Trump boosters expect big returns on their investments: ‘The shackles are off’
LIMIT the reach of federal regulations on artificial intelligence (AI).
Make room for cryptocurrencies to thrive.
Ease the antitrust crackdown on big tech companies.
Buy more military drones.
And don’t raise taxes on billionaires.
The to-do list for President-elect Donald Trump from Marc Andreessen, the venture capital billionaire from California, is long but quite specific.
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Now, after donating big money to Trump, Andreessen is eager to see his candidate work through the list.
“It felt like a boot off the throat,” Andreessen said about Trump’s victory during a podcast conversation this month with his business partner. “Every morning, I wake up happier than the day before.”
Andreessen’s excitement is a hint of just how broadly the victory by Trump has resonated with business executives who invested millions of dollars in his candidacy and now stand to profit from his policies.
Theirs is a circle of deep-pocketed industry winners that extends far beyond Elon Musk. It is a more diverse group, at least in terms of business interests, than the one that surrounded Trump in his first administration, where executives from the oil, gas and coal industries were particularly dominant.
Harold Hamm, the billionaire founder of the Oklahoma-based oil and gas giant Continental Resources, is still in a position to benefit from regulatory rollbacks that he and an affiliated trade association are already pushing.
But the list also includes: Joe Lonsdale, a defence technology executive who wants to help the Pentagon revamp the way it fights wars; Cameron and Tyler Winklevoss, the twins who were known for their battle with Facebook, then became cryptocurrency investors and now want to shape the industry’s rules; Brian Evans, the CEO of Geo Group, the private prison giant that could benefit if Trump carries out his promise of large-scale deportations; John Paulson, the hedge fund billionaire who could cash out of his investment in the federal government’s housing finance companies, Freddie and Fannie, if they are privatised under Trump.
“It will be a billionaires’ ball,” said Robert Reich, who served as secretary of labour during the Clinton administration and has long been critical of the income disparity in the United States.
A spokesperson for Trump’s transition team did not respond to a request for comment.
Andreessen, who donated at least US$4.5 million to a super political action committee (PAC) named Right for America that supported Trump, illustrates the alignment of corporate and political agendas.
For more than a year now, Andreessen, who was a big Democratic fundraiser during Al Gore’s presidential campaign, has made his frustration clear with many Biden administration policies that affect his tech-sector investments.
Perhaps most fundamentally, Andreessen believes that Biden-era regulators, in their zeal to fight dominant tech giants, have complicated the ability of startup companies to return profits to their investors by selling off their growing businesses to larger tech companies.
“Bad government policies are now the #1 threat to Little Tech,” Andreessen wrote on Substack in July, adding later in the post, “Regulatory agencies have been green lit to use brute force investigations, prosecutions, intimidation, and threats to hobble new industries.”
Andreessen and his firm, Andreessen Horowitz, declined requests to comment.
Death of Biden-era rules
Andreessen, whose venture capital firm has invested billions of dollars in startups that specialise in AI tools, also criticised President Joe Biden’s executive order late last year that requires companies to file reports to the government about risks that their AI systems could help countries or terrorists make weapons of mass destruction.
Trump, at a rally late last year, vowed to “cancel Biden’s artificial intelligence executive order”. That led Andreessen, after Trump’s victory this month, to indicate that the Biden-era rules were effectively dead: “Stick a fork in it, it’s over.”
Andreessen, along with other billionaire backers of Trump’s re-election, including the Winklevosses and Howard Lutnick, a Wall Street financier, has separately pushed for the president-elect and newly elected members of Congress to use a light touch when it comes to regulating the cryptocurrency industry. They want regulators at the Securities and Exchange Commission (SEC) and elsewhere who will be more friendly to the sector. (Lutnick is also a chair of Trump’s transition team.)
“The shackles are off,” Tyler Winklevoss wrote on the social platform X recently.
The price of bitcoin has already surged to record levels in the aftermath of Trump’s election. Even before he was elected, Trump had promised to embrace a pro-crypto agenda, including removing Gary Gensler, who as head of the SEC has repeatedly used the agency’s enforcement powers to crack down on crypto companies.
“On Day 1, I will fire Gary Gensler,” Trump said in July at a cryptocurrency conference in Nashville, Tennessee.
More detention beds
Evans and George Zoley, the two top executives at Geo Group, the private prison company, made contributions directly to Trump’s campaign, to his super PAC and to other political groups that support him, and have said that they expect Trump’s re-election to drive up demand for empty beds at detention centres that the company runs for Immigration and Customs Enforcement.
Zoley has already profited handsomely from Trump’s reelection.
This summer, as the election was approaching, he spent more than US$3 million to buy up large chunks of the company’s own stock, or a total of 250,000 shares, federal filings show. The average price he paid for that stock: US$12.28. As at Friday, that stock was trading at US$26.85 as Geo Group saw the largest surge in its stock price since 2016, after Trump was elected to his first term. The bounce this month alone would generate a US$3.6 million profit for Zoley if sold at the new price.
The executives told Wall Street analysts during a recent earnings call that Trump’s election could help Geo Group fill as many as 18,000 empty beds at its facilities, which would generate as much as US$400 million in annual business.
Defence tech newcomers
Venture capital executives such as Lonsdale are also well positioned to profit. A founder of the AI-powered data analytics giant Palantir Technologies, he has more recently delivered billions of dollars to defence-sector startups such as Anduril and Epirus and Saronic.
Executives at these defence technology firms have been frustrated at the slow pace of the Pentagon’s shift away from traditional contractors such as Lockheed Martin to venture-capital-backed startups selling cutting-edge tools like AI-powered drones.
“Current regulatory regime still favours the legacy defence corporations and crowds out upstarts,” Lonsdale, who donated more than US$1 million to Trump’s affiliated political groups, said in an e-mail to The New York Times.
Hamm and his company, Continental Resources, donated more than US$4 million to political groups that supported Trump. Most of it came after Hamm and other oil industry executives attended an April dinner at Mar-a-Lago, Trump’s Florida residence and club, where he pressed the executives to contribute to his campaign, suggesting they would save far more than that in avoided taxes and legal fees after he repealed environmental regulations.
More recently, Hamm has been part of Trump’s transition team, which is pushing to eliminate a ban on new natural-gas export terminals and to abolish the Biden-era tax credit on electric vehicles – meaning more continued demand for oil and gas, as Reuters first reported last week.
“The mineral wealth of the US government is tremendous, but you have to develop that,” Hamm said in an interview last week with an industry trade publication Hart Energy. “Certainly, Trump will do that.” Hamm declined a request to comment.
Freddie and Fannie
Paulson could score big if the federal government’s housing finance companies, Freddie Mac and Fannie Mae, are privatised.
He and Bill Ackman of Pershing Square Holdings, another supporter of Trump’s, each purchased stakes in Fannie and Freddie, which the federal government spent US$187 billion to bail out in 2008.
There is no formal public accounting of just how many preferred shares Paulson still controls, and a spokesperson for Paulson declined to discuss the matter. Ackman’s investment in Fannie Mae common stock alone included 115.5 million shares, or 10 per cent of the total.
What is clear is that Freddie and Fannie stocks surged at least 140 per cent since Trump was elected, a hint of profits that could soon be secured if the privatisation goes ahead. Advisers and former aides to Trump have already predicted that the companies are likely to go private during his new term, although it might require bypassing approval by Congress.
Paulson declined requests to comment. In an interview with Bloomberg Television in September, he agreed the time had come for the federal government to unload Fannie and Freddie. “They are now in a position where they’re fairly well capitalised,” Paulson said, “which would make privatisation logical”.
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