the GENIUS act, setting the stage to allow for stable coins to be traded as traditional financial assets, but without the same regulations.
As inequality continues to deepen in the United States, and the tech industry continues to try and take over more of the economy, it should be expected that the twin capitalist parties of the U.S. will have more members who come out against tech capitalists. Working people need to understand, however, that both Democrats and Republicans have zero interest in redistributing the ill-gotten gains of the tech industry to its workers, nor the resources it exploited and the data it stole from people who used their services. At most, these politicians want to see anti-trust action that ensures that profits will trickle down to a few more middlemen.
Ultimately, only working people can be trusted to have their own class interests at heart. Through working-class institutions and tactics like unions, labor councils, mass mobilizations, and strikes, workers can be organized against this coalition of big business leaders. Elements of this can be seen in the No Kings protests, as well as the ongoing Tesla Takedown protests and the mobilizations to protect immigrants. However, tech workers, whether in the factory or in the office, are by and large unorganized, even by the abysmal unionization standards of the U.S.
For the tech industry and its cozy relationship to the power of the U.S. state to ever really be challenged, workers at these corporations need to enter the union movement as the strike power they wield at companies like Amazon, Tesla, or Google has the potential to hurt these companies in their bottom line, along with tying up potentially massive sections of the U.S. economy, which is increasingly reliant on software and delivery services provided by big tech companies.
Tech CEOs and the far right seem powerful now with the vast power of their corporations and the U.S. state backing them up, but that power is only possible through the work of factory assemblers, delivery drivers, programmers, and other IT workers. Most of these people will only see a crumb of the profits currently being posted by the tech industry, and their worsening labor conditions give them a material interest in wanting to take on these companies and the ways in which they are exploiting both workers and society at large. Only through getting these people in touch with the historic labor movement and mobilizing against the assault on working people everywhere that tech is waging, can the real basis of a fight back to tech’s dominance be built.
Moreover, the massive consolidation of economic control within technology production, maintenance, and research points to the necessity of nationalization and workers’ control of the tech industry. The decisions that happen at the top levels of the big tech companies impact the livelihoods and working conditions of millions, and these decisions are made to raise profits for an increasingly small group of business executives and investors.
The backbone of internet communications, technology production, and research should not be left up to an un-elected and unaccountable bureaucracy of industry leaders. Instead, control should be placed in the hands of the working people who operate and use these tools each day. Questions like how much to invest in AI development, where it should be deployed, and what kind of safety tools to be built into them all can only be resolved on a rational basis amongst working people who manage the negative consequences that new technologies can bring when deployed onto the job site or in their community. Because of this material interest working people have, workers’ control of industry is the only political vehicle that can truly realize the emancipatory power that science and technology propose.
