Trump takes issue with EU actions against U.S. big tech

Trump's focus on U.S. global leadership includes big tech

Several big tech leaders attended Trump's inauguration Monday, including Google CEO Sundar Pichai, Amazon founder Jeff Bezos and Meta CEO Mark Zuckerberg.

Rob Atkinson, president of the Information Technology and Innovation Foundation, said while big tech leaders likely hope to avoid U.S. scrutiny by joining Trump, their presence also indicates that Trump believes big tech needs to be a core component of reasserting U.S. global leadership.

"That's the other reason he allowed that alignment to occur," Atkinson said. "To send a clear message that 'America's going to dominate on so many things, energy, we're also going to keep dominating on technology. These other countries that think they can do damage to us, they better think twice.'"

Atkinson said Trump further conveyed that message this week when he issued a memorandum to the U.S. Secretary of the Treasury regarding the Organization for Economic Co-operation and Development (OECD) global tax deal. Trump said the global tax deal no longer has force or effect within the U.S. International countries in 2021 agreed to a minimum global corporate tax rate of 15% for multinational companies to address "tax challenges arising from the digitalization and the globalization of the economy," according to OECD.

In the memorandum, Trump said that due to the global tax deal and "other discriminatory foreign tax practices," U.S. companies faced retaliatory global tax regimes if they did not comply. Atkinson said Trump's mention of other discriminatory tax practices likely refers to digital service taxes, something the EU imposes on large digital companies.

The memorandum signals a trend within the Republican party and Trump administration regarding concerns that international bodies "don't have American values at heart," Atkinson said.

While Trump will continue working with allies, Atkinson said he does expect to see Trump vocalize more issues with the U.S.-EU relationship differently than former President Joe Biden's administration. "The Biden administration simply would not push back on the Europeans," he added.

Still, though Trump will be more favorable to big tech, particularly against EU taxes and regulations, it doesn't mean they're completely off the hook in the U.S., Atkinson said. Trump's appointments to federal agencies, including Gail Slater to lead the antitrust division within the U.S. Department of Justice and Mark Meador as a commissioner on the Federal Trade Commission, indicate there will continue to be skepticism of big tech.

Trump's deregulation efforts extend to AI

Trump repealed Biden's executive order on artificial intelligence in the flurry of executive orders and other initiatives from the administration this week. The Biden order focused on creating safety and security guardrails for AI systems used by federal agencies, as well as requiring safety tests for large AI developers.

Congress never passed an overarching AI law in the U.S. under the Biden administration, something that's even more unlikely under the Trump administration, said Forrester analyst Alla Valente. That means state AI laws, and existing state data privacy and federal consumer protection laws, will continue to function as safeguards for AI systems.

"Organizations still have requirements around AI," Valente said. "You have several states that have their own AI laws and those need to be followed. You have certain industries that are pushing AI governance and guardrails, namely insurance, medical devices and others."

Valente said companies doing business in the EU also have to comply with the EU AI Act, which lists requirements for AI systems that fall into different risk categories.

Indeed, Gartner analyst Lydia Clougherty Jones said the onus for AI safety and oversight would shift to U.S. state and local governments while innovation and ambition for U.S. global leadership in AI become priorities at the federal level.

The patchwork of state laws will invariably present challenges for enterprise businesses as they navigate the "wide swathe of conflicting public policies, such as differing priorities on which harms to address, which can lead to conflicting compliance obligations across the very same activity."

Additionally, as the Trump administration focuses on U.S. competitiveness in AI, it will lead to increased reliance on the private sector, Clougherty Jones said. As an example, she pointed to Trump's announcement of Stargate, a $500 billion investment in AI infrastructure backed by tech companies OpenAI, Oracle and Softbank.

Clougherty Jones said the Stargate partnership signals a well-funded initiative to "safeguard the U.S.'s competitiveness and technology leadership status."

"While there may continue to be some form of responsible AI dialogue, it may be outside of federal policy," she said. "It will also likely be aligned with innovation and competitive advantage in place of having an exclusive focus on societal-based harms."

Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.