Tech Bros Are Facing The End Of The ‘Technipolar Moment’

For intellectuals of a certain bent, no game is more absorbing than discovering the “real” power behind the throne. Who is pulling the strings? What class interests does the regime serve? Who is “really” in charge? Such questions inspire learned disquisitions as well as conspiracy theories.

So far, the favorite target when it comes to the Trump administration is the tech industry. Ian Bremmer, the head of the Eurasia Group, a political consultancy, talks about the “technipolar moment” and the “frightening fusion of tech power and state power.” Steve Bannon, Trump’s former adviser, laments the influence of “technofuedal globalists bent on turning Americans into digital serfs.” The opening session of an Aspen Institute Italia conference on the future of capitalism in Milan on May 16 (at which I spoke) addressed the subject of “Techno Capitalism: America’s New Gilded Age.”

The appeal of this argument is easy to see. The US tech industry exercises an extraordinary influence over the US economy: The “magnificent seven” account for roughly one-third of the value of the S&P 500. Tech bros contributed generously to both Trump’s re-election campaign and his inauguration ceremony. Elon Musk earned the reputation of “co-president” as he strolled around the Oval Office with his son on his shoulders.

But the closer we look at the “technipolar moment,” the more it turns into a mirage. Arguably, the most striking thing about the American tech industry, given its extraordinary economic dominance, is its relative lack of political influence.

It looks as if Musk has been expelled from Trump’s inner circle despite spending almost $300 million to help re-elect him. His spell in the sun was both brief and unsuccessful. DOGE (the Department of Government Efficiency) was sound and fury signifying very little. Musk’s promise to cut $2 trillion in government spending has shrunk to $150 billion and will probably shrink still further. This is not just because the courts have largely stymied Musk’s firing blitz but also because the entire project was misconceived: As Musk himself acknowledged, the only way to save serious money is to reform entitlements, which takes years of careful coalition-building. Musk failed to get Trump to rescind his tariffs despite denouncing Trump’s leading trade advisor, Peter Navarro, as “truly a moron” and “dumber than a sack of bricks.” Musk’s sojourn in democratic politics has so far cost him roughly a quarter of his net worth, as Tesla stocks have plummeted and the Tesla-owning classes have turned against him. Little wonder that he himself also just signaled his intention to retrench and retreat.

Musk’s failure over tariffs is a sign of the tech industry’s wider failure to set the economic agenda. A Bernie Sanders’ presidency could not have done more to damage the pillars of the tech industry. Trump’s addiction to tariffs is naturally bad for an industry that depends on global sourcing. Amazon briefly considered listing the cost of tariffs in price breakdowns on items it sold before Trump called CEO Jeff Bezos in a fury. But just as bad is Trump’s addiction to changing tariffs, which has made it impossible to plan ahead. Trump’s anti-immigration policies are making it harder to hire the skilled foreign workers that the tech companies rely on; indeed, recent figures suggest that the US is no longer a net importer of top AI talent.

Trump’s war on the universities, which includes withholding future grants, canceling existing ones and changing the funding formula for research bodies, threatens America’s thriving innovation system. American visitors to the Aspen conference talked of research grants being frozen, departments being cut, visiting professorships being abandoned and star academics hunting for jobs in Europe. The war could well intensify. Trump’s proposed 2026 budget would cut funding for the National Institutes of Health by about 40% and for the National Science Foundation by 57%; moreover, his proposals to tax university endowment income at 14% or 21%, or take away their tax-exempt status, would hamper attempts to use university funds to plug the gap.

The Trump presidency owes far more to populism than to tech power. Trumpian populists might cheer Musk when he talks about feeding bits of the government into the “woodchipper,” but they have not forgotten that, until only the other day, many tech bros were social liberals who donated heavily to the Democratic Party and exported American jobs abroad. Vice president JD Vance denounces Apple Inc. and Google as latter-day versions of the parasitic East India Company. Bannon goes further in his fire-and-brimstone podcast.

The tech industry had assumed that Trump’s election would mean the unwinding of Joe Biden’s anti-trust machinery. Far from it: The Federal Trade Commission is continuing its case against Meta for snuffing out nascent competition when it purchased Instagram and WhatsApp, and the Justice Department is determined to force Google to sell its Chrome web browser. Both cases were filed during Trump’s first term and carried over during Biden’s term in a sign of a growing anti-tech consensus.

To the extent that Trump has any economic policy, it is restoring manufacturing rather than boosting tech. He wants to bring manufacturing back to the US partly because it supports the sort of blue-collar workers who he thinks made America great and partly because America needs to make more things if it is to face down its Chinese rival. In general, tech executives opened their wallets to Trump not because they shared his vision of America, but because they realized that the Democrats were shuffling to defeat behind Biden and because they were terrified that Trump would turn on them.

To the extent that Trump has a “class base,” in the old Marxist phraseology, it is in family businesses rather than the tech goliaths on the West Coast. Trump’s natural milieu is with his fellow family businesspeople who inherited their companies, who work in real estate and the extractive industries, who loathe the box-ticking culture of the corporate world, and who relish flashing their wealth in places like Mar-a-Lago. These people are very different from the high-IQ nerds building the virtual world (though they are not averse to making easy money from “crypto”).

But even Trump’s identification with his fellow family business owners is limited. The most important thing to grasp about Trump is that he doesn’t represent anybody’s interests but his own. Indeed, the worrying thing about his presidency is not that sinister business forces are pulling the strings from behind the scenes. It is that the businessman who is pulling the strings (and grabbing the spoils) is Trump himself.

Source: Bloomberg Europe