What the Trump election means for Microsoft’s AI dreams

With last week’s US elections, everything changed for the tech industry, especially for Microsoft. Given President-elect Donald J. Trump’s penchant for incendiary statements, off-the-cuff decisions, plans to impose massive tariffs, and willingness to use the power of his office for personal vendettas, almost anything could happen.

But based on Trump’s past actions, who he turns to for tech and economic advice, and what he’s said on the campaign trail, there’s a lot we know about how Microsoft will likely be affected by his upcoming four-year reign. 

There’s so much, in fact, that it’s more than can be covered in one column. Here, I’ll look at how Trump’s likely plans for AI will affect the company. In Part 2, I’ll look at tariffs, antitrust and climate change issues, and how Trump’s actions often are based more on personal grievances than policy.

Here’s how the president-elect’s likely AI plans could help or hurt the company.

Letting AI run free

Microsoft is the world leader in AI and has built generative AI (genAI) copilots into its entire product line. That was just the start. The company continues to invest billions and has bet its future on the technology. As genAI goes, so goes Microsoft. That means any actions Trump takes could dramatically affect Microsoft’s present and future. 

Trump has said plenty about tech through the years, but surprisingly little about AI. Based on his big tech backers, general outlook on technology, and the few things he’s said about it, we can get some sense of what he’ll do.

One of his biggest tech boosters is venture capitalist Marc Andreessen, who is opposed to any regulation of AI, and believes AI development should be absolutely unfettered. Elon Musk wields even more influence with Trump than Andreessen, though, and has become his most trusted tech adviser. Musk is generally against any government regulation over tech, but when it comes to AI, he’s a bit more nuanced.

Musk has often spoken about his fears that unchecked AI could lead to the destruction of the human race. He also supported a California bill that would have required AI to undergo safety testing before being deployed. As he wrote on X: ‘For over 20 years, I have been an advocate for AI regulation, just as we regulate any product/technology that is a potential risk to the public.” 

The bill was passed by the California legislature, but Gov. Gavin Newsom vetoed it.

That makes it sound as if Musk is all in on regulation. But that’s not really the case. His primary worry is that AI might eventually represent an existential threat to mankind — and that’s all he wants to regulate. He’s against regulations around existing real-world issues  such as intellectual property theft, or AI’s use to violate civil rights, its role in misinformation, privacy violations, its effect on jobs and more.

What this all means is that it’s unlikely AI will face much regulation under Trump. The first thing he’ll probably do is rescind Biden’s well-thought-out AI executive order that addresses everything from safety and security measures to issues related to bias and civil rights, and oversight over how genAI is produced. Because it was only an executive order, it didn’t carry the full force of law. But it did have some effect. And it was an ideal roadmap for how Congress could act on AI regulation if it wanted to.

Samuel Hammond, a senior economist at the Foundation for American Innovation, was blunt about what would happen to that order. He told Vox, “There will likely be a day one repeal of the Biden executive order on AI.”

Trump will also almost certainly want to boost AI to make sure the US leads China in it.  He told the right-wing influencer Logan Paul in an interview, “We have to be at the forefront [of AI]. It’s going to happen. And if it’s going to happen, we have to take the lead over China.”

Finally, in July The Washington Post reported that Trump’s tech boosters “are drafting a sweeping AI executive order that would launch a series of ‘Manhattan Projects’ to develop military technology and immediately review ‘unnecessary and burdensome regulations.’

How this affects Microsoft

What does all this mean for Microsoft? Under Trump it’s going to be full speed ahead on AI. Any regulations are likely to cover only the existential danger AI could pose to humanity, and not any of the many dangers it currently poses. That means the company will be free to develop AI in pretty much any way it wants.

There’s more good news for Microsoft than just being free of regulations. Because it is the world’s most powerful AI company, the Trump administration will almost certainly turn to Microsoft for help in its fight against China — and pay the company well for it. The Biden administration has already done so, much to Microsoft’s benefit. The administration brokered a deal in which Microsoft invested $1.5 billion in a powerful genAI company based in the United Arab Emirates, which then cut its ties to China and aligned with the US. 

In addition, there will be direct government AI contracts. Expect Trump to pour billions into the military use of AI. Microsoft has had contracts with the US military for decades. In just the past few years, it’s gotten a $22 billion contract to provide the US Army with 120,000 AR headsets and billions for a Joint Warfighting Cloud Capability (JWCC) contract to establish what the company calls “an enterprise-level tactical cloud.”

A new generation of AI-related military contracts under Trump will fatten the company’s bottom line even more.

The Trump wild card

All this requires that Trump acts rationally, though, which rarely occurs. If Microsoft wants those government contracts and wants to be free from regulation, it’s going to have to be obsequious to Trump, praise him when necessary and stay away from even the slightest hint of criticism. It’s going to have to close its eyes to the worst of his actions and behavior. It’s also going to have to do the same with Musk, who is as mercurial and thin-skinned as Trump. 

If Microsoft does all that, its profits will be sky high. As for what price in self-respect and its sense of itself as a moral company, only Microsoft CEO Satya Nadella and those who work there know.