Greetings all — 

So it’s been a couple weeks since the election and things are going about as well as one might have predicted. Elon Musk, appointed by Trump to the para-governmental meme cabinet, the Department of Government Efficiency (DOGE), has pledged to fire public sector workers en masse and pry trillions from the federal budget. A parade of cranks, TV personalities past their sell by dates, and alleged sex criminals have been tapped for some of the highest posts in the nation. The nominated EPA chief is more interested in boosting the AI industry than the environment. And it’s already clear that it’s boom times for crypto (the price of bitcoin is through the roof) and defense tech (so is Palantir stock).

At least Matt Gaetz, nominated for Attorney General, and who Musk endorsed as “the Judge Dredd America needs to clean up a corrupt system,” withdrew after a second allegation surfaced that he paid to have sex with an underaged girl, insane as it was that he was nominated in the first place.

One thing is certain: Trump’s election has already dramatically transformed the outlook for the tech industry. So what can we expect in the long months and years to come? What can we read in the tea leaves? Over the next two newsletters, I’ll aim to tackle exactly this. We’ll dig into:

-How to understand the coming reign of Elon Musk and his allies

-The now and future boom time for defense and surveillance tech

-The now and future crypto boom

-How to think about platforms and online media in the Trump age

-How a Trump administration affects the AI equation

A quick note or two before we get into it: I’ve started a weekly podcast with my good friend Paris Marx. It’s called System Crash, and the first episode just dropped. I hope you’ll check it out.

This newsletter is *100% reader supported*, so if you find value in it, and are interested in seeing it continue, please share, spread the word, and, if you can, chip in a few bucks a month. I can’t do it without the financial support of readers. And a big thanks to those who do: Your support is helping to bring a critical analysis of the tech sector to wider audiences; just last week, Blood in the Machine was featured in the New York Times, Fast Company, and TechMeme, making it one of the most-read weeks in this newsletters’ short history. My post on Bluesky—which contained ideas for keeping the site democratic and free of VCs’ influence—was read and shared by members of the site’s leadership. Thanks again, and hammers up.

Now, without further ado, let’s take a look at what we can broadly expect to see happen with tech under Trump.

The dawn of the Elon-Trump technocracy

More so than in recent elections, the tech industry played an outsized role in the outcome: Tech billionaires donated their celebrity and their cash, a major social media network was transformed into a pro-Trump clearinghouse, and it all played out in an information ecosystem hobbled by tech monopolies. And now we’re now poised to see what may be the most tech industry-centric presidency since Obama’s first term. The tone, of course, is quite different. Instead of a faint and illusory equation of tech with progress, we have a raw and unabashed expression of tech as power.¹ And sitting at the center of the emergent nexus, of course, is Elon Musk.

Musk, Trump’s righthand man since the campaign’s home stretch, marshaled his wealth, celebrity, and platforms to support his reelection. He joined an emboldened and growing openly rightwing faction in Silicon Valley that is now well positioned to exert power in the new administration. These men include David Sacks, the VC who held fundraisers for Trump, Jon Lonsdale, another VC who poured cash into Musk’s PAC, Peter Thiel, who despite having a falling out with Trump, emerged as a kingmaker—his mentee is now the Vice President of the United States—and Valley stalwart Marc Andreessen, who supported Trump with cash and a public endorsement, and was at Mar-a-Lago on election night. Oracle CEO Larry Ellison, meanwhile, helped Trump allies build a database of bureaucrats loyal to the MAGA cause, for Trump’s promised coming purge of non-loyal bureaucrats.

The thing to bear in mind here is how nakedly transactional Donald Trump’s politics are—Matt Gaetz is a pro-Trump lifer, so he gets the AG nominee, despite the fact that he may be the worst candidate to be nominated in that office’s history. (This is why almost every big tech CEO rushed to kiss Trump’s ring on the day of his victory, from OpenAI’s Sam Altman to Google CEO Sundar Picchai to Tim Cook to Mark Zuckerberg, who applauded the man who has threatened to imprison him as a “badass.” They know a public display of deference is one of the best bets for placating the president-elect.) Many of the new insiders are VCs and defense tech CEOs—we can expect the sort of open favor-trading and power-brokering we saw in the first administration to extend further into Silicon Valley this go round. We can see the beginnings of a shabby Trump-era technocracy.

In terms of newfound influence, Elon’s, of course, towers over them all. He clearly relishes the adulation and his proximity to power; he’s been labeled Trump’s “shadow president,” he’s hanging out at Mar-a-Lago all the time, achieved “uncle status” per Trump’s grandkids, has his own walk-on music at the club, and appeared ringside with the president-elect at Vegas. But the election stands to benefit both Musk’s companies and his pet political projects. Musk has already pledged to continue supporting Trump-friendly candidates in the midterms with his PAC, and will keep using X as a megaphone for Trump-related causes; in return, we might expect not just a favorable regulatory climate, but favors, period.

Many of Musk’s businesses rely on government contracts, of course—Starlink and SpaceX have long raised red flags among watchdogs due to the combo of large government contracts, international operations, and dealings with the foreign leaders they traffic in. We can expect all that to entrench, and likely to expand. Musk supports Trump’s plan to kill the $7,500 electric vehicle tax credit, because he’s said it would “be devastating” for his competitors. We’ve already seen some local police departments adopting Teslas and Cybertrucks—it’s not hard to imagine ICE, Homeland Security, or other agencies making large orders of Musk-brand vehicles and equipment.

Meanwhile, Musk’s chaotic management of X, the platform formerly known as Twitter, had caused advertisers to flee (primarily, they didn’t want to run commercials next to posts from previously banned white nationalists Musk allowed to return to the website) and cratered its value by billions of dollars. Now, buoyed by hopes of returning to Musk’s—and by proxy, Trump’s—good graces, the Financial Times reports that many of those advertisers are already coming back.

Then there’s Musk’s aspirations of dismantling the federal government. DOGE has gotten the lion’s share of the ink—we’ll get to it in just one second—but his efforts to debilitate the National Labor Relations Board are in my opinion much more serious and potentially dangerous. Along with Amazon, SpaceX is leading legal action that claims that the structure of the NLRB itself is unconstitutional, and thus should essentially be dissolved (and, of course, prevented from adjudicating on behalf of workers who are seeking to improve conditions at both companies).

The case would typically be all but absurd on its face, if it wasn’t destined to head to a 6-3 conservative majority Supreme Court that is openly hostile to labor protections, and wasn’t backed by Elon Musk himself; it’s one of those things that would have been unthinkable just a few years ago, but now is firmly at least within the realm of possibility. (It is also worth noting that Musk’s companies also have an almost comically long list of legal cases ongoing with state and federal courts that might benefit from favorable political headwinds.)

And then, of course, there’s DOGE, the project Trump announced in which Musk and Vivek Ramaswamy will provide “advice and guidance from outside the government” about how to cut jobs. This week, Musk and Ramaswamy published an op-ed in the Wall Street Journal laying out DOGE’s plan “to cut the federal government down to size”:

The entrenched and ever-growing bureaucracy represents an existential threat to our republic, and politicians have abetted it for too long. That’s why we’re doing things differently. We are entrepreneurs, not politicians. We will serve as outside volunteers, not federal officials or employees. Unlike government commissions or advisory committees, we won’t just write reports or cut ribbons. We’ll cut costs.

We are assisting the Trump transition team to identify and hire a lean team of small-government crusaders, including some of the sharpest technical and legal minds in America. This team will work in the new administration closely with the White House Office of Management and Budget. The two of us will advise DOGE at every step to pursue three major kinds of reform: regulatory rescissions, administrative reductions and cost savings.

Ramaswamy has floated some impressively asinine methods for firing workers en masse, like terminating employees randomly, according to whether their Social Security Numbers were odd or even. As many have noted, this slash-to-the-bone mentality is reminiscent of what Musk did after he purchased Twitter—cutting 80% of the staff immediately after the acquisition. That, of course, led to a dramatically tanking user experience and plummeting revenues soon afterward.

As with much of what’s promised from the Trump campaign, it can be hard to know how seriously to take the DOGE—as of right now, it’s the equivalent of some Musk tweets, a press release, an op-ed, and public handwringing. It’s hard to imagine many Republicans will want to find themselves associated with mass layoffs that would be felt in districts across the country, that Musk and Ramaswamy will maintain their interest in issuing referenda to large bureaucracies without any real authority, or that it’s even legal to issue such mass firings. But who knows! These are deranged times, and for now, it’s best to prepare for the worst and expect the absurd.

Another stray thought on the subject: This hasn’t explicitly been said anywhere, but why do I get the feeling that Musk, a well-known believer in the power of AI, and the CEO of an AI company to boot, is imagining, in his grandiose and incurious way, that a lot of these jobs can be done by AI, perhaps even by AI services sold by his company? And that’s how we get a government run by Grok? But I digress.

With or without AI, Musk—and his allies, as we’ll see below—stand to benefit widely and materially, and exert a serious amount of influence on how the state engages technology in a Trump presidency. It’s true, as many have pointed out, a lot of this depends on whether Elon and Trump’s relationship hangs together—Trump is famously averse to being upstaged, and is not shy about jettisoning even prominent allies. And Musk has a massive ego and addled temperament of his own. Trump has already made some jokes that suggest a genuine annoyance around Elon’s ubiquity ("Elon won't go home. I can't get rid of him—at least until I don't like him," Trump said recently), and, look, I would love nothing more than to see this relationship collapse like a dying star.

But I wouldn’t bank on it. They both simply have too much to gain from the symbiosis, and there’s a weird equilibrium between the two megalomaniacs. Trump only really respects two things, wealth and fame. Elon has more of the former than anyone the world, and perhaps more of the latter than anyone apart from Trump himself. Elon, meanwhile, seems to want affirmation above all; unlike Trump, he is never so confident that he deserves it, is happy to defer to Trump to get it, and the uncomplicated, blunt transactionalism of Trump-world feels perfect for him. He never has to guess what’s going on below the surface. Everyone is using everyone else, but he has the most money, and is therefore the most useful.

But it’s bigger than just Elon.

Boom times are coming for defense and surveillance tech

And thus, for fraud, for surveillance, and an even further expansion of the military industrial complex.

Much of the emerging Trump technocracy is big into defense tech. Sam Biddle has a good piece in the Intercept about how Trump’s victory was also a victory for Silicon Valley’s “warrior class”—guys like Thiel, Lonsdale, JD Vance, and Palmer Luckey, who, after founding Oculus and selling it to Facebook (and getting fired for pro-Trump political activities at the company), started the defense tech firm Anduril.

In an industry that used to try to keep its dealings with the military under wraps—worker protests broke out at both Microsoft and Google when it became clear they were contracting with the DoD—this cohort unabashedly pitches weapons tech as necessary for a coming cataclysm with China:

This “warrior class” mentality traces its genealogy to Peter Thiel, whose disciples, like Luckey, spread the gospel of a conservative-led arms race against China. “Everything that we’re doing, what the [Department of Defense] is doing, is preparing for a conflict with a great power like China in the Pacific,” Luckey told Bloomberg TV in a 2023 interview. At the Reagan National Defense Forum in 2019, Thiel, a lifelong techno-libertarian and Trump’s first major backer in tech, rejected the “ethical framing” of the question of whether to build weapons.” When it’s a choice between the U.S. and China, it is always the ethical decision to work with the U.S. government,” he said. Though Sinophobia is increasingly standard across party affiliations, it’s particularly frothing in the venture-backed warrior class. In 2019, Thiel claimed that Google had been “infiltrated by Chinese intelligence” and two years later suggested that bitcoin is “a Chinese financial weapon against the U.S.”…

Thiel’s gravitational pull is felt across the whole of tech’s realignment toward militarism. Vice President-elect JD Vance worked at Mithril, another of Thiel’s investment firms, and used $15 million from his former boss to fund the 2022 Senate win that secured his national political bona fides. Vance would later go on to invest in Anduril. Founders Fund, Thiel’s main venture capital firm, has seeded the tech sector with influential figures friendly to both Trumpism and the Pentagon. Before, an investor or CEO who publicly embraced right-wing ideology and products designed to kill risked becoming an industry pariah. Today, he can be a CNBC guest.

And that’s the cohort that is poised to assume power in the next iteration of Trumpworld. Lonsdale and Thiel are co-founders of Palantir, one of the biggest defense tech firms in the nation—after Trump’s victory, the stock price of Palantir shot up so high it eclipsed Lockheed-Martin’s; historically one of the country’s largest defense contractors. (Musk, meanwhile, has been petitioning Trump to have SpaceX execs filled into Defense Dept. roles, according to the New York Times.)

Palantir is perhaps best known for its ties to the previous Trump administration, where it enjoyed $1.5 billion worth of contracts in the DoD, Immigration and Customs Enforcement (ICE), and the Department of Homeland Security—and for its much-criticized role in targeting migrants for deportation. (Biden allowed many of these contracts to continue, as Edward Ongweso Jr points out in Fast Company.)

With Trump’s promise to ramp up mass deportation beyond what he attempted in his last term, and this cohort of loyalists at the fore, expect to see a renewed gold rush in dubious AI-enabled surveillance tech and database systems for tracking migrant workers and dissenters. Palantir was given contracts to handle such work during the last Trump term, Oracle has been helping the Trump team assemble databases of government workers loyal to Trump (presumably to spare in a coming purge), and Musk has already called for Luckey to meet with the White House. In sum, with a rise in Sinophobia, the US invested in wars in two theaters, and promises to execute historic mass deportation, expect the boom that has already begun in defense tech to continue, and an invigorated interest in surveillance and administrative AI—and for the men who most loudly backed Trump’s campaign to benefit.

All of the above will accelerate a trend that had already been underway; big tech companies more aggressively and openly pursuing defense department contracts, and work with agencies their employees may once have deemed unethical, like ICE. As I noted after the election, for many Silicon Valley elites, the days of taking employees’ ethical concerns and protests into account are fading happily into the past. Big tech has been quick to fire dissenting workers already, and now there’s a more explicit authoritarian creep into the sector.

Trump’s win only underscores that Silicon Valley’s message is, increasingly, no longer a promise of progress—it’s to power.

Next week, we’ll dig into what we can expect in the world of crypto, AI, and social media. See you then — and remember to put down all machinery hurtful to commonality.