Five areas where there could be changes and which ones
There is no doubt about it. No matter how much effort Europe makes in Artificial Intelligence (A.I.), and no matter how much India tries to emerge in Asia, the leadership in this technological field, which cuts across all sectors of activity, will be decided between the United States of America (USA) and China. It will be the new race to the moon (see article on the subject here).
Personally, I believe that Europe is right to define some regulation on AI (the much talked about “AI Act”) but also to accelerate it (interestingly, a much less talked about Coordinated Plan for Artificial Intelligence, based on 4 axes: ensuring that AI serves citizens, affirming the European Union's leadership in AI in various sectors, getting companies of all sizes to develop AI solutions and not just the big ones, and finally that Europe is the right place to attract as many players as possible to develop more and more solutions in this area.
But what about “America”? And particularly now, Trump's America?
Let's Make America Great Again... in AI
Trump's campaign slogan “Let's Make America Great Again” will become the hat for several industries. But the one that crosses them all, from Automotive to Banking, from Aerospace to Biotechnology, etc., is unquestionably A.I. And that's why much will be debated about it in the next 4 years under Trump's mandate (and it's already being speculated with or without Elon Musk).
But don't think that Musk is on the side of deregulation, or at least that's what the recent past indicates when he went against Sam Altman at OpenAI criticizing the company's orientation, which was designed for a purpose other than purely commercial. In fact, on September 14, 2023, after a meeting with several technology company leaders and U.S. Senators, Musk stated that “it's important that we have an arbiter” for AI, emphasizing the need for government oversight. What direction this regulation will take, in his view, we don't know. At least not yet.
1. Repeal of Biden's Executive Order of October 30, 2023
The first measure expected to be taken by the Trump Administration is the revocation of Biden's Executive Order which attempted, in line with Brussels, to develop AI solutions with some control. According to Trump's electoral program and opinions, the Order prevents the real acceleration of A.I. and, the future 47th President also accuses it of pushing development along radical leftist lines. Whether there will be a new Order or a return to deregulation remains to be seen.
A July 26 article in the French newspaper Le Monde reports that both Trump and future Vice President J.D. Vance advocate deregulation of AI in the interests of greater competitiveness and that this is also the way to defend the citizen, not the incumbent technology companies.
Musk's proximity to Donald Trump could reinforce this idea and lead to a new approach on top of the one proclaimed by the Democrats.
2. Energy... No AI can cope without it
Generating an image using A.I. currently requires the same amount of energy as charging a smartphone. It's therefore not surprising that the subject of A.I. has been linked in some of Trump's opinions to the energy sector: “AI needs tremendous - literally, twice the electricity that's available now in our country, can you imagine?” (Donald Trump on July 19, 2024 at the Republican Party Convention in Milwaukee, Wisconsin).
That said, it's not surprising that Trump's speech is more light-hearted when it comes to climate change, and because much of the published opinion says that he may even tear up the Paris Agreement and abandon the targets for decarbonization, believing that at the moment these targets delay the production of the quantity needed (via fossil fuels) to keep America ahead.
Among the various pressures, from economic to internal party pressures, ideological or otherwise, there is also this practical one. Energy! Without it or because of it. There can be no slowdown in the development of AI for reasons of lack of energy.
We'll soon find out.
3. Defense, of course
In March of this year, Time magazine reported on the US's huge investments in Artificial Intelligence. In fact, since the beginning of the war in Ukraine, we've seen the evidence of US military power and how critical this use was in stopping the Russian invasion, which was larger in terms of manpower (just look online at the famous initial week with Russian troops on their way to Kiev, which were eventually stopped by drones commanded by Ukrainian troops).
Just to give you an idea of both the amounts and the speed, Time mentions in that article that we're talking about contracts related to A.I.-based technology increasing by more than 1000%, from the previous $269 million in 2022 to $4.3 billion in August 2023 (!), if we consider that all the contracts will be fulfilled by the end.
It's therefore not surprising that the issue of security always resonates so much with voters. Whether it's the famous issues of the “wall” and immigration, or external threats. Trump repeated at several campaign rallies that in his first term America did not get involved in wars and that he would end the current ones in no time. Which is not to say that war is not always latent. But as Nixon well understood, no one in the U.S. likes to see money spent overseas, let alone American soldiers fighting. This makes the various articles (in particular this one from the Associated Press) about the future of war increasingly being waged remotely and without soldiers in command of planes, tanks and feet in hostile territory all the more interesting.
Still on the need for security - and, in this case, for the future of the country's cybersecurity - no one will fail to support the measures, with or without A.I.
4. Health and Biotechnology
While the possible appointment of Robert F. Kennedy Jr. to a position in the health sector, known for his controversial stance on vaccines, has been the most popular topic to emerge from the campaign, outside of appointments, it is almost accepted that the general emphasis will once again be on reducing regulations in order to speed up the development of new treatments and technologies.
It's worth noting here that this sector in particular, biotechnology, is one of the most dynamic in terms of innovation and is also the sector that generates the greatest economic return in the long term (5 years). I recommend reading the study carried out by McKinsey in this article, precisely on this subject.
Since Trump seems to like to think big and be big, and since A.I. lacks that scale to generate a “flywheel” movement (companies with more resources have more data and invest more, growing faster), we can expect to see more mergers and acquisitions in the sector, to the detriment of space for greater competition.
5. Automobile
Here it will be even more interesting to see how the measures will unfold. While on the one hand it's true that Trump has Musk on his side and that's why it's foreseeable that Tesla could benefit (shares soared 31.3% in the first week after the election), it's also true that Trump could cancel the measures to support the purchase of electric vehicles and maintain his appetite for traditional combustion vehicles. Or not...
...because while this simplistic reading may be the one to go by, we must not forget that US companies in the sector don't just operate in the US, they operate worldwide. And losing support for innovation and the purchase of electric vehicles could mean falling (even) further behind in the race against Chinese manufacturers, who are clearly leading the way in terms of technology, adoption and price (with the exception of Tesla).
And when it comes to Tesla, or rather Musk, it's important not to forget the production of Tesla cars in Xi Jinping's lands and the duality of being on Trump's side one day and negotiating with Xi the next... and whether he could end up in the role of messenger and mediator or in a full-blown conflict of interest and crossfire with collateral damage weighing on Tesla.
Ricardo Tomé | Lecturer at CATÓLICA-LISBON Executive Education