Hello, and welcome to TechScape. It’s been a busy week in tech news: Donald Trump’s tariffs led to an enormous sell-off of tech stocks; Elon Musk and Trump are playing will they, won’t they with the billionaire’s departure from the White House; and TikTok has been temporarily rescued from a ban, yet again.
Tech backs Trump, loses out with Trump’s tariffs
The US stock market has lost more value in the days since Trump announced sweeping tariffs than all US equities were worth in total in 1990. Tech stocks, the most valuable on the US exchange, have suffered serious losses. Apple and Nvidia, two of the five most valuable companies in the world, saw their share prices drop by double digits. Valuable startups Klarna and StubHub have postponed their anticipated initial public offerings because of the market turbulence that followed the tariff announcement. In marginally but personally devastating news, Nintendo Switch 2 pre-orders were also delayed.
With a globalized supply chain that touches dozens of countries, Apple is a big loser here, and serves as an emblem for the effect of the tariffs on most consumer electronics companies. Listing the nations where the iPhone’s components originate from creates a Venn diagram sporting a significant intersection with the countries Trump has penalized. Nvidia, the maker of one of the most highly specialized goods on the planet, is also suffering. There are only a handful of companies that can complete each step of the semiconductor manufacturing process, and the majority of them are not located in the US. Both companies rely on Asia, particularly China, for manufacturing, where Trump has imposed steep trade barriers. Apple has been moving some iPhone production to India in recent years, but the process hasn’t been fast enough to avoid the impact from the tariffs. The semiconductor industry will enjoy a carveout from some of the White House’s tariffs, but analysts predict that exception won’t be enough to keep costs stable or to foster the US semiconductor boom Trump desires. AI, an industry the US has heretofore led in, might become a lot more expensive because of the roadblocks erected to chip imports and production.
Like Apple and Nvidia, Tesla has seen its stock sink by double digits. Musk’s carmaker relies on China for sales and manufacturing, and his buy-one-get-one-free event on the White House lawn doesn’t seem like it will save him from the worst of Trump’s economic retaliation. Musk broke with Trump over the weekend and said he hoped for a “zero-tariff” agreement between the US and the European Union. In response, the outgoing German economy minister said Trump’s economic models were “ridiculous” and Musk’s remarks were “a sign of weakness”. We can’t attribute Tesla’s stock slump to tariffs alone, though. First and foremost: it was already in decline before Trump’s announcements. No one is in the streets protesting against Tim Cook.
Tech bet big on Trump. Its foremost delegates, the richest men in the world, sat with him and his family during his inauguration. We have yet to see how the industry – led by Tim Cook in this scenario, I predict – may try to persuade Trump to grant exemptions from the tariffs so as to keep the prices of iPhones stable. Cook is a more subtle statesman than Mark Zuckerberg. He personally gave $1m to Trump’s inauguration but didn’t appear on the dais beside the president during the ceremony. Apple has wriggled out of tight spots with Trump before, and it would seem to be in Trump’s best interest not to cause the price of America’s favorite phone to rocket.
Trump teases Musk’s exit from the White House
In Wisconsin and on the stock market, Musk suffered dual losses last week. Then Donald Trump and JD Vance said the billionaire would exit the White House. When? Who can say.
The remarks came after two serious blows to Musk. On Wednesday, Tesla reported extremely weak delivery numbers for the first quarter of 2025. The same day, the liberal candidate in a special election to the Wisconsin supreme court won. Musk had backed the conservative candidate with $20m and multiple appearances in a cheesehead.
Though this is a low point for Musk in both politics and business, it is not the end of his alliance with Trump.
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My colleague Nick Robins-Early reports:
After months of exerting extraordinary power over the US government and becoming a mascot for Trump’s new administration, the first signs that may shift away from his prominent role in the White House began to appear this week.
Both Trump and JD Vance have stated in interviews over the past few days that Musk would eventually leave the administration and the “department of government efficiency” (Doge) that he founded, their most direct statements yet on his tenure. Politico also reported on Wednesday that Trump had told members of his inner circle that the Tesla CEO would be departing in the coming weeks, though Musk called the article “fake news”. Musk is a “special government employee”, a designation that technically carries a 130-day term that, depending on how the administration chooses to log those days, could run out at the end of May. Vance made sure to say that Musk would remain a close “friend and adviser” to the administration even after leaving, further muddying the waters on how to mark Musk’s potential departure.
The question of exactly when Musk may leave the White House, however, is less consequential than the circumstances of his exit. Rather than an explosive split that many commentators predicted, Trump has repeatedly defended Musk, and there has been little public indication from either man of anything acrimonious. Politico reported that Trump has been pleased with Musk’s performance even as the president forecasts the billionaire leaving. Musk instead appears set to keep his close ties with the president and retain the wealth, influence and intent to shape the country’s politics.
Trump pauses the TikTok ban again
On Friday, Trump signed an executive order to keep TikTok online for another two and a half months.
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My colleague Dara Kerr reports:
This is the second time the president will have delayed the ban or sale of the social media app, and will punt the deadline to 75 days from now.
The TikTok deal “requires more work to ensure all necessary approvals are signed”, Trump announced on his Truth Social platform on Friday.
ByteDance, TikTok’s parent company, issued a statement in response to the executive order: “ByteDance has been in discussion with the US government regarding a potential solution for TikTok US. An agreement has not been executed. There are key matters to be resolved. Any agreement will be subject to approval under Chinese law.”
China put a possible deal on hold this week after Trump announced his sweeping tariffs, according to Reuters.
Silicon Valley billionaires’ influence on US national security has never been bigger
Longtime government officials and entrenched defense and intelligence contractors have long controlled spy operations. Now, however, the likes of Musk, Jeff Bezos and Anduril founder Palmer Luckey have extraordinary influence on national security operations, thanks to close personal relationships with Trump.
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James Risen reports for the Guardian:
The emergence of Musk, Bezos and a handful of other pro-Trump billionaires as key players in US intelligence marks a radical change in US spy operations, which have traditionally been controlled by career government officials working closely with a few longstanding defense and intelligence contractors, giant corporations such as Lockheed Martin, RTX and Northrop Grumman that are adept at lobbying both Democrats and Republicans in Washington. But with Musk, Bezos and other pro-Trump Silicon Valley figures gaining an edge through their personal ties to Trump, civil servants in the intelligence community may be reluctant to deny them ever-larger contracts, especially since Trump has already fired several inspectors general who investigated Musk’s businesses in other areas of the government.
Anticipating big rewards, Musk is reportedly joining forces with other pro-Trump billionaires to try to carve up the defense and intelligence business. SpaceX is working with Palantir, a hi-tech data analytics intelligence contractor co-founded by Peter Thiel, one of the most prominent rightwing figures in Silicon Valley; Anduril, a new defense contractor founded by 32-year-old pro-Trump tech bro Palmer Luckey; and several other Silicon Valley firms to form a consortium geared towards loosening the grip of the defense industry’s traditional players.
It is hard to separate Silicon Valley’s calls for breaking up the oligarchy now controlling the defense and intelligence business from the eagerness of pro-Trump tech bros to grab as much power and cash as possible while creating a new oligarchy of their own.
The wider TechScape
OpenAI raises $40bn in deal with SoftBank that values it at $300bn
Meta faces £1.8bn lawsuit over claims it inflamed violence in Ethiopia
‘Profiting from misery’: how TikTok makes money from child begging livestreams
UK Home Office loses attempt to keep legal battle with Apple secret
Revealed: Trump’s fossil-fuel donors to profit from data-center boom and green rollbacks
