Tariffs Threaten AI's Growth: Tech Giants Reassess

U.S. President Trump's new tariffs on tech equipment challenge AI infrastructure development, impacting companies like Oracle and SoftBank. Analysts predict increased costs and delayed AI projects, with leading tech firms reconsidering their capital expenditures and data-center expansion plans under the economic pressure of these tariffs.

President Donald Trump's administration's imposition of sweeping reciprocal tariffs could hinder Big Tech's ability to build artificial intelligence (AI) infrastructure within the U.S., according to analysts on Thursday. Top technology companies, including Oracle and SoftBank, face significant obstacles to their AI investment plans since Trump's return to the White House.

On Wednesday, the administration implemented hefty tariffs on key technology equipment from suppliers such as China, Taiwan, and South Korea. Electronics, a major import category, faces an overall 10% tariff, threatening a sector that imported goods worth nearly $486 billion last year, according to Census Bureau data.

While data processing machines will be heavily affected, projected at $200 billion in imports for 2024 from countries like Mexico and Taiwan, semiconductors are currently exempt. However, targeted tariffs on chips may follow. These developments have already affected stock prices of companies like Nvidia and AMD, signaling challenging times ahead for AI infrastructure investment.

(With inputs from agencies.)