The proposed U.S. protection finances for 2025 is $1 trillion — equal to Spain’s GDP. The primary firms to bid for (and win) public protection contracts have been Palantir and Anduril, Silicon Valley tech corporations whose names have echoes of The Lord of the Rings. When fighter jets patrol Washington’s airspace following Trump-ordered strikes on Iran’s nuclear services, it’s a well timed reminder that wars right now are extra high-tech than ever.
The U.S. tech sector has at all times been deeply intertwined with protection. In the course of the marketing campaign, Trump sowed doubts about whether or not this custom would proceed, given his anti-war rhetoric and his criticisms of each Bush and Obama over the Iraq and Afghanistan wars. The U.S. withdrawal from Afghanistan — dealt with by Biden — was as ignominious because it was poorly managed. Far worse than the autumn of Saigon in 1975, regardless of Biden’s guarantees on the contrary.
Leon Panetta, Obama’s Secretary of Protection, defended Trump’s resolution to assault Iran in an interview on CNN with Wolf Blitzer: “The U.S. didn’t have any various.” The tech sector doesn’t see issues in black and white; it seems to be for alternative within the grey space, the pure habitat of Silicon Valley since Trump turned president.
The heads of main tech firms attended Trump’s inauguration, hoping to reap the advantages of a better relationship with a president they’d rejected in 2016 and 2020. Not in 2024–25, although, with Elon Musk (Tesla, Neuralink, X, xAI, SpaceX) a number one determine in Trump’s cupboard. Mark Zuckerberg (Meta) declared himself extra Trumpist than Trump. And Jeff Bezos (Amazon), Sundar Pichai (Alphabet), Satya Nadella (Microsoft), Tim Prepare dinner (Apple), Jensen Huang (Nvidia), Lisa Su (AMD), and lots of others accompanied Trump on his journey to the Center East (UAE, Saudi Arabia, Qatar), the place they signed $200 billion price of AI contracts — information facilities, infrastructure, and chips.
On January 23, Stargate Enterprise introduced its first information heart in Texas — a partnership between Oracle (Larry Ellison), SoftBank (Masayoshi Son), and OpenAI (Sam Altman). The day after Trump’s inauguration, they pledged — together with Nividia, Apple and different corporations — to speculate half a trillion {dollars} in AI infrastructure.
These promised investments allowed Trump to boast concerning the MAGA victory and the return of producing to the U.S. Then got here Trump’s first bomb: tariffs, in April. The second bomb got here within the early hours of Sunday, June 22: 16 strikes on three Iranian nuclear websites (Natanz, Fordow, and Isfahan). The tech sector weathered the primary effectively and is pretty optimistic concerning the second.
By the tip of the primary half of the 12 months, U.S. tech firms reported stellar earnings: 90% of the S&P 500 and Nasdaq corporations elevated income by a mean of 13%. The Magnificent 7 fared even higher: Microsoft, Amazon, Alphabet (Google), Nvidia, Meta, and Apple all broke data. Tesla, nevertheless — whereas Elon Musk was lacking in motion, slicing prices in authorities contracts — skilled the worst half-year in its historical past. The top of EV subsidies was the final straw within the Trump–Musk relationship. The 2 have gone from allies of comfort to transient enemies, and at the moment are estranged. Musk is returning to concentrate on his companies.
Regardless of tariffs, uncertainty, and Trump’s coverage flip-flops, Microsoft, Amazon, and Alphabet posted main beneficial properties, pushed by two income streams: cloud computing (Azure, AWS, Google Cloud) and their legacy companies — software program, retail e-commerce, and internet marketing. Equally, Meta and Google-YouTube benefited from promoting on social platforms, and Apple from iPhone gross sales. Market perceptions diverged not as a result of analyst expectations weren’t met — they have been exceeded — however due to various future outlooks.
Microsoft, Alphabet, and Meta raised their forecasts for the 12 months and introduced additional AI infrastructure investments: on common, every agency will make investments $75 billion this 12 months. Their shares rose. In distinction, Andy Jassy (Amazon) and Tim Prepare dinner (Apple) hesitated to make forecasts, citing the standard components: “uncertainty, volatility, provide chains, tariffs, China,” and so on. Regardless of sturdy Q1 and Q2 outcomes, this lack of ahead steering weighed on their inventory efficiency. Nvidia, the final to report, posted dazzling outcomes and such bullish forecasts that it lifted the whole tech sector.
Trump has opened the Pentagon’s purse to Silicon Valley. Cisco and Salesforce have secured profitable authorities contracts. Biden’s AI restrictions have been lifted, and cryptocurrencies, NFTs, and different speculative ventures — overtly benefiting the president’s household — now face no regulatory obstacles.
Secretary of State Marco Rubio has not hidden his discontent with the Iran strike, which leaves no room for diplomacy. Secretary of Protection Pete Hegseth doesn’t suppose too laborious — he simply repeats the president’s speaking factors. Vice President J.D. Vance, previously of Palantir, merely smiles — maybe recalling the phrases of movie director and Vietnam vet Oliver Stone: “Wars might be very worthwhile for sure firms.”
Jorge Díaz-Cardiel is managing associate at Recommendation Strategic Consultants and creator of Hillary vs Trump
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