Credit: Carolyn Kaster/AP
As the votes to decide who will be the next US president continued to trickle in on Friday, Big Tech firms were likely wringing their hands.
Joe Biden had been the candidate many were hoping would emerge victorious. In San Francisco, home of Silicon Valley, the former vice president carried 86pc of the vote, having received backing from high profile figures such as Eric Schmidt, former Google boss, and Reid Hoffman, the founder of LinkedIn.
In the run-up to the election, donations to his presidential campaign from major tech firms had outnumbered those to Donald Trump’s by 20 to one.
But, it appeared the outcome may be better than even they could have imagined. What could be on the cards is a Biden presidency — but without the power to scale back Big Tech’s growing influence.
Biden becoming president is a much more amenable prospect for Big Tech companies than Trump.
His approach to China is a clear example of this. There is hope among Big Tech firms that a Biden administration will have to be more relaxed when it comes to relations with the East.
President Trump has hit out at Beijing on countless occasions on everything from 5G to the coronavirus. The 74-year-old took to blaming China for unleashing the “plague” on numerous occasions throughout his re-election campaign.
In addition, his administration took an aggressive approach toward Chinese tech, including sanctions on Huawei and the forced sale of TikTok’s US operations.
The president also introduced a range of restrictions on the export of US semiconductor manufacturing equipment to Chinese firms as part of its squeeze on Huawei.
Dan Ives, an analyst at Wedbush, says the issue of the US-China “Cold Tech War” is likely to soften in the event of a Biden win.
“This would be a major bullish sign for the likes of Apple, Cisco, and semi names which are caught in the crossfire in this ongoing US China battle with 5G front and center,” Ives says.
“Based on policy platforms, the Street’s view appears to be that a Biden presidency will take a relatively more friendly tone on China technology and policy issues which could ratchet down tensions and rhetoric between the US and China across the enterprise and consumer technology ecosystem, however the long standing issues around piracy and IP theft are not going away.”
During this tenure, Trump also moved to impose tariffs on US goods made in China in a bid to bring home some manufacturing and production.
Should Biden decide to rein in US tariffs it could benefit the likes of Apple, which relies on China for around 15pc of its sales, and chip companies like Intel and AMD.
“There are hopes that Biden’s more collaborative approach could ease some of these tensions,” says Russ Shaw of Tech London Advocates.
“It is likely Biden will take a more lenient stance on trade tariffs, but will remain cautious when it comes to cybersecurity and IP theft.”
But it is not just a less combative approach to the east that tech firms are likely holding out for. Immigration has become one of the most thorny issues under the Trump presidency, and it is one which has raised the hackles of many tech executives.
Since the 2016 election, there have been high-profile rebukes to Trump’s tougher stance on immigration, with names such as Google co-founder Sergey Brin among those protesting a week after Trump’s inauguration against the travel ban from mainly Muslim countries.
More recently, new restrictions have been imposed on visa programs which many of the biggest tech companies use to hire skilled foreign workers. Google boss Sundar Pichai responded by saying on Twitter that he was “disappointed” by the move.
"Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today… We’ll continue to stand with immigrants and work to expand opportunity for all.”
In fact, immigration was cited as the reason why leading computer scientists endorsed Biden back in September, with names such as the Alphabet chairman warning that restrictive immigration rules threatened computer research in the US.
“Joe Biden and Kamala Harris listen to experts before setting public policy, essential when science and technology may help with many problems facing our nation today,” the 24 Turing Award laureates had said.
Biden has a “more accommodating stance on temporary and permanent employment immigration policies”, Tech Advocates’ Shaw agrees. This is a “clear positive for the tech industry”.
Biden may have already garnered the support from many of the world’s largest tech firms — but there are indications that the outcome of the election could prove even more beneficial than a clear Biden victory.
Early signs suggest that Biden will take the White House but the Senate, crucial for passing laws, will be controlled by the Republicans. This will cause some relief in the boardrooms of the tech’s top-tier companies.
While the plethora of ongoing antitrust cases are likely to continue into the new administration, enormous differences around how each side of the aisle view biases on social media platforms remain.
Timeline | Antitrust lawsuits against Google
Republicans and Democrats have struggled for some time to agree on less tricky issues as US politics appears more divided than ever before.
Ives describes the likely outcome as a “goldilocks election” for tech with no Blue Wave appearing.
“Breaking this down from a tech investor perspective and given our conversations with investors, with the Republicans likely to control the Senate the chances of major legislative changes to antitrust law now is off the table in the eyes of investors which posed the biggest risks to tech stalwarts with a ripple impact across the sector,” he says.
The tech giants will also be hoping that a President Biden will be similarly hamstrung when it comes to corporation tax. Trump’s drastic change to the single rate of tax — down to 21pc from 35pc — represented one of the biggest shake-ups of the system in 30 years. Biden wants to raise considerably more from big companies and intends on hiking the rate back up to 28pc. Whether he manages to get such a change across the line remains to be seen.
Investors know that the election results to date are a boon for Big Tech companies. Share prices across FAANG all jumped on Thursday as Biden’s route to the White House became clear.
But, scepticism of tech’s growing dominance remains from both parties. Should the status quo change and lawmakers begin to find some common ground, a Biden presidency may not be as safe as once thought.
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