I guess you could say that the president has a few reasons for freaking out about the tech industry — some of them good, and some of them not so good…
Since his inauguration, President Trump has invited many executives of the tech industry to serve as advisors for a special counsel that he created.
Many jumped at the opportunity to aid the president in reworking policies for businesses (like deregulations and tax breaks) and also for using this new platform to better portray their views on certain political policies.
This new relationship has also provided a great opportunity for the tech industry to secure government contracts, too.
However, this relationship between the president and the tech industry has proven to be fraught with tension, and it has both groups concerned for a lot of reasons…
Will it survive or will it crumble?
Government Tech Is Getting a Face-Lift
The technology used by the government is highly outdated, experts say.
Apple (NASDAQ: AAPL) CEO Tim Cook and many other members of the tech industry were in Washington, D.C., for the inaugural meeting of the American Technology Council, an effort chartered by President Trump in May to upgrade the dated guts of the U.S. government.
Building on the work that began under former President Obama, the Trump administration believes federal agencies should behave more like the private sector — not just in the way they buy and use technology, but also in the services that they offer citizens for interacting with Washington.
For the nation’s tech giants, these reforms aren’t just the stuff of a modern, digitally minded government — they’re potential business opportunities.
Executives like Cook, along with Eric Schmidt of Google’s parent company, Alphabet (NASDAQ: GOOGL), and Jeff Bezos of Amazon (NASDAQ: AMZN), sought to shape the administration’s thinking on issues during an afternoon of closed-door brainstorming sessions.
Some of this brainstorming featured some of the industry’s leading players, such as Salesforce (NYSE: CRM) COO and President Keith Block and also the chiefs of Intel (NASDAQ: INTC) and IBM (NYSE: IBM).
They all discussed the ways that the U.S. government could cut down on some 6,000 costly data centers in its control and shift those responsibilities to the private sector — a move that could mean a windfall for any tech company that may someday win some government contracts.
Federal procurement of new technologies was also a focal point of discussion. Reforms were sorted out during the brainstorming sessions to make it easier for the government to buy the most cutting-edge tools on the market.
President Trump had this to say about modernizing the government’s technology after the sessions:
Our goal is to lead a sweeping transformation of the federal government’s technology that will deliver dramatically better services to citizens and stronger protection from cyberattacks.
Safra Catz, co-CEO of Oracle (NYSE: ORCL) and a member of President Trump’s transition team, had this to say in a statement about the tech-update movement:
We will be rolling up our sleeves and working through the hard issues of how to provide better services to citizens, how to use technology to enable better government decision-making, how to reduce fraud and waste, and how to accelerate moving to the cloud.
We all know that the president is easily excitable at times, but this is definitely a situation that’s worth freaking out over.
The government’s technology is getting a much-needed face-lift, while President Trump has major tech giants eating out of the palm of his hand.
Tech Executives Vs. President Trump’s Controversial Policies
Immigration
For the past eight months, executives from tech giants like Apple, Google, and Microsoft (NASDAQ: MSFT) have been at war with the White House — fighting President Trump in court over his controversial views on immigration.
Yet, the White House’s American Technology Council summit, the second official meeting between the administration and some of the technology industry’s biggest names, highlighted a relationship fraught with tension and sharp political differences.
Few in left-leaning Silicon Valley publicly supported Trump — a notable exception being Venture Capitalist and Facebook (NASDAQ: FB) Board Member Peter Thiel, an outspoken Libertarian.
However, Facebook Cofounder and CEO Mark Zuckerberg remains absent from such meetings due to “scheduling conflicts.”
Adding to the disagreeableness, dozens of tech executives even went so far as to sign an open letter that opposes Trump’s presidency because of his views on immigration reform.
Other Policies
And some of the individuals from the tech industry who initially agreed to serve on a separate business advisory council, such as Uber CEO Travis Kalanick and Tesla (NASDAQ: TSLA) CEO Elon Musk, have broken ranks with the president.
Just before the tech summit, the president withdrew the U.S. from the Paris Agreement, a decision that earned him a sharp rebuke from the tech community — including from some of the CEOs whom he’d met with the previous month.
President Trump’s Paris climate accord announcement caused Musk and CEO Bob Iger of Disney (NYSE: DIS) to leave their positions on the White House’s advisory boards because they disagreed with the President’s decision.
Unrelated to the Paris Agreement, Kalanick resigned from the council. This occurred following charges that the ride-sharing service allegedly tried to profit from Trump’s proposed travel ban in February that sought to prevent citizens of certain Muslim countries from entering the U.S. (the company later denied the charges.)
Transgender Military Ban
Further fanning the flames surrounding the relationship, the president ignited a political firestorm recently when he unexpectedly announced through Twitter that transgender people would be barred from serving in “any capacity” in the U.S. military, with no clarification from Washington as to what the order meant for the approximate 15,000 transgender people who were already serving.
Immediately after the announcement, congressional Democrats and Republicans said they opposed the policy change, and it also caught many top Pentagon officials by surprise.
Less than 24 hours later, the Joint Chiefs of Staff sent a clear message that the military doesn’t consider tweets as orders. This directly conflicted with former White House press secretary Sean Spicer’s earlier assertion that the president’s tweets should be “considered official statements by the president of the United States.”
Whether or not these tweets hold any validity, they have certainly ruffled a lot of feathers.
The onset of this transgender ban in the military has people rioting, not excluding the leaders of some of the biggest and most influential technology companies.
Hours after Trump’s tweets were posted, tech leaders began protesting via social media…
Google CEO Sundar Pichai tweeted:
I am grateful to the transgender members of the military for their service. #LetThemServe.
Twitter Cofounder and CEO Jack Dorsey tweeted:
Discrimination in any form is wrong for all of us #LetThemServe
Zuckerberg posted a status on Facebook, saying:
Everyone should be able to serve their country — no matter who they are.
So far, the tech industry, for the most part, has been on the opposing side of the current administration on other issues beyond President Trump’s transgender ban.
President Trump should definitely be freaking out over such opposition.
These ongoing controversies could very well end the relationship between the tech industry and the U.S. government that President Trump was trying so hard to solidify.
The Bottom Line
For most of the large tech companies, it’s difficult (if not impossible) to sever ties with the White House completely, especially when disagreements arise over controversial politics.
However, they still have the right to voice their distaste.
Jennifer Pahlka, founder and executive director of Code for America, has this to say about the president and his decisions:
This is not a decision I have made lightly. I personally believe that, outside of the issues discussed at this meeting, the policies of the Trump administration are dangerous and harmful to the American public.
Despite these clashes, some players in the tech industry still see possible business opportunities with the White House.
The federal government is a large, well-paying customer for some tech companies and a potential regulator for all.
Several companies also stand to reap billions from tax reforms.
So, what move will the tech executives make next?
Will they bite their tongues in order to secure government contracts? Or will they walk away due to differing political views?
I guess we’ll have to see whether or not President Trump continues to be the only one freaking out over the future of the tech industry’s relationship with the U.S. government.
That’s all for now.
Until next time,
John Peterson
Pro Trader Today