Tidal Wave of Trump Policy Changes Comes for the Tech Space
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Within his first week in office, President Trump signed a flood of wide-ranging executive orders and took actions that have significant implications for the technology industry. The sheer volume of change, along with the freezing and unfreezing of federal funding, sparked much confusion.What are some of the biggest tech policy changes coming from the current administration, and what could they mean for the industry?A New AI OrderTrump voiced plans to repeal Bidens executive order on AI, arguing that it stifles innovation, and swiftly followed through. He signed an executive order -- Removing Barriers to American Leadership in Artificial Intelligence -- and also announced plans for Stargate, a $500 billion AI infrastructure initiative.The Stargate initiative is interesting as it aligns several large players in the space into a single entity to help push initiatives, Max Shier, vice president and CISO at Optiv, a cybersecurity advisory services company, tells InformationWeek via email.While those moves have big possibilities for the AI space, it will likely take time to see the effects.Most of the executives that I'm talking to now don't feel like there's a huge impact, at least right now. And they're continuing to make investments and pursue solutions as they were in Q4 or second half of last year, and in fact investing, even more in those solutions from an AI perspective, Bill Farmer, lead of the aerospace, defense, and government services investment banking team and managing director at Brown Gibbons Lang & Company, an investment bank and financial advisory firm, tells InformationWeek.Related:With Chinese startup DeepSeek making strides, competition in the global race for AI market dominance is heating up. But there are still concerns over risk in the AI space. Several industry and consumer groups signed a letter calling for the White House to retain AI testing and transparency rules, CNBC reports.The removal of guardrails and oversight can be negative if tech companies are allowed to do whatever they want without ethical considerations guiding their conscience, says Shier.Cybersecurity ChangesThe Trump administration fired the Cybersecurity and Infrastructure Security Agencys (CISA) Cyber Safety Review Board (CSRB). The CSRB was investigating China-state backed APT group Salt Typhoon, the group responsible for a massive breach of US telecom companies.I could also see potentially a pullback in CISAs authority and role. Their budget has been increasing year over year. At a minimum, I think they're going to take a hard look at what those programs are and what that spending looks like, says Deniece Peterson, senior director of federal market analysis at Deltek, an enterprise software and information solutions company.Related:During his campaign, Trump was vocal about his intentions to be tough on China, but he seems to be taking a more nuanced approach now that he has taken office, AP News reports. What that means for the federal governments approach to cyber threats from China remains unclear.Peterson points out that Trump has established the Presidents Council of Advisors on Science and Technology (PCAST). That may incorporate some of those [cybersecurity] activities. We just don't know yet, she says.DOGE and Government SpendingThe Department of Government Efficiency (DOGE) is going to focus on modernizing federal technology and software to maximize efficiency and productivity, according to the executive order establishing the new department.Particularly the government services folks are extremely nervous about DOGE [it is] looking at reducing government spending, looking at reducing services, looking at reducing contractors, Farmer points out.Related:Trump has also spoken about rescoping and even eliminating entire federal departments. How that will actually play out under this administration remains to be seen, but it could result in workforce reductions.The Trump administration is going to be looking at automation of certain functions, says Peterson.Workforce reductions and increased automation could mean opportunities for IT companies to vie for government contracts. IT contractors are looking at this is about how can they support this new kind of environment and shift, Peterson adds.A Step Back from RegulationTrump signed an executive order placing a regulatory freeze on federal agencies. This administration has made clear its plans for deregulation.His moves are not unexpected.He was very clear on what he wanted to achieve in the tech space and that is less restrictions on tech companies and more innovation, says Shier.One potential result of a lighter-touch approach to regulation could be more M&A activity in the tech industry.I think a lot of deals were shelved in the last three or four years that had the potential to be significant transactions but because of the regulatory risk, folks decided not to pursue those, says Farmer. That's changed now. At least optically, people feel like there's a higher chance that deals could get through.Early DaysIt is still early days for the second Trump administration. Many of his executive orders are facing legal pushback, and the impact of the presidents actions are not readily apparent in many cases.It's hard to figure out how the executive orders to date impact spending because there's been a lot of confusion. There's a lack of clarity on what the scope is, what kind of spending these things apply to, says Peterson.Technology industry stakeholders will have to watch how these initial policy changes play out and prepare for the possibility of more.I will be watching whether they continue down the path of de-regulation and how it affects the use and consumption of tech, including AI and privacy, says Shier.In the cybersecurity space, the fate of the Cybersecurity Maturity Model Certification (CMMC) program is also something to watch. CMMC has seen a significant amount of pushback by companies doing business with the government as they state it is too expensive to implement and would reduce the competition in the government contractor space, says Shier.Technology leaders will be keeping a close eye on federal tech policy changes that have the possibility to reshape national security, the government contractor space, and the private sector.
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