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DW Newsletter # 197 – Tech titans and Trump: the power play shaping US digital future

Dear readers,

Donald Trump’s return to the presidency has ushered in a new era of complex alliances between his administration and the tech world. Once an outspoken critic of major tech companies, Trump now finds himself supported by the leaders he previously condemned. Executives from Amazon, Meta, Alphabet, Tesla, and others have contributed heavily to his second inaugural fund, seeking favour in a political landscape where their stakes are higher than ever. Such an intricate web of mutual benefit has created an environment where political ambitions and corporate interests are deeply intertwined.

Most notably, Elon Musk, CEO of Tesla, SpaceX, and X (formerly Twitter), has emerged as one of Trump’s most influential backers. Musk’s $277 million contribution to Trump’s campaign and political committees has secured him direct access to the president and a leadership role atop the newly formed Department of Government Efficiency. Musk’s ambitions extend from expanding federal support for Starlink to reducing regulations for Tesla’s self-driving cars. Perhaps most importantly, Musk hopes Trump will champion his lifelong dream of sending astronauts to Mars, a vision that aligns with the administration’s rhetoric on US innovation and global leadership.

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Jeff Bezos, the founder of Amazon and another recent Trump backer, has recalibrated his approach to Trump. Despite previous hostilities, including Tramp’s sharp criticisms of the Washington Post, Bezos has made strategic moves to mend relations. Amazon’s $1 million donation to Trump’s inauguration and the production of a Melania Trump documentary highlight Bezos’s efforts to secure a softer regulatory environment for Amazon. With antitrust challenges and labour disputes threatening the company’s operations, Bezos’s strategy underscores the importance of aligning with political power to protect Amazon’s interests in cloud services, e-commerce, and space exploration.

Mark Zuckerberg, CEO of Meta, has also aligned his platform’s policies with those of the Trump administration. Meta contributed $1 million to Trump’s inaugural fund, and Zuckerberg significantly changed his platform’s stance on misinformation, ending fact-checking initiatives that Trump had long criticised. These moves have brought Zuckerberg closer to Trump as Meta faces antitrust litigation over its ownership of Instagram and WhatsApp. A more lenient regulatory approach could prove pivotal for Meta’s future as Zuckerberg continues to court political favour.

The case of TikTok presents another layer to this evolving narrative. After being targeted for a ban under Trump’s first term due to national security concerns, TikTok has experienced a dramatic shift in its relationship with the administration. Trump’s newfound appreciation for the platform’s ability to disseminate pro-Trump content has led to a reprieve, with an executive order delaying its ban. TikTok’s CEO, Shou Zi Chew, is now working to secure the platform’s long-term presence in the USA, potentially through a joint venture with US investors. The merger of the two streams would ensure TikTok’s survival and cement its role in the US digital ecosystem.

As the Trump administration takes shape, the interplay between politics and technology has reached enviable levels. Tech leaders leverage their contributions and influence to secure regulatory leniency, government contracts, and policy endorsements. In return, Trump gains significant financial backing and digital support from some of the world’s most powerful companies. While the immediate benefits of these alliances are evident, the long-term implications for innovation, regulation, and public trust remain uncertain. Such an intersection of technology and politics is poised to shape the future of both industries, reflecting the growing importance of strategic partnerships in navigating today’s complex political and economic landscape.

Trump reveals Microsoft in negotiations to buy TikTok

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Chinese tech firm DeepSeek has sparked a shift in the global tech landscape, challenging American companies’ dominance of closed-source models. DeepSeek’s models are praised for their cost-effectiveness and openness, which could promote rapid innovation and wider adoption.

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Marko and the Digital Watch team

Highlights from the week of 24-31 January 2025

Tech stocks fall as DeepSeek disrupts market

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Italian data protection authority launches investigation into DeepSeek AI over privacy concerns

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The rise of DeepSeek’s low-cost AI model has sparked a sharp selloff in Australian stocks linked to artificial intelligence, raising concerns over the future of tech investments.

ECB official pushes for digital euro in response to Trump’s stablecoin strategy

ECB board member Cipollone warned that dollar-backed stablecoins could disintermediate banks, underscoring the urgency for Europe to launch its own digital currency.

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Tech firms urged to remove violent content after Southport murders

The UK government has demanded urgent action from major social media platforms to remove violent and extremist content following the Southport killings. Home Secretary Yvette Cooper criticised the ease with which Axel Rudakubana, who murdered three children and attempted to kill ten others, accessed an al-Qaeda training manual and other violent material online. She described the availability of such content as “unacceptable” and called for immediate action.

Rudakubana, jailed last week for his crimes, had reportedly used techniques from the manual during the attack and watched graphic footage of a similar incident before carrying it out. While platforms like YouTube and TikTok are expected to comply with the UK‘s Online Safety Act when it comes into force in March, Cooper argued that companies have a ‘moral responsibility’ to act now rather than waiting for legal enforcement.

The Southport attack has intensified scrutiny on gaps in counter-terrorism measures and the role of online content in fostering extremism. The government has announced a public inquiry into missed opportunities to intervene, revealing that Rudakubana had been referred to the Prevent programme multiple times. Cooper’s call for immediate action underscores the urgent need to prevent further tragedies linked to online extremism.

Ads to launch on Threads platform

Meta has begun testing advertisements on its Threads platform in the US and Japan, targeting a small group of users with image ads in their home feeds. The trial comes as the platform surpasses 300 million monthly active users. Businesses will have the opportunity to extend their existing Meta campaigns to Threads, with the company closely monitoring the tests before a wider rollout.

Advertisers will also benefit from a new inventory filter powered by AI, enabling control over the type of content their ads appear alongside. Analysts suggest that while Threads is still a minor player in Meta’s overall revenue strategy, growing uncertainty around TikTok has led brands to explore alternative platforms.

Launched in July 2023 as a competitor to X, formerly known as Twitter, Threads continues to attract users following X’s controversial changes under Elon Musk. Meta’s plans to expand its AI infrastructure with a $65 billion investment this year further highlight its ambitions to remain competitive with tech giants such as OpenAI and Google.

While Threads is not expected to contribute significantly to Meta’s revenue by 2025, its integration into Meta’s broader ad ecosystem demonstrates the company’s efforts to capitalise on the platform’s growing popularity.

Zuckerberg drives Meta’s bold AI ambitions with $65 billion plans for 2025

Meta Platforms plans to invest up to $65 billion in 2025 to strengthen its artificial intelligence infrastructure, positioning itself against competitors OpenAI and Google. Chief Executive Mark Zuckerberg announced the plans, including ramped-up hiring for AI roles and the development of a massive 2-gigawatt data centre, enough to cover much of Manhattan.

The company, a significant buyer of Nvidia’s AI chips, aims to have over 1.3 million graphics processors in place by the end of the year. Meta intends to introduce about 1 gigawatt of computing power in 2025, marking a pivotal step in its strategy. Zuckerberg highlighted the transformative potential of AI, predicting its influence on Meta’s products and business over the coming years.

Competition in the AI sector has intensified, with companies like Microsoft and Amazon also committing tens of billions to AI infrastructure. Meta’s announcement follows news of Stargate, a $500 billion AI venture involving OpenAI, SoftBank, and Oracle. Analysts suggest Meta’s timing underscores its determination to remain a key player in the AI race.

Meta has distinguished itself with its open-source Llama AI models, which are freely accessible to consumers and businesses. Zuckerberg expects Meta’s AI assistant, already serving 600 million users, to reach over 1 billion by 2025. The planned investment significantly exceeds previous spending levels, signalling Meta’s commitment to leading in the rapidly evolving AI landscape

Databricks secures $10 billion backing from Meta

Meta Platforms has joined a $10 billion investment round for Databricks, a data analytics firm specialising in AI applications. The funding, which closed on Wednesday, values the San Francisco-based company at $62 billion. This round also included a $5.25 billion credit facility led by major financial institutions such as JPMorgan Chase and Goldman Sachs, aimed at boosting Databricks’ expansion and product development efforts.

Founded in 2013, Databricks provides tools to help businesses process, analyse, and apply artificial intelligence to complex datasets. The firm has benefited from the increasing corporate demand for AI technology, catalysed by the rapid adoption of platforms like OpenAI’s ChatGPT. Meta’s investment strengthens an existing partnership between the two, particularly in leveraging Meta’s Llama, a family of open-source large language models.

With over 10,000 organisations, including Shell and Comcast, already utilising its platform, Databricks is at the forefront of enterprise AI applications. According to CEO Ali Ghodsi, this deepened collaboration with Meta will help Databricks better serve enterprise clients using Llama, further solidifying its position in the AI race.

Confusion as Meta users face automatic follow issue with Trump profiles

Meta users in the US are experiencing an unusual phenomenon where they are being automatically re-followed by the accounts of President Donald Trump, Vice President JD Vance, and first lady Melania Trump. The issue emerged after users intentionally unfollowed these accounts following the administration’s transition. Feedback from users, including actress Demi Lovato and comedian Sarah Colonna, highlighted frustration over the inability to maintain their choice to unfollow prominent political figures.

Upon the change of administration, official White House social media accounts are supposed to transition smoothly to the new leaders. While Meta’s communications director Andy Stone acknowledged that followers from the Biden administration were carried over to Trump’s accounts, he confirmed that users were not being forced to re-follow these profiles. Stone suggested that delays in processing follow and unfollow requests might contribute to the confusion experienced by users.

Many individuals reported recurrent issues despite efforts to unfollow the accounts multiple times, raising questions about the underlying technicalities involved. Users are expressing concerns over privacy and choice in the use of social media platforms, as the ability to curate their feeds appears compromised. However, this automatic re-following could reflect broader implications for user control in digital spaces.

As Meta has yet to release a detailed response to the reported glitch, users continue to voice their concerns across multiple platforms. The situation underscores an ongoing need for clarity and assurance regarding user preferences in social media interactions, especially during a politically sensitive time.

WhatsApp wins temporary relief in India data sharing case

An Indian court has temporarily suspended a ban on data sharing between WhatsApp and its parent company, Meta. The ban, imposed by India’s competition regulator last year, had restricted WhatsApp from sharing user data with other Meta platforms, such as Facebook and Instagram, for advertising purposes.

Meta had argued that this restriction would severely impact its business model and potentially force it to roll back features. The court acknowledged the potential harm to WhatsApp’s business and agreed to suspend the ban while it continues to hear Meta’s appeal.

India is a crucial market for Meta, with hundreds of millions of users across its platforms. The company had warned that the data sharing restrictions would prevent businesses from effectively targeting ads to relevant audiences, hindering their ability to grow and reach customers. The court’s decision provides a temporary reprieve for Meta while the legal battle continues.

The Indian competition regulator had argued that WhatsApp’s data sharing practices were anti-competitive and unfairly benefited Meta. However, Meta maintained that the data sharing was necessary for providing a seamless user experience and offering valuable services to businesses. The court’s decision highlights the ongoing debate surrounding data privacy and the use of user data for targeted advertising.

Instagram error hides results for ‘Democrats’

Instagram has been facing backlash after a technical issue caused search results for the terms ‘Democrat’ and ‘Democrats’ to be hidden. Users searching for these terms have encountered a message stating that the results may contain sensitive content. In contrast, hashtags such as ‘Republican’ continue to display posts without such issues. Meta, the parent company of Instagram, has stated that the problem is not politically motivated, as it has also affected other political hashtags.

Social media experts have warned that the glitch could harm Meta’s reputation, particularly in a highly partisan political climate. Matt Navarra, a social media consultant, described the situation as embarrassing for Instagram, suggesting it could fuel conspiracy theories and further divisions among users. Meta has confirmed it is working urgently to fix the issue.

This incident comes at a time of increased scrutiny over Meta’s handling of political content on its platforms. The company has faced criticism from various sides of the political spectrum, and its recent changes to content moderation policies have attracted further attention.

Ex-Meta COO faces penalties over Cambridge Analytica email scandal

Former Meta Platforms COO Sheryl Sandberg has been sanctioned by a Delaware Chancery Court judge for deleting emails linked to the Cambridge Analytica privacy scandal, despite orders to preserve them. Judge Travis Laster determined that Sandberg used a personal email account under a pseudonym to erase messages potentially relevant to a shareholder lawsuit. The sanctions are likely to complicate her defence in the trial set for April, and she has been ordered to cover shareholders’ expenses related to the motion.

The lawsuit, filed in 2018, accuses Facebook’s leadership of harming investors by violating a 2012 Federal Trade Commission consent order to protect user data. Shareholders also allege the company paid a $5 billion fine in 2019 to shield founder Mark Zuckerberg from personal liability. Zuckerberg is expected to face a second deposition before the non-jury trial begins. Sandberg has argued that her email deletions did not affect critical evidence, claiming that relevant messages were often copied to others.

Judge Laster criticised the deletions, stating they likely erased the most sensitive communications. The court also considered similar allegations against Jeffrey Zients, a former Meta board member, but deemed his deleted emails less significant as he joined after the Cambridge Analytica scandal emerged. The case has been described by Laster as involving “wrongdoing on a truly colossal scale,” with significant implications for accountability in corporate governance.

Meta faces new scrutiny over EU law compliance

Meta Platforms, the parent company of Facebook and Instagram, is once again under fire by the European Consumer Organisation (BEUC) over its ad-free subscription service. Introduced in 2023, the fee-based option offered European users the ability to opt out of personalised ads, with a subsequent price cut of 40% implemented later that year. However, BEUC claims these changes are merely superficial and fail to address deeper concerns about fairness and compliance with EU consumer and privacy laws.

BEUC’s Director General, Agustin Reyna, criticised Meta for not providing users with a fair choice, alleging that the company still pressures users into accepting its behavioural advertising system. Reyna called on consumer protection authorities and the European Commission to investigate Meta’s practices urgently, emphasising the need for decisive action to safeguard users’ rights. The consumer group also accused Meta of misleading practices, unclear terms, and failing to minimise data collection while restricting services for users who decline data processing.

In response, a Meta spokesperson defended the company’s approach, arguing that its November 2023 updates go beyond EU regulatory requirements. Despite these assurances, EU antitrust regulators have raised concerns, accusing Meta of breaching the Digital Markets Act. They claim the ad-free service forces users into a binary choice, sparking broader concerns about how the tech giant balances profit with consumer protection.

As pressure mounts, Meta faces growing scrutiny over its compliance with EU laws, with regulators weighing potential measures to address BEUC’s allegations and ensure fair treatment for European users.