Now that the dust has settled – a little – let’s take a quick look at Donald Trump’s tech-sector moves so far as he begins his second presidential term.
1. Rocket Lab’s Mars boost
Rocket Lab shares – already on an extended bull run – jumped
Technology Insider: Ten quickfire takes on Trump’s tech moves so far - and their impact on NZ
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US President Donald Trump used his first days in office to issue a blizzard of executive orders pertaining to issues including cryptocurrency, TikTok, EVs and artificial intelligence. Photo / Getty Images
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In the case of Rocket Lab, there’s reason for investors to cheer Trump’s mention of the Red Planet in particular.
Last year, Nasa asked Sir Peter Beck’s firm to pitch ideas for retrieving Mars rock samples (already retrieved by a rover) to Earth. Rocket Lab said it could do it as soon as 2031, for around US$4 billion ($7b) – a lot cheaper than other options – but the US space agency had been dragging its feet on a decision (leading to a slightly cheeky Rocket Lab post on X) and it was not clear if Congress would bankroll it. Now the landscape’s looking a lot more Mars-friendly.
We can wait another year, or we can get started now.
— Rocket Lab (@RocketLab) January 8, 2025
Our Mars Sample Return architecture will put Martian samples in the hands of scientists faster and more affordably. Less than $4 billion, with samples returned as early as 2031.
This is not our first encounter with the Red… pic.twitter.com/rHIrwn99ry
2. AI regulations rescinded
Trump fulfilled his promise to rescind former President Joe Biden’s 2023 executive order on artificial intelligence (AI) safety. The Biden order set safety standards for the use of artificial intelligence across the federal Government. Trump’s executive order left a vacuum on federal AI regulations, according to a New York Times report.
This move is not as radical as it might seem, given Biden never used his AI safety order hand-brake to slow the release of any new artificial intelligence product, or force transparency.
Ironically, AI is perhaps the only area where Musk is pro-regulation. In a 2023 interview with Tucker Carlson, Musk said: “It’s never fun to be regulated [but] a regulatory agency needs to start with a group that initially seeks insight into AI, then solicits opinion from industry, and then has proposed rule-making.
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“AI is more dangerous than, say, mismanaged aircraft design or production maintenance or bad car production, in the sense that it is, it has the potential – however small one may regard that probability but it is non-trivial – it has the potential of civilisation destruction,” Musk added.
Cynics have seen Musk being in favour of an AI pause because his own firm, xAI, trails OpenAI and others, even if they see validity in his arguments about risk.
Regardless, there’s been a counterpoint at Davos, where according to DealBook, a lot of the chatter has been around “DeepSeek” – a Chinese AI that’s said to be just as powerful as ChatGPT but requires far less computing power. The question is: How much is DeepSeek being hyped in order to ease the shackles on US-based AI makers?
3. The US$500 billion Stargate
On Tuesday, Trump stood alongside tech executives from ChatGPT maker Open AI, Oracle and Softbank, to unveil what he called a “tremendous” and “monumental” intelligence infrastructure project.
The joint venture, known as Stargate, will build data centres for OpenAI, with the involved companies immediately committing US$100b and planning to invest up to US$500b over the next four years.
There’s no Federal funding for Stargate - and the most downbeat take would be that Oracle is simply continuing to build a really big data centre in Texas that it began constructing under Biden. But Trump is helping to snip red tape out of the way. The President’s pubic support is seen as making it easier for the project’s backers to raise money.
But hours later, Trump confidant Musk cast doubt on the initiative in late-night posts to X.
“They don’t actually have the money,” Musk wrote replying to a post from OpenAI. Shortly after he added: “SoftBank has well under US$10b secured. I have that on good authority.”
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Altman then replied: “Wrong, as you surely know.”
Musk posted a picture of a crack pipe as a response.
Altman and Musk were the founding co-chairman of OpenAI in 2015, but fell out after Musk – who now has his own AI firm – wanted it to remain a non-profit foundation.
Trump’s staff were said to be furious about Musk undermining the Stargate announcement, but the President himself seemed unconcerned.
It’s possible Musk could have a few more choice words about the venture, however.
The Financial Times – citing insiders – reported that Stargate will exclusively serve Altman’s Open AI.
4. Supporting H1-B visas
Many in the Maga crowd – including Trump’s key first-term adviser Steve Bannon – pushed for a blanket crackdown on immigration.
Musk pushed hard for an exemption for those crossing the US border on an H1-B speciality occupation visa, posting to X: “There is a dire shortage of extremely talented and motivated engineers in America.”
Trump backed Musk (a South African immigrant once on an H1-B visa himself).
Bannon vowed to have Musk removed by inauguration day. That didn’t happen, leaving Bannon and his still sizeable following fuming, along with other Maga influencers like Laura Loomer. But for the tech industry, and others with talent shortages in specialised areas, it was a sensible, pragmatic outcome.
5. Challenging a move against Big Tech and profit-shifting
Trump also signed an executive order challenging an international agreement the Biden administration had negotiated with countries including New Zealand – to try to stop large multinational corporations from booking profits in countries with low taxes.
While the move against the “Pillar Two” push will wind up critics of Big Tech, little had been done to enforce the decade in the making OECD-initiated and Biden-supported measure for a global minimum corporate tax of 15%.
Tax experts earlier told the Herald there would be nothing in the measure for New Zealand in any case, given underpayers would pay a “top-up” tax in their home country – that is, the US for most Big Tech firms.
And in any case, the likes of Facebook, Microsoft and Google already pay the full 28% company tax rate on New Zealand revenue (even if that is calculated as net of inhouse payments to their corporate parents in the US – or subsidiaries in Ireland – that limit their New Zealand tax exposure).
6. End of EV subsidies - maybe
Trump signed an executive order to “eliminate the electric vehicle [EV] mandate and promote true consumer choice ... by terminating ... state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering [my italics] the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favour EVs”.
AP reported that there is nothing termed an “EV mandate” among Biden’s measures, leading to confusion over the next steps.
The news agency said the executive order indicated Trump was “likely to seek to repeal a $7500 tax credit for new EV purchases approved by Congress as part of Biden’s landmark 2022 climate law, as well as roll back Biden-era Environmental Protection Agency rules to tighten limits on greenhouse gas emissions and other pollution from passenger and commercial vehicles.”
Tesla shares fell after the executive order was signed, giving up some of their recent huge gains.
Pundits say Trump confidant Elon Musk is betting that while the end of subsidies will hurt his firm’s profits, the measure would hit traditional car makers harder, undermining their efforts to transition to hybrids and electric vehicles.
7. Maintaining and boosting tariffs
NZX-listed Fisher & Paykel Healthcare – which has manufacturing facilities in Mexico and China – saw its shares take a wobble last week. The US is the second-largest market for our high-tech exports, according to the annual TIN (Technology Investment Network) report, so all of our tech firms will be watching closely as Trump implements his protectionist strategy.
Tariffs have already become entrenched in America’s economy. The Biden administration maintained many of Trump’s first-term trade barriers – and in fact, in May last year raised the tariff on BYD electric cars from 25% to an eye-watering 100% – effectively taking the China-made EVs off the table for American consumers, but ensuring lots of cheap supply for Kiwi buyers.
8. Infratil’s Longroad Energy faces end of the road for tax credits
As expected, Trump pulled the US out of the Paris Agreement and signed an executive order targeting the Energy and Infrastructure Provisions of the Inflation Reduction Act (or “IRA”). of 2022.
The IRA – Biden’s biggest achievement, in dollar terms – gained bipartisan support and provided US$369b for green infrastructure projects in the form of tax credits.
Boston-based solar farm operator Longroad Energy, part-owned by NZ’s Intratil and described as one of its “four key assets” has been a beneficiary.
US$104b in IRA funds had yet to be dispersed as Trump took office. His executive order called for an immediate pause in further disbursements.
But the legality of pausing funds already allocated by Congress has been questioned.
And after ordering a pause on IRA disbursements last Monday, Trump muddied the waters two days later by saying the pause would only apply to some projects; those that “discourage fossil fuel development or boost electric vehicles”.
Some also see political complications.
In November, for example, the Department of Energy said it would loan electric car maker Rivial US$5.98b in federal funds to build a new plant in Georgia that would create 7500 jobs.
Republicans there – and in other swing states – might say “yes in my backyard”.
Entrepreneur Vivek Ramaswamy – who was going to run the new Department of Government Efficiency (DOGE) in tandem with Musk, wanted to claw back the Rivian loan, but quit the initiative last week before he could see that goal through (the gossip was that he had fallen out with Musk; Ramaswamy said he wanted to run for Governor of Ohio).
“It’s extremely rare for retrospective changes or repeals of tax credits,” Infratil said in a March 2024 investor presentation.
Infratil said in a September investor presentation – its most recent NZX filing on the issue – that Longroad had a “modest” 2 gigawatts (GW) of projects exposed to potential federal policy changes across FY25 and FY26.
“FY25 projects (0.7GW) and 0.5GW of FY26 projects already safe harboured, so tax credits should be unaffected,” Infratil said.
But whether the remaining $104b in IRA rebates is disbursed, or not, it’s the end of the road for clean energy incentives beyond that – at least during Trump’s term.
9. Boosting cryptocurrency
As promised to the industry, Trump signed an order to promote cryptocurrency.
But many details were fuzzy as it floated the idea of a crypto stockpile, and broadly outled a less interventionist approach by government agencies.
American leadership in crypto would be fostered by “protecting and promoting the ability of individual citizens and private-sector entities alike to access and use for lawful purposes open public blockchain networks without persecution,” the order said.
Most of the measures were classed as “potential” and subject to a working group refining their details and viability. Most expect ex-David Sacks – a South African-born venture capitalist who was involved in PayPal along with Elon Musk during its early days, as his “crypto and AI czar” is expected to be part of the Working Group. He’ll be joined by 10 others, including the Attorney General, Treasury, Commerce and Homeland Security secretaries (the equivalent of cabinet ministers in NZ), with recommendations due in 180 days.
“The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts,” the order says.
It’s also notable for supporting the stablecoin concept. A stablecoin is often defined as a cryptocurrency pegged to a fiat currency, such as the US dollar.
The order said Trump’s administration would set about “promoting and protecting the sovereignty of the United States dollar, including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide”.
Other elements of the order included “protecting and promoting fair and open access to banking services for all law-abiding individual citizens and private-sector entities alike” (many crypto exchanges in the US – and NZ – have complained that banks have blocked them from holding traditional accounts and other banking services). Again, it’s not clear how this directive will manifest itself.
The executive order would also have pleased private crypto players with its statement that the US would be “taking measures to protect Americans from the risks of Central Bank Digital Currencies (CBDCs), which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the United States.”
NZ’s Reserve Bank has been exploring the concept of a CBDC, with possible implementation around 2030.
According to the Wall Street Journal, some in the crypto industry had hoped Trump would bring it legitimacy but feared he had undermined its credibility by releasing his own “meme coin”. His wife Melania also released a memecoin.
Unlike bitcoin – whose value is underpinned by digital mining – or a stablecoin tied to an asset, a meme coin’s value has no technical or economic basis; it’s tied purely to the popularity of an internet meme. Conflict-of-interest concerns have also been raised.
10. A tech advisory council!
Lastly, Trump’s tech moves included creating the Council of Advisors on Technology – which can’t be classed as a revolutionary move.
Trump established a high-powered tech council during his first term, but it went nowhere in the grand tradition of such councils and advisory groups (our last Government had two corkers – a Startup Advisors Council whose recommendations were roundly ignored by the previous and current cabinets – and a Digital Council that was only good for comedy value).
Members have yet to be named – but you already know Trump and Musk’s degree of willingness to accept dissenting voices.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
