This IDC Blog provides an initial assessment of the potential implications of the new US administration on the worldwide Information Communication Technology (ICT) market.
The global digital landscape is experiencing profound transformations, with a deepening interdependence between technology and economic growth. This convergence brings a host of uncertainties, opportunities, and challenges, further complicated by ongoing global tensions. In IDC’s Future Enterprise Resilience & Spending Survey (Wave 11, December 2024), over 30% of the IT leaders considered “the impact of geo-political factors (e.g. tariffs, export controls) on tech budgets” to be the primary risk for technology strategies and spending in the coming year.
The 2024 US elections were watched with keen interest, considering the global implications of US policy. There is much speculation around the new administration’s agenda, budget priorities, shifts in policy and regulations, proposals for new programs such as the Department of Government Efficiency (DOGE), and the impact of tech leaders in positions of political influence. The second term of the Trump administration officially kicked off on January 20th and from day one the administration started enacting a series of executive orders.
These changes are likely to have an impact on technology suppliers, vendors that serve US federal, state and local governments, and enterprises in the private sector. In the coming year, governments and businesses in other countries will also need to assess the implications on their technology investments and priorities. As the details of the Trump administration emerge in the coming weeks, we will be identifying significant impacts on the technology and digital landscape, particularly in the following areas: the US Government Digital Agenda, Technology Trade and Digital Supply Chain, Digital Regulation and Policy, Data Privacy and Cybersecurity, and Energy and Green Technology.
Key Tech Topics to Watch in 2025
The US Government Digital Agenda
In the past months, President Trump and other leaders within the incoming US administration voiced plans to reverse several initiatives of the Biden administration that impact healthcare, climate, AI and cybersecurity policies, government spending, and budget priorities.
Budget negotiations are also on the horizon with the current federal government funded through March 14, 2025. Even more changes are possible depending on the impact of the Department of Government Efficiency (DOGE) and the roles for private sector advisors within specific agencies to recommend budget cuts, staff reductions and possibly reforms in disaster relief, immigration and the tax code.
The federal budget and shifting priorities will also have far-reaching impacts on US state and local governments, as well as research programs and sectors that rely heavily on federal programs and grant money, which often support investments in technological innovations. Shifting budget priorities to domestic issues could negatively impact funding for international nonprofits and foreign aid agencies which as of late, have been pursuing tech modernization.
Technology Trade and Digital Supply Chain
Trade policies were a key pillar of President Trump’s 2024 campaign. The incoming administration has signaled a willingness to pursue additional export controls on national security grounds, especially in advanced technology. This is considering a continued negative balance of trade in technology, which increased from -$2.18 billion in 2023 to -$2.7 billion in 2024, according to data from the U.S. Census Bureau.
Upon inauguration, President Trump introduced a memorandum on “America First Trade Policy,” which directs federal agencies to address trade deficits, explore an External Revenue Service for tariffs, and assess export controls to maintain the US’s “technological edge.” Over the coming weeks, it will be important to monitor free trade agreements, bilateral trade deals, IP legislation, semiconductor supply chain policies, and more, as these will all potentially have digital impacts.
Maintaining this edge in AI appears to be a priority, and work is being done in securing AI/digital supply chains. President Trump repealed former President Biden’s 2023 executive order on AI risks, stating that it hinders AI innovation (see next section). However, he has thus far maintained executive orders related to AI supply chains from the Biden administration, including one on securing energy for AI and a new AI export control framework introduced last week. This framework provides global licensing requirements, expands the Foreign Direct Product Rule to cover advanced AI chips and model weights, imposes quotas to limit their accumulation, and reshapes semiconductor trade by targeting high-performance AI technologies. These restrictions, if upheld, will have potential impacts on the global AI market and access to digital supply chains.
Digital Regulation and Policy
Key figures in the Trump administration have voiced support for general deregulation, considering extensive laws as inhibitors to innovation. Digital regulations that are anticipated to undergo significant changes will include data privacy (see next section), data center development, telecommunications—particularly in relation to 5G advancements—and AI. President Trump overturned former President Biden’s 2023 executive order on AI that put in place guardrails around the AI development and usage. While the new administration may reshape existing digital regulations, we anticipate that a degree of scrutiny will remain consistently in place.
This week, President Trump announced “Stargate,” a $500 billion AI infrastructure initiative led by OpenAI, SoftBank, and Oracle with support from major investors including MGX (Abu Dhabi’s AI-focused fund) and technology partners Microsoft, Nvidia, and Arm Holdings. The stated goal of Stargate is to build advanced data centers and virtual infrastructure in the U.S. and continue the US lead in AI innovation. The first datacenter is reported to be under construction in Abilene, Texas. The move could create more AI jobs and create more AI-ready infrastructure to advance AI development and deployment.
The delivery of these large-scale datacenters requires resources, and the Stargate team is complex with multiple high-powered stakeholders, so it will be important to watch the timeline for build out and completion. It is also important to consider that AI innovation will require participation from start-ups and smaller innovators beyond the Stargate members and global competitiveness will require advancements in AI research, talent development, and responsible AI guardrails.
With the nomination of Commissioner Andrew Ferguson as chair of the Federal Trade Commission (FTC or Commission) and Gail Slater to helm the US Department of Justice’s (DOJ) Antitrust Division, the Trump administration’s antitrust policy is expected to diverge from the past four years towards a “more relaxed” antitrust approach, reducing merger enforcement and being more receptive to settlements and consent decrees.
Data Privacy and Cybersecurity
During his 2024 campaign, President Trump indicated that data privacy and cybersecurity will remain important. The previous Trump administration established several initiatives related to cybersecurity, including a “defend forward” cybersecurity policy in the Department of Defense, promoting proactivity rather than reactivity, and creating the Cybersecurity and Infrastructure Security Agency (CISA) under the Department of Homeland Security (DHS). However, the current Trump administration has indicated that it is looking to shrink the role that the Cybersecurity and Infrastructure Agency (CISA) plays in domestic cybersecurity regulation, instead shifting responsibilities to states and public-private partnerships as well as individual companies.
President Trump’s administration has terminated all memberships of advisory committees that report to DHS, and this includes the Cyber Safety Review Board (CSRB) in CISA which investigates major cybersecurity incidents, such as the Salt Typhoon attack. While no further action has yet taken place, Kristi Noem, Trump’s nominee for Homeland Security Secretary, commented in her confirmation hearing that she would make cuts to CISA and refocus its mission, removing its role in countering disinformation and online foreign influence in US elections. This will alter spending priorities for cybersecurity infrastructure in the near-term.
With regards to data privacy legislation, President Trump’s campaign indicated a preference for minimal federal intervention, self-regulation in data privacy and security, and market-driven solutions over strict federal mandates. For a comprehensive picture on the data privacy landscape, watching state actions will be critical. Nineteen states have passed comprehensive data laws since the inception of California’s Consumer Privacy Rights Act in 2019. State-led momentum may continue under a deregulation-focused new administration.
Energy and Green Technology
President Trump, on Tuesday, January 21, signed an action withdrawing the US again from the Paris Agreement, declared a National Energy Emergency, and revoked a series of Biden administration orders focused on tackling climate crisis. It is anticipated that drilling and mineral mining will be at the core of the country energy strategy. In his inaugural speech he also vowed to repeal an electric vehicle mandate. These actions provide a window into the administration’s energy policy, which is expected to change priorities for green technology innovation and influence investments in sustainable IT solutions.
Conclusion
According to IDC Worldwide Black Book Live Edition (December 2024 Release – Baseline Scenario), Worldwide Total ICT Spending is expected to grow +7.8%, reaching $6.57 trillion in 2025. IDC’s “Downside Scenario” in which weaker economic growth, supply chain disruption, and resurgent inflation could impact some types of enterprise and consumer spending, would limit Total ICT Spending growth to +3.2% in 2025. At this time, the Baseline Scenario remains the most probable one. The next update will be on January 30.
The new administration’s plans will become clearer in the coming weeks, and we expect continuous activity from the Trump administration. This blog details only initial executive actions taken as of January 21, 2025. IDC will continue to analyze developments through a series of deep-dive studies on the new US administration’s digital impact, as well as the impact of any responses by other governments. We will provide ongoing recommendations to technology suppliers and buyers, so they can react and adapt to fast-changing market conditions.
IDC is also continuing its rigorous processes to deliver timely, data-driven research. This includes monthly updates to downside and upside scenarios to reflect potential outcomes for the global economy and ICT market. In IDC’s last detailed analysis on December 31, 2024, we set the expectation that ICT forecasts will remain fluid due to uncertainty in short-term policy measures and future trade negotiations.
To learn more, please reach out to any of our expert analysts on the IDC Government Insights Team.
Contributing Authors:
