Public praise and shared foes: Tech's Trump 2.0 strategy

Summary

POLITICO Tech Podcast Summary
Episode: "Public Praise and Shared Foes: Tech's Trump 2.0 Strategy"
Release Date: November 8, 2024

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Introduction

In the latest episode of the POLITICO Tech podcast, host Stephen Overlea delves into the strategic maneuvers of Silicon Valley leaders following President-elect Donald Trump's victory on November 8, 2024. With notable figures like Sundar Pichai of Google, Jeff Bezos of Amazon, and Marc Benioff of Salesforce extending their congratulations, the episode explores the underlying motivations and potential impact of their public praise.

Silicon Valley’s Strategic Praise for Trump

Overlea begins by highlighting the unusual surge of congratulations from Silicon Valley giants to the newly elected Trump administration. Typically, tech leaders extend such greetings as a diplomatic gesture, aligning with the adage, "you catch more flies with honey than with vinegar." However, in Trump's case, this flattery appears to carry additional strategic weight.

Notable Quote:
“In Trump's case, the flattery may be especially strategic.” — Stephen Overlea [00:13]

Trump 2.0: Personal Grievances and Policy Implications

Adam Kovakevich, CEO of the tech industry group Chamber of Progress, provides insights into Trump's unique approach to policy-making. According to Kovakevich, Trump prioritizes personal relationships over ideological or policy-driven decisions. This personal grievance agenda was evident in his previous administration, where he frequently targeted companies and individuals based on personal dislikes rather than policy disagreements.

Notable Quote:
“Trump doesn't come at tech issues from an ideological standpoint or a policy driven standpoint. He comes at it through a personal standpoint.” — Adam Kovakevich [02:11]

Strategies for Tech Companies in the New Administration

Kovakevich predicts that tech companies will adopt a dual strategy in navigating the Trump administration:

1. Flattery and Personal Relations: Building and maintaining favorable personal relationships with Trump, as he values praise and validation from successful business leaders.

   Notable Quote:
   “Flattery gets you everywhere.” — Adam Kovakevich [04:05]

2. Identifying Shared Enemies: Aligning with Trump on common adversaries, particularly China, to secure policy support and collaborative efforts against global rivals.

   Notable Quote:
   “If companies... persuade Trump that they have a shared enemy, then I think he's shown that he'll put energy behind beating them up.” — Adam Kovakevich [05:11]

The Role of Elon Musk and Influencers

The conversation shifts to the potential influence of high-profile tech figures like Elon Musk in bridging the gap between Silicon Valley and the Trump administration. While Musk has cultivated a close relationship with Trump, Kovakevich suggests that other companies may prefer to establish their own direct connections rather than relying on Musk as an intermediary.

Notable Quote:
“Other companies are going to want to have their own relationship.” — Adam Kovakevich [05:58]

Policy Areas Under Trump 2.0

Regulation

Kovakevich anticipates a deregulatory approach from the Trump administration, particularly in sectors like crypto and fintech. With a Republican-controlled Senate and potentially a Republican House, certain Biden-era regulations are expected to be rolled back.

Notable Quote:
“There are certain areas where Trump is going to behave fairly, you know, like a conventional Republican in terms of scaling back agency level action against industry that Biden had started.” — Adam Kovakevich [07:14]

However, for comprehensive regulatory frameworks, such as those desired by the crypto industry, bipartisan Congressional action remains necessary.

Antitrust

Antitrust remains a complex area under Trump's potential second term. Kovakevich points out that existing lawsuits against Big Tech initiated during Trump's first term are unlikely to be dismissed. Instead, there may be shifts in litigation strategies and remedies.

Notable Quote:
“Trump welfare standard... Does this company nice to me?” — Adam Kovakevich [11:21]

The administration may continue to pursue antitrust actions not just based on traditional consumer welfare concerns but also on perceived corporate behaviors, such as censorship.

Artificial Intelligence (AI)

AI policy is another critical area, with many states leading the way on AI safety legislation due to Congress's inaction. Under a Trump administration, the rollback of Biden's executive orders on AI is expected, pushing AI regulation further towards state-level initiatives.

Notable Quote:
“Trump has been very clear that he's going to rescind the Biden executive order on AI.” — Adam Kovakevich [14:42]

Concerns and Potential Challenges

Kovakevich expresses significant concern over content moderation and free speech under the Trump administration. He anticipates intensified pressure on social media platforms to align with political demands, potentially undermining healthy content moderation practices vital for successful social media business models.

Notable Quote:
“I think the biggest, just based on history has been, has been content moderation and speech.” — Adam Kovakevich [15:49]

This tension could lead to a push for revisiting Section 230 protections, which incentivize platforms to moderate content without facing liability.

Conclusion

The episode concludes with Kovakevich emphasizing the nuanced landscape that tech companies will navigate under a second Trump term. Balancing strategic flattery, aligning with shared adversaries, and managing regulatory shifts will be crucial for Silicon Valley leaders. Additionally, the ongoing debates around antitrust and AI highlight the complexities of shaping tech policy in a politically charged environment.

Notable Quote:
“I think they'll want to have their own relationship.” — Adam Kovakevich [05:58]

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This comprehensive summary encapsulates the key discussions and insights from the "Public Praise and Shared Foes: Tech's Trump 2.0 Strategy" episode of POLITICO Tech, providing valuable perspectives for listeners and those interested in the intersection of technology and politics.

Transcript

[Snapchat Representative]

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[Stephen Overlea]

Hey, welcome back to POLITICO tech. Today's Friday, November 8th. I'm Stephen Overlea. Silicon Valley leaders had a lot of kind words for President elect Donald Trump after his big win on Tuesday night. Sundar Bachai at Google congratulated him on a decisive victory. Amazon founder Jeff Bezos praised his extraordinary political comeback. And Salesforce CEO Marc Benioff called his win a remarkable achievement and a time of great promise for our nation. Now, business leaders typically congratulate the president to be you catch more flies with honey than with vinegar and all that. But in Trump's case, the flattery may be especially strategic. In his first term, Trump often appeared to base policy decisions on who he liked and who he thought liked him. And in liberal Silicon Valley, Trump found a lot of enemies. Now Adam Kovakevich tells me he predicts a return of Trump's personal grievance agenda. Adam is the CEO of the tech industry group Chamber of Progress, and he thinks companies would be wise to curry favor with Trump and to find common opponents like China. On the show today, Adam explains how he expects tech leaders to approach Trump differently this time around and what he thinks the new administration means for crypto, AI, antitrust, and more. Here's our conversation. Adam, welcome back to POLITICO Tech.

[Adam Kovakevich]

Thanks for having me.

[Stephen Overlea]

So let me sort of high level here from where you sit today. Is a second Trump administration going to be good or bad for tech?

[Adam Kovakevich]

Well, we don't know. But I think what we learned from the first time around is that Trump doesn't come at tech issues from an ideological standpoint or a policy driven standpoint. He comes at at it through a personal standpoint. What's good for him are people on his side or on other people's side? And so I do think that companies having been through the first administration, have a better sense now for how to reach Trump and try to get him on their side.

[Stephen Overlea]

And you describe this as a personal grievance agenda. And we did see this in the first term. You know, we saw Trump regularly take shots, for instance, at Amazon and Jeff Bezos. I mean, since then he's threatened to jail Mark Zuckerberg. I mean, do you anticipate a return to those kinds of attacks? And do you think companies have a different playbook for how to respond now?

[Adam Kovakevich]

Yeah, I think the normal playbook would be Say, okay, what's their policy agenda and who's running policy on this issue? And who's the person at OSTP or the National Economic Council? And, yeah, and companies did some of that during the first Trump administration. But what they really, I think, came to see was, you know, a lot of this came down for to, does Trump like you? Does he like you personally? And does he like your company? Does he think your company is nice to him or not nice to him, or helpful to him or not helpful to him? And, you know, I don't think it's a great way of going about it, but that is, in fact, I think the way he goes about it, and I think that people understand that.

[Stephen Overlea]

Now, is that why we've seen, you know, in the last couple of days, so many tech leaders and other leaders kind of tweeting congratulations to Trump on his win and his comeback? I mean, you see that anytime a president wins to some extent. But it does kind of feel like with Trump, there might be an added layer here of, you know, trying to get in good graces.

[Adam Kovakevich]

I think that people learn two big things about Trump that you're seeing them implement into their strategies now that he's been elected. One is that flattery gets you everywhere, and that if you haven't, and his team has been very clear that if you didn't call, try to call him before the election, they're not going to take your call after the election. That's number one. And I think also with Trump, you know, his own company was not a large company. And so I think that in the first term, we saw that, you know, when he would interact with CEOs of Fortune 50 companies, he was impressed by them. And it meant a lot to him that CEOs of big, successful companies were coming to pay tribute to him, pay homage to him. That was a big deal. So that as very validating. But I think the second thing is that Trump could get on your side if you convinced him that you had a shared enemy. And so, for example, during his first term, he very memorably referred to Margaret Vestayer as that tax lady from Europe. And in part because she was going after Apple on taxes. And so if companies or others can persuade Trump that they have a shared enemy, then I think he's shown that he'll put energy behind beating them up.

[Stephen Overlea]

I have a feeling we'll hear a lot of, you need big tech to be strong against China and rival China arguments. We hear that already. But I could certainly see that picking up in a Trump term.

[Adam Kovakevich]

Yeah, I think that's right. I mean, Trump is not someone who has ever considered himself techie particularly cares about like pro innovation arguments. But I think, like to the extent that he does care about beating China, yes, absolutely. That's a great way to try to get him on your side.

[Stephen Overlea]

I'm curious if you see Elon Musk as kind of a bridge and an ally in a way between Trump and Silicon Valley. Obviously they have forged a pretty close relationship in recent months. Does that help, you know, maybe soften some of these blows? And is that kind of a way into the Trump circle for folks in tech?

[Adam Kovakevich]

You know, I think it's probably more complicated than that for the reason that I don't think that other companies are necessarily going to go through Elon Musk to get to Trump. They're going to want to have their own relationship. Elana had clearly has a personal relationship with Trump, put a lot of personal stake on the line to get Trump elected, isn't going to want to necessarily share that with other companies and by the way, is at odds with other companies over things like AI open versus closed X risk, those kinds of things. And in terms of his own business, it's complicated. You talk about China. Elon has a lot of complicated relationships with China because of Tesla. And so I don't know, I don't see that carrying over to other elements of the tech industry so much that as it carries over to other elements of Musk's business empire.

[Stephen Overlea]

Right. Well, let's talk about policy areas. You know, there is an expectation, I think, that Trump will be much less keen on regulation than we have seen from the Biden administration, especially with a Republican Senate and perhaps a Republican House behind him. I mean, is that, you know, a cause for celebration for your members who are in crypto and fintech and some of these industries that the Biden administration was looking to put new rules on.

[Adam Kovakevich]

Yeah, I think that there are certain areas where Trump is going to behave fairly, you know, like a conventional Republican in terms of scaling back agency level action against industry that Biden had started. So I, for example, think about things like some of the lawsuits against crypto at the SEC or things, you know, fintech rules at this Consumer Financial Protection Bureau or some of the things that, you know, Labor Department did around reclassifying independent contractors. You know, the Trump agencies will probably scale back all of that. But then you look at an issue like crypto and what people in, you know, the crypto space want is not just the SEC off their back. That's definitely a big one. But what they really want is rules of the road. And so that really is about partly about the SEC and other agencies putting out clear rules. But ideally they'd like to have rules out of Congress, too. In order to get rules out of Congress, you really are going to need a bipartisan coalition because your margins in the Senate, the Republican margins in the Senate are not filibuster proof. And the House margins I think are going to be pretty close as well. So, you know. Yeah. Yes. I think you'll see them. I think you'll see a scaling back of some, but not all regulation that's been painful to industry. But then there's other areas where I think there's still going to be a desire for Congress to put more regulation in place.

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[Stephen Overlea]

Let's talk antitrust as well, because obviously speaking of agencies, the Federal Trade Commission has been very active under Biden and under chair Lina Khan. But even before Biden, Donald Trump's DOJ NFT were also fairly active and fairly critical in some ways of big tech and its market power. What does that issue look like under a Trump 2.0?

[Adam Kovakevich]

Yeah. So right now we have five FTC or DOJ antitrust lawsuits against Big Tech. And two of them were started by the first Trump administration. So no one should expect those lawsuits to go away. I do think that it might affect the remedy and litigation strategy around some of those suits. So for example, the DOJ won the case against Google that Trump started right around Google search, search, distribution deals, and now they're moving into the remedies phase. And Jonathan Cantor, who leads the DOJ antitrust division, has put forward a very wide ranging set of potential remedies, including possible breakup. Trump said, you know, several weeks ago he didn't think he wanted to see Google broken up. But this is going to be interesting because the DOJ has to submit its final remedy proposal on November 20th. And then there's going to be a remedy trial in the spring. There will theoretically be a change in personnel. Right. And so that's going to affect kind of that could affect what remedies they decided to pursue in a case like that. The other thing to keep in mind is that, you know, probably the signature antitrust case that was brought under the first Trump administration was the administration's challenge to the ATT Time Warner deal.

[Stephen Overlea]

Yes.

[Adam Kovakevich]

And you know, this was by all accounts brought because Trump didn't like CNN's coverage of him. And that was, you know, a huge driver. And this has been extensively reported on after the fact, including, you know, from reporting to people at the companies. And so this is kind of why I sort of think of it like we've been having a debate the last four years in antitrust about the traditional consumer welfare standard, whether, you know, neo brandicians want to shift it to something new. And I think what we're going to see under Trump is a Trump welfare stand standard. Is this company nice? To me, when he was asked recently about breaking Google up, his first answer was, well, you know, I don't like all the search results about me.

[Stephen Overlea]

Right, right.

[Adam Kovakevich]

It's interesting because Vance has articulated a view that he'd like to end the chill over mergers and acquisitions under the FTC and doj, but he still likes the lawsuits against Big Tech because he sees that as leverage against the companies around censorship concerns. So some of these lawsuits may serve in their view as leverage over the companies around speech.

[Stephen Overlea]

When we saw this in the first Trump administration too, kind of some novel arguments in antitrust around, you know, anti competitive behavior not just being a problem for price, but being a problem for free speech. Right. The conservative viewpoints on a lack of free speech. Was that the sign of kind of a unhealthy monopolistic market? And so, yeah, I could imagine a return to some of those arguments. I mean, it seems like that could.

[Adam Kovakevich]

I could too. But it's also interesting because we now have a very robust right leaning ecosystem of platforms. Right. We've got X, we've got Rumble, right.

[Stephen Overlea]

X and Truth Social.

[Adam Kovakevich]

Look, I think if you're concerned about a service like Threads or Facebook or YouTube engaging in what you view as anti conservative censorship, you've got plenty of places to go now. And so I think that it's kind of undermined the competition talking point there.

[Stephen Overlea]

You know, I asked you earlier about whether Elon Musk might be kind of an ally. I am curious also about Vice President elect J.D. vance because he is someone who has had obviously a lot of backing from Peter Thiel. He worked in venture capital, including in Silicon Valley. So he does have ties to the tech world. How do those help or hurt the industry with this new administration taking over?

[Adam Kovakevich]

Well, I think it's unclear you know, that vice president is interesting role because it kind of depends on what the vice president chooses to be involved in and the relationship they have with the president.

[Stephen Overlea]

Right.

[Adam Kovakevich]

And so we haven't yet really gotten a clear sense of the areas that Vance might try to put his stamp on. This certainly could be one of them. There's, I think, some inherent tensions. Right. So, you know, Vance has said that he wants to have, you know, more mergers and acquisitions approved by the antitrust authorities, that that's how to chill over investment. And I agree with him on that point. But then he also says that he doesn't want big tech to get any bigger. Well, the conflict there is that in a lot of cases, the natural. In some cases, the only acquirers of smaller companies are the big tech companies.

[Stephen Overlea]

Right.

[Adam Kovakevich]

And so I don't know how they're going to reconcile those two things. If you're advocating for kind of small tech, do you or do you not want big tech to be allowed to buy small tech? And if. And if you don't, who is going to buy small tech? Is it medium tech? That's less common? And so I think there's some contradictions and tensions there that they're going to have to work out.

[Stephen Overlea]

Well, let's talk about artificial intelligence, a policy issue that has dominated really the last year and a half in a lot of ways in tech policy. You made an interesting point, I thought, which is a number of states are already kind of taking the lead when it comes to AI safety legislation. Legislation, because Congress has not yet acted in that regard. And you seem to think that will pick up with Republicans now controlling the Senate and the White House. Play that out for me. Sure.

[Adam Kovakevich]

Well, first, Congress's rate of bill passage this year is 3%. Colorado's was 75%, and California's was like 30%. So if you're just playing the odds, the odds of bill passage are much higher in blue states, and also, by the way, in deep red states, too, they have a very high bill passage rate. And so where did AI bills actually become law this year? In Colorado and California, two blue states. And, you know, some of that was being pushed by particular groups who've been promoting AI safety. And obviously, the Biden administration's executive order on AI includes things like AI safety. But, you know, Trump has been very clear that he's going to rescind the Biden executive order on AI. So what I think is going to happen is that people who are concerned about AI safety and other aspects of AI are probably going to further shift their advocacy for legislation to blue states and some red states. We've already seen a bill in Texas, but primarily blue states. And you know, that will be where a lot of the true legislative action is.

[Stephen Overlea]

You know, obviously we're, we're reading a lot of tea leaves right now in terms of what the next four years will mean for every policy area, tech included. I wonder though, if there is kind of a policy area you're most worried about with Trump's return. I mean, is it tougher antitrust? Is it a target on the back of Section 230 protections? You know, what, what has you concerned at this point?

[Adam Kovakevich]

I think the biggest, just based on history has been, has been content moderation and speech. You know, we've obviously had some big Supreme Court cases around Texas and Florida's laws that essentially ban content moderation. You, I think the last couple years, Republicans in particular in the House have been active in accusing Democrats of jawboning online platforms to get them to take down content. But the reality is Republicans do this too. The Trump campaign asked Musk to remove some unfavorable content from X, which he did. They've intervened to try to reinstate right wing accounts. So I think he will surely work the refs of social media in the same way. And I think that'll, you know, probably create some tensions because the reality is that if you want to have a healthy, thriving business in social media, you, you engage in content moderation. There's a reason why Instagram is a great business and X is not. Instagram has made itself a advertiser friendly, a positive place generally to hang out, and they engage in a lot of content moderation, whereas X engages in almost no content moderation and has really no advertising business, no business to speak of at all. And so I think that's going to be a big tension. I am optimistic that that creates a moment for Democrats to kind of rediscover the virtues of things like section 230, which incentivizes content moderation by providing liability protection for it, as well as saying, you know, yeah, it is a good thing that platforms have their own First Amendment rights to moderate, which had been affirmed in the net choice cases. And that that's something, you know, we appreciate that they are not going to do everything that Trump or any other political actor asked them to do in terms of content moderation.

[Stephen Overlea]

Well, listen, Adam, thanks for being back here on Politico Tech.

[Adam Kovakevich]

Thank you.

[Stephen Overlea]

That's all for today's Politico Tech. If you enjoy Politico Tech. Send it to a friend and subscribe on Apple, Spotify or your preferred podcast player. And for more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Music in our show comes from the mysterious Breakmaster Cylinder. Our managing producer is Annie Reese. Our producer is Afraid Abdullah. And our editors are Steve Heuser, Daniela Cheslow, and Louisa Savage. I'm Stephen Overlea. See you back here on Monday.