President Donald Trump’s first year back in office proved transformative for the AI industry, with the sector dramatically outperforming broader markets despite economic turbulence across other business sectors. According to Morningstar data, a basket of 34 AI-related stocks including Amazon, Cisco, and Apple saw a remarkable 50.8% increase in share value during 2025, far exceeding the overall stock market’s 17.3% gain and the broader tech sector’s 21.4% rise.
The centerpiece of Trump’s AI agenda was the announcement of Stargate, a $500 billion AI infrastructure project unveiled within his first month in office. Led by OpenAI, Oracle, and SoftBank, Trump proclaimed it would be “the largest AI infrastructure project in history.” The administration positioned itself as a major booster of the tech industry, with Trump hosting notable visits from AI leaders including Nvidia CEO Jensen Huang.
Trump’s regulatory approach marked a sharp departure from his predecessor. He rescinded President Biden’s executive order that had established federal frameworks for AI safety and risk mitigation, replacing it with a new order designed to override state-level AI regulations. This deregulatory stance aligned with the administration’s broader pro-business approach to the technology sector.
The administration also brokered significant deals affecting AI hardware. The US allowed Nvidia to sell H200 chips to China under the condition that the government receives a cut of profits. Additionally, after publicly calling for Intel’s CEO resignation, Trump negotiated a deal giving the US nearly 10% equity in Intel, which subsequently saw its stock price rise.
However, concerns are mounting beneath the surface of the AI boom. Industry experts increasingly fear that an AI bubble burst could trigger a market crash similar to the dot-com collapse of the early 2000s. Trump himself has warned tech companies that data centers cannot drive up energy bills and contribute to affordability crises. Some tech analysts, including Dan Ives, cautioned that focusing on cost concerns could derail the AI momentum.
The AI sector’s success stood in stark contrast to other industries during Trump’s first year. Retail businesses struggled with tariff impacts, manufacturing jobs declined by over 70,000 since April, and the housing market remained challenging for first-time buyers. The divergence highlights how AI became a bright spot in an otherwise mixed economic landscape shaped by Trump’s trade policies and regulatory changes.
Key Quotes
the largest AI infrastructure project in history
President Trump described the $500 billion Stargate project led by OpenAI, Oracle, and SoftBank. This statement underscores the administration’s commitment to positioning the US as the global leader in AI infrastructure and development.
the focus on costs could derail the AI boom
Tech analyst Dan Ives warned about Trump’s concerns over data center energy costs. This quote highlights a critical tension between rapid AI expansion and practical infrastructure constraints that could slow the industry’s momentum.
Our Take
The 50% AI stock surge under Trump reveals a sector operating in its own economic reality, disconnected from broader market struggles. While retail, manufacturing, and housing faltered under tariff pressures, AI thrived through deregulation and massive capital commitments. This divergence is unsustainable long-term. The Stargate project and regulatory rollbacks create a high-risk, high-reward environment—either cementing US AI dominance or setting up a spectacular crash. The Biden-to-Trump regulatory whiplash particularly concerns me, as removing safety frameworks while pouring half a trillion dollars into infrastructure prioritizes speed over prudence. The energy cost warnings and bubble fears suggest even Trump recognizes the precariousness. We’re witnessing a classic boom cycle with government amplification. The question isn’t whether AI will transform society, but whether this acceleration happens responsibly or recklessly, and whether the inevitable correction comes as a soft landing or catastrophic crash.
Why This Matters
This story reveals critical dynamics shaping the future of AI development and regulation in the United States. The 50.8% surge in AI stocks demonstrates unprecedented investor confidence and capital flowing into the sector, which will accelerate AI research, development, and deployment across industries. Trump’s $500 billion Stargate project represents a massive government-backed commitment to AI infrastructure that could determine whether the US maintains technological leadership against China.
The regulatory rollback of Biden-era AI safety frameworks signals a fundamental shift toward industry self-regulation, with significant implications for AI ethics, safety standards, and risk management. This approach may accelerate innovation but raises questions about oversight of increasingly powerful AI systems. The growing concerns about an AI bubble are particularly significant—if experts’ fears materialize, a crash could devastate not just tech companies but the broader economy, given AI’s integration across sectors. Trump’s warning about energy costs also highlights a critical constraint on AI growth, as data centers consume enormous power. How the administration balances promoting AI innovation while managing infrastructure, energy, and bubble risks will shape the industry’s trajectory and America’s competitive position in the global AI race.
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Source: https://www.businessinsider.com/trump-first-year-back-office-mixed-bag-for-business-world-2026-1