There was plenty of news adjacent to the new administration that came out of this year’s CES last month (to wit: tariffs mean laptop prices are going to go up 68% and supply chains are about to get even more gnarly). But there hasn’t been as much mention of what is likely to be the biggest difference in the tech arena we’ll see this year.
A much friendlier regulation tone is likely here for tech, especially tech we can call for now “Little Tech.”
Influencers like Marc Andreessen and Ben Horowitz of the high-flying venture investor A16z look to have the largest voices. And, of course, we have already seen what is happening with Elon Musk, who owns a small media entity formerly known as Twitter (X is currently valued at $9 billion, down from the $44 billion he spent to buy it).
In fact, Andreessen and Horowitz of A16z penned a manifesto, I mean opinion piece, they called the Little Tech Agenda. They wrote:
“…Little Tech is our term for tech startups, as contrasted to Big Tech incumbents. … Little Tech has run independent of politics for our entire careers. But, as the old Soviet joke goes, ‘You may not be interested in politics, but politics is interested in you.’
We believe bad government policies are now the #1 threat to Little Tech.
We believe American technology supremacy, and the critical role that Little Tech startups play in ensuring that supremacy, is a first class political issue on par with any other.
The time has come to stand up for Little Tech.”
There is a high and growing likelihood that this kind of thinking, these kinds of believers, will have an outsized influence on the policies of the present administration. Especially when you consider that Gail Slater, the onetime aide to Vice President J.D. Vance (venture investor Peter Thiel’s contribution to the administration), is poised to take over the Department of Justice’s antitrust division assuming that she wins Congressional approval. Slater is widely expected to continue the department’s direction when it comes to some of the established incumbent players, including cases brought during Trump’s first term. Trump himself took to his own Little Tech platform, Truth Social, to declare that “Big Tech has run wild for years, stifling competition in our most innovative sector and, as we all know, using its market power to crack down on the rights of so many Americans, as well as those of Little Tech!”
If all this comes true, and it’s looking very likely, smaller competitors, especially in AI, will be advantaged at least through policy moves in the new administration.
But as the smaller players might get coddled more than ever, it’s important to state that the larger companies make claims about scale being critical to the state of tech. When it comes to AI for instance, there is evidence that the quantum breakthroughs in LLMs are a direct result of scale—in investment and in ability to build out models across larger audiences.
And here’s the other thing: the larger incumbents make a lot about Little Tech possible. Without them, there would be a lot less Little Tech anywhere, and a whole lot less innovation and incentive to create new Little Tech everywhere. Many of the beneficial attributes assigned to the smaller tech companies flow from what the larger companies do. They train talent which leads to the very new, smaller companies that A16z and others can invest in—companies such as Inflection AI, Adept AI Labs, Cohere, Perplexity.AI and even Instagram, Twitter and Pinterest back in the day.
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The larger legacy players create the very tools that enable the growth of Little Tech—and the profits made by those who are early investors in them. At relatively low entry costs for startups, larger firms put infrastructure and platforms out there—like cloud servers and AI models. New companies can take advantage of them for starting and growing, which means scale barriers to entry have diminished or even disappeared. The proliferation of ad tech companies alone shows it’s never been easier to start a company—with big companies offering cloud computing, productivity tools, communication services, customer acquisition, advertising, fulfillment, and consumer support. Would all that be happening for startups if larger firms weren’t there creating the backbone?
Over time, some of the newer companies will actually create competition for the larger tech companies in areas like search or social media. And many of those Little Tech Companies then will go on, as they have in the past, to become much bigger tech companies, and fast. Perplexity for example was most recently valued at $9 billion, tripling its value from even a few months before.
It’s important not to lose sight of the dynamics of the competitive field in the US, which allow for the kind of mutually beneficial interaction of small, medium and large firms, with a special and unique environment that creates fertile ground for the recent unprecedented rise in unicorn startups that have recently flourished, like OpenAI, with fast-growing consumer applications and a soaring valuation. As of 2024, the world had more than 1400 unicorns and 72 decacorns, over half founded in the United States.
China is of course the biggest competitor, as DeepSeek’s recent AI and financial markets disruption brought to the fore. Meanwhile, European regulators seem to spend a great deal of energy simply trying to bite away at the American companies that are in the lead. The AI research papers that are cited the most come from the Chinese Academy of Sciences, according to Georgetown University’s Center for Security and Emerging Technologies (with Google second), and yet in third place is China’s Tsinghua University, then Stanford and MIT. Even President Trump recently observed that “China is afraid of Google.”
The reality is that tech of all sizes, and tech at scale, has made this country the world’s leader. As Mark Cuban was quoted by Joseph Zeballos-Roig as having told a Kaiser Family Foundation luncheon back in October: “By trying to break up the biggest tech companies, you risk our ability to be the best in artificial intelligence. AI is a zero-sum game we cannot afford to lose.”
So, forget the Big Tech VERSUS Little Tech frame. What we really need is an administration that enables all tech and innovation, not one that singles out a few companies for preferential treatment.