Ben Smith on Trump, Anthropic & the Collision of Government and Big Tech

**Eric Newcomer** (0:00)
He bet big on BuzzFeed News and built one of the defining newsrooms of the social media era, until that whole model collapsed.

**Ben Smith** (0:06)
Only to plummet to trade lower by about 8%.

**Eric Newcomer** (0:09)
Now he's making a new wager, small, premium and direct to your inbox. As co-founder and editor-in-chief of Semafor, Ben Smith is betting that newsletters and live events beat chasing viral traffic. And, well, I sure hope so. So subscribe to Newcomer Substack, and stay tuned to the Scrooge Valley Summit live in London. This is the Newcomer Podcast.
This collision of the Trump administration and Anthropic, what is this sort of DC view of Anthropic and the AI world's collision with the Trump administration?

**Ben Smith** (0:50)
That's it, I mean, A, what an incredible and insane story. B, I think just to pull it back, I think in the biggest picture, maybe the biggest story of the United States right now, and I think it's one that really begins in the Biden administration is the very, very intense involvement of the United States government in the private sector. It's just, the CEOs of big American companies, big global companies would never go to Washington in the 1990s and the 2000s because you didn't have any customers there and you didn't want to be on regulators' radar.
And now, and starting in part with the kind of return of industrial policy with the IRA and other Biden initiatives, there's suddenly a sense of like, wow, the US government can pour money into my business if I do some combination of making a good case and kissing the red asses and donating the right politics.

**Eric Newcomer** (1:37)
In my mind, the biggest move the Biden administration did here was failing to have Elon Musk come when they're hyping up the election of auto industry. So, I mean, it looms large in that they were trying to showcase some American companies, but the biggest effect was getting Elon very angry that he wasn't part of that showcase.

**Ben Smith** (1:58)
Yeah, but in some sense, that is like a butterfly that flaps its wings. But it's also if you just sort of step back and look at it objectively, you'll see that it's a little bit more of an eye-opener of how totally political. I mean, like, shocker, Washington is very political. But, you know, Biden did not say, we want the most ambitious and forward-looking and successful American audio companies. We want it, he said, we want the ones that are aligned with my political coalition, which is to say the UAW. And so, you know, that is just, that is how politics in fact works. I mean, Trump has obviously taken it to a totally different level and place, both in a philosophy of, I mean, philosophy is a strong word, a style of government that, you kind of feel races to sanctuaries between public and private, and the government is taking stakes in companies in ways that are, I think some people believe strategic, like Intel, like the US really ought to have a domestic ship manufacturing business, even if as a senior government official said to me the other day, it is a garbage fire, because to hedge against the risk from China, like, there's obviously an argument.

**Eric Newcomer** (2:56)
The Intel situation, basically, we, the US government gave them money, not contingent on equity, and then it was sort of like, we gave you all this money, now you should give us equity.

**Ben Smith** (3:06)
I think that there was a conversation that had begun around a grant and the Trump administration said, no, we want equity. You know, there's precedent for that during the auto bailout, the Obama administration was getting paid back, and you'd like for investment from propping up the carmakers. But Trump administration is a different idea, though. I think they like the idea of having US companies on the US government's balance sheets, so the US government can help them. They don't mind picking winners and losers. And then, of course, the Trump family is also in parallel monetizing the presidency and making lots of money, and their friends, you know, across different industries find ways to make plenty of them. I think the Trump family doesn't mostly love their friends trading on the name. They like the Trump family businesses are doing amazing. Occasionally really close allies, like they let the Ellison family put that UFC match on pay-per-view on Paramount Plus to drive some conversions, I guess, for them.
But so there's a sort of blending of public and private, and also an impulse that the US government should be involved in deals. They're going to do a deal with Japan for $500 million in investment, and Howard Lutnick and Trump are going to, with the Japanese, pick where they're investing. That's the idea of that deal. A lot of it is quite happening, but there is just an involvement of the US government in the private sector with no philosophical overlay connected to the free market that we used to have.