Chartbook 410: Malign coincidence - MAGA & the moment of hyperscaling.

The engagement of big tech with the Trump Presidency has been one of the big surprises of the second term. To explain the gaggles of fawning tech moguls that gather around Trump in Washington or on his trips to the UK and the Gulf, one could search around for motives at the level of ideology or individual greed. But those motivations are weak compared to the staggering momentum of technical change and capital accumulation expressed in the phrase hyperscaling - the giant, trillion-dollar build-out of AI.

Both MAGA and the hyperscalers are in the mode of “If not now, when?” and “If not now, never!” A malign coincidence of technological and industrial imperatives with political momentum has created a powerful alliance of convenience, in which both partners are racing to shape the future over the time horizon of Trump’s second term.

Tech’s alignment with Trump is posed as a puzzle because Silicon Valley’s previous reputation was liberal. It was always a mistake to think of this as something inherent, having to do with tech’s virtue, or Apple’s good looks. The alignment actually had more prosaic origins in the politics of the American West Coast, the sociology and culture of the tech workforce and the attitudes of the most influential customer groups. But prosaic though it may have been, the alignment was real.

In recent years, the politics of the tech eco-system in a broader sense have pivoted.

In diagnosing this shift, it is important not to conflate the different facets of the Californian tech-business eco system.

I’ve written about Elon Musk, MAGA and Trumpite-futurism in Chartbook before.

The smaller tech players like Palantir and VC like Andreessen can be understood through the micro climate of industrial and ideological interests in the lower tiers of Silicon Valley. Palantir’s overvaluation is an incredible artefact of our times. I’ve written about the Vance-Andreessen connection back in 2024.

Neither of those sub cultures should be confused with the “hyperscalers” who are now chasing dominance in AI. These are not one-man bands. Alphabet, Amazon, Microsoft and Meta, backed up by Nvidia on the hardware side, are corporate tech giants that have no peers anywhere in the world. The technological sophistication, physical and financial scale and the urgency are spectacular.

I will come back to the more straight forwardly economic and technical dimensions and on the pod in future posts. Zuckerberg’s casual comment here about “mispending a couple hundred billion dollars” (sic) is indicative of the mood.

It is the sheer scale that business headlines of 2025. America’s leading tech firms are pouring unprecedented amounts of money into building AI capacity.

Source: FT

As the Economist points out, we are witnessing one of the largest investment booms in the history of capitalism.

Source: Economist

It is the only investment boom that we have seen in the West that rivals the scale of capital investment that has propelled Chinese growth.

The pundits insist that in its cultural and social consequences, AI will be a shock at least as larger as earlier general purpose technologies and perhaps more akin to the cultural technology of the printing press. Cameron Abadi and I started a mini series on AI on the podcast last week to address these questions.

Those who are deep in the AI game go back and forth on who will eventually emerge as the dominant players. Will it be incumbent giants offering AI utilities? Or will it be the upstarts? But right now, the sheer compelling force of the huge investment surge in compute power and the teams building and training the algorithms, creates its own technological, commercial and political imperatives.

Of course there are tensions and contradictions with Trump. How could there not be given that his policy preferences are driven by fairy tales, whims and vanities.

In practical terms the most important tension may be over electric power. Trump’s pivot against renewables makes no sense from a business or tech point of view. But rather than fundamentally obstructing the AI push its most likely impact is to raise costs at the margin. Don’t bet on the hyperscalers allowing the lack of windmills to get in their way.

On the other hand, Trump is imaginative and not hung up on the ideological partition of the world that overshadowed policy under Biden. For AI Trump has opened the door in the Gulf. There is plenty of energy there.

In any case, for the hyperscalers these are details. The key thing is to ensure that the political system, the administrative state and the courts do not attack or obstruct the technology or the businesses themselves.

In this regard the crucial thing about Trump is that he is up for grabs. He likes big stories and big numbers. He has few deep inner convictions. He certainly has no attachment to liberal norms around the meaningfulness of conventional culture, high culture etc. He can clearly be bought, if not through financial favors then through obsequiousness and the promise of good news.

Having to pander to Trump’s White House may be embarrassing. But if so - and who knows, even oligarchs crave the limelight of the Oval Office - it is a small price to pay.

The hyperscalers are convinced that they are involved in making a truly epic, transformative leap. They have plenty of internal financial resources. If they need more, money will pour in. What they need most, given the extreme urgency of their competition, is for Washington not to get in their way.

The current conjuncture is thus defined by a truly malign coincidence of historical and temporal imaginaries.

As far as the political and cultural institutions of the United States are concerned, Trump’s second-term team are playing for keeps. The Trump gang are fighting day by day to consolidate their rule over the long haul. They have a succession plan with Vance and a long-term political, institutional and cultural project. In their interactions with businesses, universities etc the message is: “You may not like this, but shut up and knuckle down. Find a modus vivendi. This is the new dispensation. We are the future.”

The more they build momentum, the more intimidating aggression they deploy, the more solidly they cow the opposition and establish the credibility of this new reality.

This long-term project of MAGA transformation is loudly supported by ideological cheerleaders like Palantir. But they are the running dogs. It is the big beasts that matter.

The MAGA dismantling of the US state, the erratic trade policy, the blows to migration regimes like the H1B visas, face no serious resistance from the most powerful business and technological force in the world right now - the hyperscalers - because they too are running against the clock. Conventional medium-term worries, the risk of institutional failure, or declensionist stories of America’s dark future are irrelevant, because the entire future is being decided NOW. Between the “fierce urgency of now” and dramatic vistas of the rest of time, the middle-ground of the medium-term future is emptied out.

The hyperscalers don’t care about anything five years hence because they believe that our collective destiny is being decided in the current moment by the manic accumulation of compute power and AI algorithms. Their clock is running not on decades but on months and quarters. The big tech firms never cared much for existing rules, regulations or laws. They care even less right now because they are racing towards a radically new future, which is just around the corner.

It is a dizzying inversion of the normal cliches.

How many times have we heard that the problem of democracy is that the political timeline is too short, that politicians only think as far ahead as the next election and that “patient capital” needs longer to effect more fundamental transformations?

In America in the current moment, the really big guns of capital are anything but patient. The future will be decided the day after tomorrow. So, radical impatience is the name of the game. Driven by the momentum of the technology itself, and by the rampant competition between business and technological groups and perhaps also overshadowed by the opaque threat from China - remember deepseek - they have no time for anything but build, build, build.

There is a disastrous overlap between the timeline of AI-capital and the political calendar. The hyperscalers and MAGA zealots may not share much on substance. They don’t have to. But they agree on one thing: the long-term future will be defined between now and 2028.

For neither of them is this mere talk. MAGA are assaulting the institutional fabric of America, just as the leading tech firms are placing a giant, trillion dollar bet.

I call this a malign coincidence, emphasizing contingency, because I don’t think MAGA and hyperscaling are mutually determining. They don’t in a deep, organic sense need each other. It is an alliance of convenience.

Sometime, perhaps around 2023, the tech firms realized the scale of what they were facing. They were going to build the future in the next few years. They had gripes about Biden. But the main thing was that the outcome of the election in 2024 was highly uncertain. This uncertainty put the extreme urgency of their investment timeline at risk. So they hedged, opening to MAGA and the right.

As it turns out, it is convenient for the hyperscalers to have an administration that has few of its own ideas as far as industrial policy is concerned, no commitment to anti-trust and a positive lust for tax giveaways. Of course, Trump likes to haggle and to hand out favors. He likes to make deals. Tech can live with that. For the rest it can be fobbed off with a little bit of obsequiousness and gestures of compliance and enthusiasm. The ideological trim can be left to the likes of Palantir.

Likewise it is convenient for the Trump administration not because hyperscaling fits into some grand, global industrial strategy. That was more Biden’s style. What hyperscaling delivers for the Trump administration is the boom-time mood that Trump craves. The financial market and business narrative of “American exceptionalism” that had been running so strongly over the winter of 2024-2025 took a big hit earlier in the year under the impact of DOGE and the tariffs of “Liberation Day”.

The forward momentum of hyperscaling brings back the good times. It keeps the White House happy and it spreads a general mood of complacency as the MAGA team get to work on the institutional demolition.

If for the tech titans AI is an obsession, for the rest of American business it acts more as a distraction and a bromide. As Gillian Tett puts it:

A host of executives and investors seem to love Trump’s policies on AI, most notably because he is deregulating it under the mantra of boosting growth — an idea that appeals to American executives increasingly scornful of what they see as Europe’s low-growth, regulation-heavy model. However, there is another implication of the AI boom: it is enabling CEOs to talk to their investors about business uncertainty without ever needing to mention Trump’s name at all. More bluntly, AI is the ultimate distraction device for the C-suite, since it is now absorbing so much executive headspace and public airtime that there is less space to think about other issues, such as the uglier side of Trump’s policies. It gobbles up bandwidth, literally and metaphorically.

In this way the alliance of convenience around AI takes on a broader significance in insulating the MAGA political assault from elite criticism.

Right now this is a self-sustaining hegemonic push. But this should not obscure the fact that both the AI boom and the MAGA offensives are hedged with risks. The midterms may go badly. The Vance succession may blow up. They may really screw up.

Likewise Zuckerberg’s insouciance about a few hundred billion here or there may come back to haunt him. What if the hyperscaling is hype? What if a new deepseek threat materializes?

Since there are two partners in the hyperscaling MAGA alliance and each faces profound uncertain, at a first approximation we might map future scenarios in terms of a 2*2:

I’m not going to put labels in those four boxes yet and even thinking about doing so raises new questions. For instance, how sustainable is the alliance of convenience if MAGA prevails and AI delivers the breakthroughs it promises? Or what does a putative Democratic party comeback look like amidst the wreckage of a deflated AI boom?

In any case, the combinations may provide a useful framework for thinking about the future. If we take both MAGA and the hyperscalers at face value, we won’t have to hold our breath for long. These options may begin to congeal as soon as 2026.

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This train of thought was prompted by a fascinating and disturbing conversation with Grey, Jeremy, Qing, Stefan and Ted. With thanks for their friendship and comradeship.

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