by Francesco Cirillo - USA Team

With Donald Trump's victory, the US Big Tech, with the second Trump administration, could significantly influence and consolidate the strong interconnection between the federal government and American technology companies.

In recent years, the relationship between the military industrial complex and the US tech companies (Amazon, Microsoft and Google in the lead) has strengthened, especially on technology renewal issues coming from the Pentagon in the political-military sphere. This connects the relationship between Silicon Valley and the military-industrial complex in national security matters.

In the context of the future Trump administration, which will take office on 20 January 2025, the latter could grant Big Tech ample room to manoeuvres in exchange for support in national security matters.

The strong concern is the partnership that could emerge in a public-private collaboration. According to a recent 2024 paper by Costs of War/Brown University's WATSON INSTITUTE FOR INTERNATIONAL AND PUBLIC AFFAIRS, entitled ‘How Big Tech and Silicon Valley are Transforming the Military-Industrial Complex’, the link between the Department of Defence and the tech company sector is gradually influencing and directing the Pentagon's investments and the Defence Budget ($886 billion for the year 2024). In the current context, the role of Tech companies such as Amazon, Google, and Microsoft is increasing dramatically, competing with traditional US defense contractors such as Lockheed Martin. 

Besides the classic Big Tech companies, other companies such as Palantir Technologies also carve out important spaces for themselves. Founded in 2003 by Peter Thiel and Alex Karp to develop software for analyzing large amounts of data, this company is one of the best known cases of start-ups backed by military and intelligence funds that have become key players in providing services and technologies to the Department of Defence (DoD) and other federal agencies.

During its early stages, Palantir received around $2 million in funding from In-Q-Tel, the CIA's venture capital fund, which enabled the start-up to grow rapidly and acquire contracts with various government agencies. This helped Palantir to be able to grow, giving it important resources to be able to strengthen its relationships with major government agencies.

For several insiders, Palantir's role, linked to its potential, would grant it the cards to transform itself into a figure similar to Raytheon or Lockheed Martin, historically dominant companies in the defense sector. Indeed, it is theorized that Palantir and other technology companies, such as Microsoft and Amazon, may soon get to acquire traditional defence contractors, blurring the distinction between the technology industry and the US defence sector. 

The role of tech companies has started to strengthen since the outbreak of the war in Ukraine of growing tensions with China. Linked to these geopolitical tensions, several start-ups operating in the tech sector are receiving significant investments. Among these is Anduril, a company operating in the production of military systems and drones with a focus on AI integration, which recently completed a $1.5 billion funding round, bringing its valuation to $14 billion.

As a matter of fact, the role of Big Tech in the coming years could be consolidated also in view of the geopolitical competition with Beijing.