Some of the U.S.’s most prominent tech companies may be about to face a new challenge, one that they likely didn’t see coming.
When President Donald Trump defeated Kamala Harris in the 2024 U.S. presidential election, many tech stocks surged. His history of favoring policies that eased regulation on big business made his victory a highly bullish indicator for many high-growth companies.
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For many tech companies, though, Trump’s win seemed particularly promising. The rise of artificial intelligence (AI) had formed a cornerstone of his campaign, and the new president had made it clear he believed in easing regulation for the industry in the name of spurring on U.S. AI dominance.
According to recent reports, though, momentum is building for regulatory action that could compromise something from which big tech companies have benefited over the past few months.
In recent years, many tech companies have benefited from lucrative contracts doled out by the U.S. Department of Defense (DOD). As the AI revolution has transformed entire industries, demand for new military and defense technology from the public sector has grown, helping benefit some of the industry’s top players.
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Companies such as Microsoft, Amazon, and Google have been among the top beneficiaries of this trend, as has newcomer Palantir (PLTR) . The software company, founded by Peter Thiel, a billionaire investor with ties to Elon Musk, recently made headlines when it received a $30 million contract for an immigration tracking system.
This has prompted speculation that these big tech firms have a hold on deals from the Pentagon. However, two U.S. senators are working to revive a former bill that would substantially loosen any hold, which is scheduled to be reintroduced in the coming week.
Titled the Protecting AI and Cloud Competition in Defense Act, the bill is being sponsored by the bipartisan partners Sen. Elizabeth Warren, D-Mass., and Sen. Eric Schmitt, R-Mo. According to reports, it isn’t the only one of its kind: a companion bill is expected to be unveiled in the House as well.
Senator Warren is a known critic of big tech, specifically its massive monopoly power, which she has advocated breaking up. This stance formed a cornerstone of her policy proposals during her 2020 presidential campaign. Now she seems intent on continuing this crusade.
“The AI and cloud computing industry is highly concentrated, with a few dominant companies controlling critical market components like cloud infrastructure, foundation models, and data,” notes a statement released by her office. “As the Department of Defense (DOD) expands its use of these technologies, it is important that DOD encourages innovation through competition.”
