A fascinating if ominous power struggle is dividing the Trump administration over the future of AI.
Technology titans, including Mark Zuckerberg of Meta, Oracle’s Larry Ellison, Sam Altman of OpenAI, Satya Nadella of Microsoft, Amazon founder Jeff Bezos, Elon Musk of xAI, Jensen Huang of Nvidia and Sundar Pichai of Alphabet/Google have all been lobbying to pre-empt attempts by individual states to regulate AI.
Their champion is David Sacks, Trump’s AI and cryptocurrency tsar. Stoked by Chinese competition, Trump agitated on Truth Social: “Investment in AI is helping to make the US Economy the ‘HOTTEST’ in the World, but overregulation by the States is threatening to undermine this Major Growth ‘Engine’.”
Mike Davis, a senior legal and media adviser to Trump, is successfully fomenting tech bro opposition. Steve Bannon is simultaneously outside the White House virulently sniping that “techno-feudalism” empowers the elites and harms the Maga base.
They together observe that the tech aristocracy have enormous power but no mandate. Robots are taking jobs. AI gravely threatens employment in manufacturing, warehousing and supply chains, logistics and trucking, retail and agriculture, call centres and the back office.
AI destroys privacy and places child safety at risk.
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US vice-president JD Vance, seen as a Silicon Valley insider, may become perilously exposed by the rising Maga groundswell.
Trump is an unpredictable strategist and will keep both sides lobbying, vying for his personal favour. While he may appear attuned to arguments for national competitiveness, he could rapidly U-turn to tame Silicon Valley.
Under pressure from those Maga communities perceived abandoned due to automation, he could, for example, impose penalties on companies that replace workers by AI.
At Davos last month, Nadella worried that AI would become a speculative bubble unless the technology were widely adopted.
Shortly afterwards Microsoft’s stock price fell heavily after its January earnings announcement and has continued a downward drift, as investors express strong concern that customers are seeing disappointing value from AI, while Microsoft continues to heavily invest.
Furthermore, the company admitted that nearly half of the future commitments to its Azure cloud technology are at risk, due to a concentration on just a single customer, Altman’s OpenAI.
Ellison’s Oracle is similarly exposed, with a $300 billion commitment by OpenAI to buy its services. Oracle has also raised $38 billion of debt to fund data centres specifically for OpenAI.
OpenAI itself is now under financial pressure. Altman has introduced advertising into ChatGPT despite previously asserting that such revenue would always be a very last resort. Huang has now stepped back from a $100 billion investment in OpenAI, which was announced just last September, expressing concerns and removing Nvidia’s insurance policy that OpenAI would remain sufficiently viable to purchase Nvidia’s products.
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What would it mean for Ireland and our European partners if AI does dominate and Maga fears for jobs and safety are realised? Equally, what if the AI boom fails?
The threat to jobs in our own economy from AI is as real as it is among the Maga homelands. Irish employment in digital and virtual offerings, including call centres, software development and support, telesales and marketing, financial and legal services, could all diminish if AI can eventually offer reliable and consistent value.
However, the dangers would be compounded if Trump then attempted to deflect Maga criticism of AI for the loss of jobs in America, instead towards Ireland and the EU for taking these jobs away. Dramatising an easy-to-explain external reason is more media-friendly than explaining the nuances of AI adoption.
Encouraging US digital service companies to bring home jobs would be easier than forcing the return of companies with capital-intensive and highly regulated manufacturing, especially pharmaceuticals.
Targeting tariffs on US companies with IP held in Ireland may lead them to conclude it just costs too much to position their businesses here.
Equally, any dramatic collapse of the AI sector would not just have consequences in Wall Street but also in a heavy loss of American construction jobs resulting in data centre ghost estates.
Trump might then try to blame the resulting economic demise on over-regulation across the EU of AI technology making Wall Street wary, thus damaging AI adoption and momentum. Jobs at home in the US are lost because European companies are overprotected.
The Canadian prime minister Mark Carney asserted at Davos that there was a rupture, not just a transition, in the global order. Middle powers, such as Canada and the EU, must thus form coalitions if “great powers abandon even the pretence of rules and values for the unhindered pursuit of their power and interests”.
It seems likely that most EU governments will methodically reduce coupling to the US, not least by diversifying financial assets away from US treasuries and dependence on the dollar.
European energy security, defence investments and supply chains are being reoriented away from the US, although some US alternatives may currently be cheaper.
Even should the next US administration reverse many of the current US policies, the fact that the US constitutional structures can enable so much international uncertainty and instability is leading to strategic reassessment of current and future American partnerships.