Startups are ready to thrive under Trump, but some uncertainty remains in a key corner of the space

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In today’s big story, Silicon Valley is getting excited about what Donald Trump’s second term could mean for its businesses.

What’s on deck:

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The big story

United States of Startups

The startup community is ready to be let off its leash.

VCs and founders are hopeful about what they anticipate to be a much looser environment for building and dealmaking under President-elect Donald Trump.

Tech was always viewed as a beneficiary of the deregulation expected in Trump’s second term. But Elon Musk potentially playing a role in the Trump administration means Silicon Valley could benefit even more, writes Business Insider’s Samantha Stokes, Riddhi Kanetkar, and Helen Li.

One VC compared Musk streamlining the government to a “chainsaw through calcified butter.”

Even those who weren’t rooting for Trump see benefits to a potential hands-off approach to their space, which has faced turmoil in recent years.

After years of big funding rounds, high-profile deals, and flashy IPOs, the startup environment has been much more rocky recently. There are many reasons for that — high interest rates, an uncertain economy, the market being somewhat overvalued — but a Biden administration that took a hard line on M&A played a key role.

FTC commissioner Lina Khan’s attempt to block multiple deals has chilled the industry. Acquisitions are startups’ most viable exit opportunity with the IPO window largely closed.

The industry became somewhat stuck in place. Money tied up in startups couldn’t be reinvested, and employees working at young companies waited for a liquidity event.

Trump’s impact on the industry’s hottest segment — artificial intelligence — isn’t as clear.

The space is already evolving as some of the biggest companies in the world are picking sides and consolidating power with partnerships and investments in high-profile startups. That was evident last week with a report that Amazon was considering investing in Anthropic again.

The US is already investigating Microsoft and Nvidia over their AI dealings. Trump’s deregulation approach could free up the space.

But regulators launched investigations and filed lawsuits against Big Tech during Trump’s first term. The president-elect also has a complicated relationship with tech giants, even threatening to send Meta’s Mark Zuckerberg to jail. And Vice President-elect JD Vance previously said Khan is “doing a pretty good job” in her antitrust enforcement.

Musk has also had run-ins with Zuckerberg, Amazon’s Jeff Bezos, and OpenAI’s Sam Altman, and his AI startup, xAI, is looking to compete in the space.

And then there’s Trump’s immigration policy. The president-elect pledged to conduct mass deportations of undocumented immigrants. It’s unclear if and how he might reshape the legal immigration system that places high-skilled workers from outside the US in tech jobs, including those in AI.

News brief

Top headlines

3 things in markets

1. Who Trump is turning to on Wall Street for advice. Cantor Fitzgerald CEO Howard Lutnick is co-chair of Donald Trump’s transition team, and he’s looking to his Wall Street peers for help. Apollo CEO Marc Rowan, Blackstone CEO Steve Schwarzman, and Charles Schwab are reportedly some of the people lending their expertise to Lutnick.
2. Citadel Securities just poached a 20-year Microsoft vet. Herb Sutter is joining Ken Griffin’s market maker in a new tech leadership role. Sutter is an expert in C++, the coding language that underpins most of Citadel Securities’ technology.
3. Bitcoin’s big hopes for Trump 2.0. The self-described “crypto president” flipped from cynic to cheerleader during his campaign. Now that he’s headed back to the White House, crypto supporters hope for regulatory overhaul and an expanded mainstream role for the digital currency.

3 things in tech

1. Inside Tesla’s high-risk, high-reward compensation strategy. BI secured access to an internal Tesla salary database covering nearly 100,000 employees as of December 2021. The data reveals Elon Musk’s pay strategy: Lower salaries, bigger stock grants.
2. How Reddit went mainstream. Not long ago, Reddit wasn’t for everyone. It was a dark, weird little corner that prided itself on free speech but could quickly get ugly for users. Today, Reddit’s community-driven content attracts users who would rather rely on human input than AI. In that sense, it’s a bit like the new Google.
3. Behind Nvidia’s plans to build robot brains. Nvidia robotics executive Rev Lebaredian told BI about the chipmaker’s plans to tackle its newest frontier, bridging generative AI and physical robotics. The secret? Visualize the future, then build it.

3 things in business

1. The high cost-of-living has some Americans going overboard with saving. Plenty of people in the US live paycheck to paycheck, but a growing cohort is doing the opposite. Despite having solid finances, anxiety about high prices has them saving more than is recommended. Stockpiling cash could ultimately cost them as they miss out on investment gains.
2. Don’t poll the election; bet on it. In the weeks leading up to his victory, polls showed a virtual tie between Donald Trump and Kamala Harris. Yet prediction markets showed a solid Trump lead, proving what proponents have long argued: they can be more accurate than traditional polling. Prediction markets’ biggest cheerleaders explained why.
3. Economists say Trump will give Americans the very thing they voted against. High prices helped Trump get elected. Experts say his proposals of lower taxes, higher tariffs, and mass deportations will be inflationary. It could also make the Fed’s recent rate-cut relief painfully short-lived if it’s forced to hike rates again in response.

What’s happening today

• It’s Veterans Day. The nation’s largest commemorative parade takes place in New York City.
• The World Meteorological Organization releases the “State of the Climate” update at the UN’s climate-change summit in Azerbaijan.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Hallam Bullock, senior editor, in London. Ella Hopkins, associate editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.