Tariffs Cast Shadow Over Big Tech's AI Ambitions

U.S. President Donald Trump's reciprocal tariffs on technology equipment may hinder AI infrastructure expansion by major tech companies like Oracle and SoftBank. Analysts express concern over potential shifts in capital expenditure and delays in data-center projects as costs rise, altering AI development plans in the U.S.

In a controversial move, U.S. President Donald Trump has introduced sweeping tariffs that threaten to disrupt major tech firms' billion-dollar investments in artificial intelligence infrastructure. Analysts warned that these tariffs could derail the administration's ambitious goals for AI development.

Trump's new tariffs impose steep duties on technology equipment suppliers, with rates reaching 34% for China and substantial percentages for Taiwan and South Korea. These tariffs cover a wide range of electronic imports, leading to potential reallocations in capital expenditure among major players like Oracle and SoftBank.

The tech industry faces significant uncertainties as data-center costs rise. Analysts, such as Abhishek Singh from Everest Group, predict a shift in strategy among tech giants. Meanwhile, plans like the Stargate project—designed to position the U.S. as a leader in AI—may face delays and require reevaluation amid tightening economic conditions.

(With inputs from agencies.)