Will technology giants Google, Amazon, Openai, Microsoft, Alphabet suffer from tariff war threatening us AI BOOM? How will it benefit India?
Stocks of tech giants are already expensive (Microsoft -2.4%, Amazon -9%, letters -4%). Not only are the company’s stock prices falling in the stock market, but their business should also be shaken.
Artificial Intelligence (AI)
Will Donald Trump’s reciprocal tariff policies and subsequent trade wars hurt American companies working in the field of artificial intelligence? Will tech giants like Google, Amazon, Microsoft and Nvidia, as well as startups such as Openai, Anthropic and Cohere be hit by the whimsical attacks of the U.S. president? Stocks of these companies are already expensive (Microsoft -2.4%, Amazon -9%, letters -4%). Not only will the company’s share price fall in the stock market, but their business should shake with chips and other components, which will become more expensive to maintain the infrastructure of the data center and to train AI.
Will American tech giants suffer?
Imports from China (145%), Taiwan (32%) and South Korea (25%) attract large-scale tariffs, and tech companies dealing with AI are most likely to suffer the most losses. As U.S. technology companies rely heavily on these Asian countries for hardware, such as graphics processing units or GPUs, servers and cooling systems, their input costs will soar. It can be understood with one example that if imported from China, a $100 million server may now cost $2.45 million.
Do AI raw materials cost more?
Making raw materials for data centers such as steel, aluminum and copper could attract at least 25% tariffs from imports anywhere, forgetting China and driving costs. This could delay ambitious projects, such as the $500 billion Stargate data center joint venture involving OpenAI, Softbank and Oracle.
Will reciprocity tariffs damage supply chains?
Since global supply chains are most likely to be damaged by tariff wars, and most data processors are worth $200 billion, all from Mexico, Taiwan, China and Vietnam, it is bound to destroy AI Applecart. The U.S. tech giants will bear the additional burden as Beijing has retaliatory tariffs as high as 125% and banned blanket bans on exports such as rare earth minerals needed to make chips, such as lithium batteries.
Microsoft, Amazon, Amphabet receiver?
Cloud services powered by American tech giants such as Microsoft, Amazon and Alphabet will be valued for increased operating costs. Due to the high costs, AI startups may have to suffer the most. Therefore, this could widen the gap between large and well-funded companies and smaller players.
Will raising tariffs increase US manufacturing?
But, it can be argued that the increased tariffs could boost U.S. manufacturing. Understandably, Intel’s Ohio chip facilities and HPE’s Texas server plants are most likely to cut their dependence on foreign hardware. Similarly, Apple, TSMC and Micron have announced that they will invest in semiconductor production facilities in the United States.
But as Beijing isolates its domestic AI ecosystem from the outside, undeniable tariffs could undermine our AI competitiveness with China. It proves its strength through the success of DeepSeek.
How will the tariff war affect India’s AI dream?
In this case, India may benefit as technology companies may diversify supply chains to mitigate the tariff impact. This shift can also enhance innovation in AI models, thereby reducing reliance on specific hardware. New Delhi may also take advantage of the opportunity of the semiconductor industry, which has recently tried. Although the chips are partially tax-free, most of the chips are exported to the United States as tariff products such as servers.
