From the White House to Silicon Valley: a new balance

With the US government on the verge of financial collapse, President Cleveland needed a solution, and John Pierpont Morgan had one. A crisis of confidence in the dollar had triggered a run on the government’s gold reserves (at the time, the value of circulating money was guaranteed by an equivalent amount of precious metal).

In 1895, after two years of crisis, the US government’s vaults were nearly empty. To avoid a disastrous default and strike a good deal, New York’s wealthiest banker assembled a coalition of rich entrepreneurs and financiers capable of replenishing the Treasury’s coffers by selling more than 60 million dollars in gold. Not only that, he found a legal strategy that allowed the President to personally sign the agreement, bypassing the deadlock that had formed in Congress.

With this goal in mind, Morgan traveled to Washington and settled into a hotel room just a few hundred meters from the White House. Despite the imminent risk of bankruptcy, Cleveland did everything possible to avoid a meeting. Being publicly associated with a financier was a political price he did not want to pay. Morgan waited patiently in his hotel. Only when gold reserves fell below 10 million dollars did the President receive him and sign the agreement that would save the global financial system.

Political and economic power have always had a privileged relationship, but at least in recent history, they have been reluctant to show it. Such a meeting usually occurs in some obscure corner backstage, like two clandestine lovers. Despite Cleveland’s caution, historians have well documented that during the Gilded Age—an era that, like the current one, saw inequality rise and wealth concentrate in the hands of pioneers of new industries—more or less shadowy plots between political and economic power were quite common. The privileged access of rubber barons to the corridors of power became an image so firmly embedded in the public imagination that the names of those powerful families still spark the imagination of conspiracy theorists who fill the internet with their bizarre ideas.

Far rarer are cases in which politics not only does not want to hide privileged relationships with economic power but actually demands a symbolic tribute from it. This usually occurs when rising economic and political regimes need to legitimize each other, forging alliances that can bring lasting benefits. Once William the Conqueror had consolidated his power in England, he summoned all the landowners of the realm to Salisbury to demand a public declaration of loyalty. The descendants of William the Conqueror still sit on the throne of England, just as some of the families that went to pledge their allegiance remain part of the United Kingdom’s aristocracy.

Precisely because this type of ceremony is unusual, the group photo showing all the Silicon Valley mega-company leaders in the front row at Trump’s inauguration caused a global stir. It is neither a case of economic power submitting to political power nor of political power submitting to economic power, but rather a depiction of how much these institutions need each other, as their destiny is inextricably linked to US national interest.

Silicon Valley and Trump: convergence of interests

Adopting this perspective, Silicon Valley’s repositioning toward Trump’s political project becomes more understandable. Of course, political and cultural issues matter, but the real driving forces are primarily strategic and business considerations. Over the past four years, Democratic policies have progressively distanced the White House from the interests of the big companies dominating the global tech market. This political decision is exemplified by the administration’s stance on antitrust, which contributed to the significant decline in merger and acquisition activities during Biden’s four-year term.

Trump aims to create a different relationship between government and big corporations, one based on deregulation and promises of tax relief. Silicon Valley’s major companies are central to his vision of the national interest. Trump wants to cement the position of the United States as the global center for the development of new technologies, and to achieve this, he is ready to support, in every way, the companies capable of aiding him in this goal.

Mark Zuckerberg has recently spoken of an “American standard” for artificial intelligence, which in other words means positioning US-made technologies at the core of the global economic system being built around this innovation. To achieve this goal, the White House is working alongside tech companies, even using diplomatic resources to persuade allied countries to open their borders to US technologies, in exchange for more favourable trade terms.

A sea of investments

What Trump expects from companies is that they continue to invest in the United States to build the best technologies. The “Stargate” project, worth 500 billion dollars from OpenAI, announced by Trump, is a prime example. These substantial data center expenditures will serve to develop the next generation of AI and should be considered strategic infrastructure investments that cannot happen without favorable regulations or government support (think of the immense energy costs and antitrust issues).

In recent weeks, there have been a series of announcements of major investment plans from big tech companies. BlackRock and Microsoft are preparing to launch a 30-billion-dollar artificial intelligence investment fund to build data centers and energy projects to meet the tech sector’s growing demand. Mark Zuckerberg has stated that this year the company will spend between 60 and 65 billion dollars on capital infrastructure, while also expanding its AI teams. Google has also announced an increase in planned investment spending.

According to Bloomberg Intelligence, Amazon, Microsoft, Alphabet, Meta Platforms, Apple, and Oracle spent a combined total of 110.2 billion dollars on capital expenditures (capex) last year. In 2025, they could invest about 165.2 billion dollars in capex, which would represent a significant increase of nearly 50% compared to 2023 levels. Of course, a rise in spending can pose a risk to profits if these investments fail to yield the expected results. However, we believe that these large tech companies have much to gain by entering rapidly expanding sectors, where, moreover, significant public investment can also be directed.

Close ties with the Pentagon

One such sector is defense and security. The collaboration between Silicon Valley and the Pentagon is fuelled by growing geopolitical tensions and the importance of technologies like AI for military applications. At the end of last year, Amazon, Anthropic, and Palantir launched a partnership to develop AI solutions for defense and intelligence services. And last September, for the first time, the tech accelerator Y Combinator funded a weapons-manufacturing company.

Venture capital investments in defense technology reached 100 billion dollars between 2021 and 2023, nearly 40% more than in the previous seven years. Between 2018 and 2022, direct Pentagon contracts with Big Tech exceeded 50 billion dollars.

Project 2025, regarded by many as the main reference point for the new White House’s policies, supports reducing bureaucracy concerning military spending. The idea that U.S. hegemony is founded on maintaining technological supremacy over its adversaries has always been a part of American strategic thinking, but we can likely expect the collaboration between the Pentagon and Silicon Valley to intensify in the coming years. For industries that seize this opportunity, there could be a significant chance to generate profits from both national and international contracts, bearing in mind that the White House is pressuring NATO allies to increase military spending.

The role of government: deregulation and a “business-friendly” approach

In exchange for investments and technology, Trump offers deregulation. The new administration’s first moves in this area have arrived quickly. Trump has ordered agencies to eliminate ten existing regulations for every new regulation issued. The White House has also restored earlier versions of the guidelines for reviewing regulations, deemed less restrictive.

Trump has pledged to remove barriers to AI development introduced by the Biden administration, as well as antitrust legislation.

The new administration’s energy policies, which focus on returning to hydrocarbons, will also make the infrastructure investments that tech companies are undertaking less expensive and more scalable.

The new administration has removed every mediation with the business world, to the point that the legislative and economic development agenda is being written hand-in-hand with Silicon Valley leaders who share a techno-optimistic worldview, such as Elon Musk, Eric Anderessen, and David Sacks, all of whom hold prominent roles within the administration.

The information issue

Another key area of collaboration between Trump and Silicon Valley is information. Platform moderation is obviously one of the first issues to have been addressed, but the more interesting battle centers on TikTok. The most recent news is that the government is considering creating a sovereign wealth fund whose resources might be used to nationalize the Chinese-founded social network that operates in the United States under a waiver granted by Trump himself. Such a move would be a major step, placing one of the main sources of personal data—and one of the fastest-growing media outlets—under public spending control.

A new era

With Trump’s second term, it seems we have entered a new era in which American political power and tech companies may openly collaborate on a shared commercial and political project. Setting aside ethical and political considerations here, it is clear that this could open up huge opportunities for the entire American industrial and tech sector, areas that make up a large part of global equity portfolios.

For investors, this represents a very important market opportunity that strengthens the long-term outlook for investments. From a risk standpoint, the substantial investments deployed to develop these frontier technologies could pose a threat to profitability; the recent turbulence surrounding the DeepSeek case exemplifies how these risks might materialize. While we remain optimistic about the contribution the US tech sector can offer to portfolios, we continue to believe that maintaining a broad, diversified equity exposure is the best way to benefit from this extremely dynamic economic period.

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