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- [00:01]
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- [00:32]
Stephen Overlea
Hey, welcome back to Politico Tech and happy New year. Today's Monday, January 6th. I'm your host, Stephen Overle. The year ahead will be a busy one for tech. Republicans now control Congress. Donald Trump is returning to the White House, and they've laid out a tech agenda squarely focused on beating China. But the past two weeks have offered an early glimpse at the policy divisions to come. First, you had tech billionaire Elon Musk tanking a spending agreement in the House, causing Congress to scramble and nearly leading to a government shutdown. Then a fierce online battle broke out between Trump supporters in Silicon Valley and his longtime MAGA base over visas for highly skilled immigrants. Tech leaders want more workers from overseas, even as other Trump factions call for mass deportations. To help set expectations for the year ahead, I called up Digital Future Daily author Derek Robertson. We talked about the key personalities driving the policy and the tensions to watch out for. Here's our conversation. Hey, Derek, welcome back to Politico Tech.
- [01:54]
Derek Robertson
Thank you very much. And happy New Year, Stephen.
- [01:57]
Stephen Overlea
Yeah, happy 2025. A lot to look ahead to, I think, in our world. I think the tech beat is going to be busier than ever with so many major questions looming from regulation to the incoming administration. I want to start with some of the personalities we'll be watching here. And to me, the biggest one is Elon Musk. I mean, since Trump's election last year, he's really flexed a lot of muscle in Washington just by being a Trump confidant and running the Department of Government Efficiency. This, like, government reform effort. What are you expecting from Musk this year?
- [02:34]
Derek Robertson
That is, you know, the million, billion, trillion dollar question.
- [02:38]
Stephen Overlea
I know.
- [02:40]
Derek Robertson
I mean, at this point, his involvement in governance stretches from his involvement with Doge and his desire to cut the federal bureaucracy to most strikingly, I think, and what I've written about in Digital Future Daily, his attempt to essentially govern the United States and Congress to some extent via X, the social media platform that he owns. The great writer John Ganz, who wrote one of the best books of 2024, when the clock Broke, which I'll shamelessly plug here, even though it's not my book. He wrote a blog post about this that I thought just had the most striking explanatory title imaginable. It was titled Elon Musk Is Ross Perot on Crack. Ross Perot was also a, you know, he was a computer scientist, which. Which Elon Musk is not. But he was a technocrat who once proposed the idea of governing the United States effectively by electronic plebiscite. And the point that Ganz makes in this essay is that Musk is essentially trying to do the same thing with X. The striking difference that I've observed with Elon is that his governing philosophy seems to be a direct reflection of the kind of amorphous consensus that's generated on the right wing part of X. So Iman not only wants to govern by plebiscite in the manner of Ross Perot, he is the plebiscite in his ownership of this website and the fact that his personal beliefs reflect the consensus that is created there. So what I think you are going to see in 2025 is, and the fascinating thing will be to see if this conflicts with Trump Musk attempting to position himself as the vox populi who is holding Republicans who control, for now, governance of, you know, both chambers of Congress and all three branches of the federal government control it through X. And that is going to be an extremely unpredictable phenomenon.
- [04:39]
Stephen Overlea
Yeah, I just keep thinking back to all of the railing that Musk and others did against unelected bureaucrats and this notion of them controlling and making all the calls in Washington. And no one elected Elon Musk, right? No one elected him to sort of make these decisions or to weigh in as, you know, much as he has on so many policy matters. I mean, of course, you know, anyone can weigh in on Twitter, but when you have, you know, over 200 million followers and you're the richest man in the world, your voice travels a lot further.
- [05:11]
Derek Robertson
Well, this adheres to the cardinal rule of politics, which is that when you do something that you think is fundamentally violates the rules of democracy, it's actually good and justifiable. And when your opponents do it, it then fundamentally violates the rules of democracy and should be rejected and banned from public life.
- [05:28]
Stephen Overlea
You mean there's hypocrisy in politics? I mean, I would never say that.
- [05:32]
Derek Robertson
On the Politico tech podcast, right?
- [05:34]
Stephen Overlea
No, no, of course not. I do think with Musk, though, it will be interesting to watch him try to deliver on all of the promises he's made. Especially I think, with Doge, this government reform effort, there have been a lot of attempts to tame the government beast for decades, most of which have not been very success. I obviously, though I'll say with Musk, he seems to be someone who thrives on being, like, counted down and out. Right? There are people who thought his involvement in Trump's reelection effort was misguided and that he was mishandling that and Trump won. And so I'm certainly not going to count Elon Musk down and out, but he's got a big task ahead of him that he now has to actually deliver on.
- [06:17]
Derek Robertson
I mean, he's very effectively. Causality in politics is something that's almost impossible to determine. You know, there's a whole academic field that attempts to determine this. This is what, you know, our great journalists do every single day. And it's a worthy endeavor, but it's incredibly hard to determine what was, you know, what factors caused this political outcome, especially in something as massive and unruly as American national electoral politics. So one can say, you know, honest people can disagree whether Elon Musk meaningfully swayed the election or whether he simply has good political instincts, you know, whether, whether he identified and rode a wave of right wing sentiment that won this election for Trump in a fairly decisive fashion. So this is something for me that becomes more salient as I think about the push and pull between him and Trump. You know, the most glaring example of this so far, I think, has been Musk nuking the continuing resolution in Congress with a campaign on X. How many headaches does Musk create for unified Republican governance? Before Trump starts wondering, how much do I actually owe this guy? Do I owe him my election? Or was this kind of an overdetermined result, that he is, after all, the founder, creator, leader of this movement that Musk had now joined and now supports. So that will be a fascinating tension to watch.
- [07:46]
Stephen Overlea
Yeah, absolutely. Who are some of the other kind of personalities we're watching? I mean, we talked so much last year about folks in Silicon Valley who came out in support for Trump during his election. Some of those folks are now going to be in Washington. Right. I'm thinking of the incoming AIs are David Sachs and, you know, an Undersecretary of State, Jacob Helberg, both of whom were big Trump supporters from kind of the tech world. What are you expecting once these folks actually get in government and they actually make the physical, but also like the mental shift from Silicon Valley to Washington?
- [08:21]
Derek Robertson
So I have been struck by the extent to which and this has been documented in Teddy Schleifer's reporting at the New York Times very extensively. The sort of right wing venture capital cadre has been deeply involved in the Trump transition. These are figures like Marc Andreessen of Andreessen Horowitz, Ken Howery, who was ambassador to Sweden during Trump's first term and is a close friend of elon Musk. Sean McGuire from Sequoia Capital, who seems to do nothing but tweet about MAGA stuff all day, every day. And so if you think about what all of these figures have in common and how their influence might be reflected in how the second Trump administration governs, I think it's actually extremely simple. And it's the exact same thing that Musk and Vivek Ramaswamy want through D, which is a massive deregulatory blitz. Once upon a time, I am just old enough to remember when figures like this simply referred to themselves as libertarians. That term seems to be out, out of vogue these days. People get kind of uncomfortable when I bring it up to them in this world because I think they associate it with circa 2008, Ron Paul, Fedora wearing, legalized marijuana school of libertarianism. Those people are definitely still out there. But their laissez faire, market oriented, deregulatory philosophy is alive and well and it's at the beating heart of the recommendations that these people are making to Trump's administration. I mean, in Andreessen's techno optimist manifesto, he has this list of patron saints at the end of it, and it includes all the classical libertarian philosophers like Hayek, Mises, et cetera. I think you will see weakening of agencies which will be accelerated by the Chevron decision. Obviously massive cuts across the board in Congress. As Elon pushed forward with the continuing resolution at the end of 2024, you are going to see extreme, essentially austerity government, I think, with maybe a few selective investments in industries that they deem necessary for national security. Most of these people are, you know, Yuan, notably aside, are big China hawks. You might see targeted investments there, but yes, deregulation up and down the board.
- [10:28]
Stephen Overlea
You mentioned China and the number of China hawks that will be in this administration. I do think tensions with China are going to only continue under Trump. We'll see what happens with TikTok. The Supreme Court is going to be weighing in on that in the coming days and they are facing a ban. But even beyond the issue of TikTok, I mean, things like export controls, obviously Trump has a very aggressive tariff agenda. He's coming in with to what degree do you expect the China issue to really dominate the conversation around tech in the year ahead?
- [10:57]
Derek Robertson
I think it's huge. I think it's the, you know, it's the rationale for much of this deregulatory agenda. You I was talking before about how a certain form of old school Ron Paul influenced libertarianism is kind of culturally outre if the actual economic beliefs held in it aren't still very prevalent. But if a worship of the free market is not at the center of your persuasive pitch to the public for this agenda, something has to take its place. And I think that something is China hawkishness. Americans are in kind of a populist, anti billionaire, anti CEO mood right now. You don't get them to support your deregulatory agenda by being like Mitt Romney and saying corporations are people, my friend, and sort of appealing to the dignity and Promethean power of the John Galt figure. You do it. Even if I think that belief is still pretty widely held. You do it by saying if we don't let American industry just let it rip and do whatever they want and kind of sweep away regulatory obstacles to economics, economic expansion, China is going to beat us. And we've seen, I mean, that's something that we saw through the Biden administration when it comes to tech policy as well. This is not a new phenomenon, but I think it's going to accelerate in 2025.
- [12:18]
Stephen Overlea
Yeah, it's sort of one of the points of continuity, I think, from the first Trump administration to Biden and now probably into the second Trump administration with slightly different flavors here and there. But you know, as we've said many times, Biden kept a lot of Trump's China policies in place for his four years. And so it's. I wouldn't expect Trump to now go ahead and reverse policy decisions he made in his first term. When it comes to China. You know, one area that is not necessarily the sexiest to talk about, but I do think is really worth watching, is how the government itself buys and uses technology. Because all of this focus, especially coming from Elon Musk, on reforming the government, on cutting its costs, I think there's a role for tech to play in that. And government modernization has long been talked about. But again, like we were saying earlier, if there's sort of a force strong enough to make real change within government, perhaps that force is Elon Musk and his doge effort.
- [13:20]
Derek Robertson
Yeah, this is kind of a new fixation for me in recent months, since the DOGE project was announced because you do find a surprising amount of bipartisan support for government reform and for using technology to reform outdated government systems. This was in the aforementioned bipartisan Task Force AI report that was published in December. It recommended, just as DOGE has recommended, using AI tools to identify outdated code and language and laws in the Federal Register and remove them. And this is something actually again started during the first Trump administration. It was continued by the Biden administration at the Department of Health and Human Services, and they quite successfully did this. So the interesting what I'm going to be watching is whether Musk's deregulatory project and whether his desire to slash the bureaucracy actually hurts this goal. Because I've spoken several times now with Jennifer Palka, who who was a leading technologist in the Obama administration and she's a fellow at the Niskanin Center. Now she has written fairly extensively and in detail about how federal civil service rules essentially demand that the contract employees, the newer employees in the federal bureaucracy, must be the first to go if you are cutting from the federal workforce. This is in statutory law. So what she argues is that effectively this means Musk's cuts to the bureaucracy are going to take out all of the technologists who are most familiar with these tools and most eager to reform the government using technology and leave in place people who are more committed to a slow moving vision of federal bureaucracy that Elon Musk ostensibly opposes. I don't know if Elon Musk is a CEO and always imagines that he will be able to take some sort of Caesar like action to swipe his pen and make it so that's not true. I don't know whether that's going to happen, but it's certainly something to watch.
- [15:23]
Stephen Overlea
Yeah. Musk's relationship with and thoughts on unions, for instance, are well known. And so how he wants to approach the federal workforce may be very different from how others in Washington would approach it or how it's been approached in the past. And so that's a tension point to watch.
- [15:38]
Derek Robertson
Yeah. Going from the first president in many, many, many years to be very publicly and ag pro union to one who was recently on a podcast bragging with Elon Musk about how they both hate paying workers overtime. It's going to cause some whiplash when it comes to these staffing decisions, I think.
- [16:02]
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- [16:26]
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- [16:32]
Stephen Overlea
We know that Washington's tech priorities in many ways are shaped by industry itself. You know, AI wasn't being talked about in Washington much two years ago. Then OpenAI and ChatGPT come along and all of a sudden everyone's talking about AI. You know, we didn't know that Musk would be the figure he is in Washington a year ago. What factors beyond the Beltway do you think are worth looking out for?
- [16:58]
Derek Robertson
Hmm, that's a really interesting question. Two things come to mind for me. One of them is pretty prosaic and one of them is a little more philosophical. So if you'll bear with me on this, the first one, the more prosaic one, there have been very significant advances in making quantum computing tools more powerful, easier to use, more practically applicable, and soon, I think. And you know, NIST has been working on quantum proofing American cyberspace pretty extensively. But I think you might, it might be sooner rather than later that we start to see meaningful incursions, cyber incursions and hacks using quantum technology. And I think that is going to turbocharge the China hawkishness that we were talking about before. Because China using scary new types of computers to break into American critical systems. That is a rhetorical and in many ways just a. A real five alarm fire that government will need to respond to. And that's not to say that they are going to be caught off guard by this. This is a subject that people in the quantum and cybersecurity fields have been exploring at length for many years now. But it seems like we're getting closer to kind of the event horizon where these things could become real. And I think that will majorly heat up the geopolitical tensions with China. On the other hand, something that I think is still very poorly understood by people. I don't mean to sound like an accusatory populist myself, but something that's poorly understood by people in the Beltway is the extent to which technological trends, I think, lead Americans to a place where behavior that would be perceived as extreme becomes the norm. We do not necessarily live in a uniquely violent era. You only have to look back to the 1970s and the 1980s for spates of plane hijackings, assassination attempts, things like this. But it's very striking to me when you look at recent instances of high profile crimes. And the two things that I'm thinking of are the Madison, Wisconsin school shooter and the United Healthcare CEO, Sassan. And both of these people, it was almost immediately discovered after they were identified, were deeply embedded in online communities that essentially, I hesitate to establish direct causation here, but played a role in kind of radicalizing them and convincing them that radical sort of direct, violent action was necessary. And something that I think the Beltway still has not gotten its arms around is the extent to which all of these technological trends have major social ramifications.
- [19:45]
Stephen Overlea
I think that is a really important point. And we were talking at the end of last year about the Romanian elections and the way TikTok was manipulated in part using bots and automated accounts. And yeah, the dark underbelly of the web continues to present itself in more drastic and severe and consequential ways. And so there's really not been any serious grappling with that at this point. And that can only go on for so long. I think the only thing I think I would add to what you said that I'm watching in terms of external factors is really nuclear energy. You know, the tech industry is obsessed with nuclear energy and this idea that we really need that to power data centers and other AI infrastructure. And so when you combine this very influential industry driving toward this technology, plus an administration with a deregulation agenda, a deregulation mindset, I think there's a recipe for some real potential movement and action in that space as well.
- [20:50]
Derek Robertson
Yeah, no doubt the era of the. The dream of the small modular reactor is not dead. There will be what's. What else is going to power our Mars colony. Come on, this is. This is a necessity. This is a national priority.
- [21:04]
Stephen Overlea
National priority, exactly. Listen, Derek, so much to follow this. Thanks for being here to kick off the podcast in 2025.
- [21:11]
Derek Robertson
Yeah, thank you, Steven. Godspeed.
- [21:15]
Stephen Overlea
That's all for today's Politico Tech. If you enjoy Politico Tech, be sure to subscribe. And for more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Our managing producer is Annie Reiss. Our producer is Afra Abdullah. I am Stephen Overlea. See you back here tomorrow.