Microsoft’s Brad Smith Sees Trump Boost to Data Centers, AI

In an interview, Microsoft’s president said he is optimistic the company can benefit from the Trump administration’s tech policies, including easier permitting for data centers and more energy production to power them.

As Republicans sweeping to power in Washington call for bringing the great tech powers to heel, one of those big companies has mostly escaped their wrath: Microsoft. Brad Smith, the company’s president and main liaison to Washington, is trying to keep it that way.

In the months before Donald Trump’s reelection, Microsoft staffers were in steady contact with his campaign and the Republican National Committee, providing tech support for the RNC’s convention and cybersecurity assistance when Iranian hackers targeted Trump’s campaign in August, Smith said in an interview. Now Microsoft is “optimistic about the number of opportunities” that will be available after Trump takes office in January, Smith said.

Those include a lighter touch on regulations regarding the sales of artificial intelligence tools and the possibility of using AI to make government agencies run more efficiently.

Smith said Microsoft is also looking to North Dakota Gov. Doug Burgum—Trump’s pick for Secretary of the Interior and a former Microsoft executive—to speed the development of AI data centers. Smith anticipates Burgum will make it easier for companies to get permits for such projects and will also encourage more energy production in the U.S. In the past, Burgum has advocated for increased natural gas drilling in the U.S. and for the development of a $100 billion data center in North Dakota.

Smith said Microsoft estimates AI may account for 15% of the growth in electricity demand between now and 2030. “The country needs more electricity,” he said. “Right now permitting is one of the bottlenecks, not just for AI and electricity, but for many things.…We know Doug well, and we’ve worked with him as governor of North Dakota.”

Smith declined to comment on whether he or Microsoft CEO Satya Nadella have spoken to Trump since the election.

Microsoft has some advantages over its best-known peers—Google, Apple, Meta Platforms and Amazon—in terms of its relations in Washington. It’s the only one of that group that federal antitrust enforcers are not currently suing. Its main businesses of software and cloud services have largely kept it away from the fiery debates over speech and content moderation that have engulfed Google and Meta.

During the first Trump administration, Microsoft seemed to benefit from Trump’s disfavor toward Amazon, beating it out for a $10 billion cloud computing contract with the Pentagon. Amazon later sued, saying the decision was motivated by Trump’s disdain for Jeff Bezos, then Amazon’s CEO, and the newspaper he owns, The Washington Post. (The Department of Defense eventually shelved that deal in favor of a new one with multiple companies.)

It also doesn’t hurt that Microsoft has the benefit of its own antitrust battle scars from the 1990s and early 2000s. Smith helped resolve those conflicts and spent much of the past two decades working to rehabilitate Microsoft’s image with governments around the world.

Still, Smith and some of Microsoft’s other prominent executives aren’t known as Republicans. Smith has mostly supported Democrats through political contributions in recent years, donating nearly $600,000 to political action committees supporting Kamala Harris’ candidacy for president as well as the Democratic National Committee in the past year, according to public records.

Smith has also donated smaller sums to several Republican lawmakers and has said he does not identify as a member of either political party. He has proved adept at working with both Democratic and Republican administrations in the past.

In the interview, Smith declined to discuss the role of another prominent tech figure, Elon Musk, in the new Trump administration. Musk, one of Trump’s biggest donors, is helping to lead a new government efficiency commission. He recently joined Trump on a phone call with the CEO of Google, as The Information reported this week.

In his new position of political influence, Musk could be a potential antagonist toward Microsoft. Last week, he added the company as a defendant in his lawsuit against OpenAI, accusing Microsoft of forming a monopoly with OpenAI to prevent competition. Smith, though, had nothing but positive things to say about Musk.

“When the history of innovation in the 21st century is written, there is no doubt in my mind that Elon Musk will have one of the longest and more most important chapters written about him,” Smith said.

Avoiding Political Lines

Smith won’t be the only Republican whisperer at Microsoft in the coming years. Microsoft lobbyist Frank Cavaliere, who has previously overseen the company’s lobbying of Republican senators, is now set to lead its outreach to all Congressional Republicans and some White House officials.

In recent years, Cavaliere has met frequently with Republican senator John Thune, who will serve as the next Senate majority leader, to lobby for new laws that would regulate AI, according to lobbying disclosures and people familiar with the meetings. Cavaliere’s connection to Thune dates back to his days as a staffer for Republican Senator George Allen from 2000 to 2005, when Allen served alongside Thune on several Senate committees.

Fred Humphries, the company’s most senior lobbyist in Washington, oversees all of the company’s activity in the capital. But Humphries is a longtime Democrat who lacks as many connections to Republican lawmakers and incoming administration officials. Microsoft has also recently brought in newer Republican lobbyists, including Robert Blair, who served in the first Trump White House.

Microsoft will be keenly awaiting Trump’s pick for chair of the Federal Trade Commission. Some inside the company are optimistic that whoever he chooses will be less militant about blocking acquisitions and scrutinizing other partnerships than the agency’s current chair, Lina Khan.

Khan has been looking at Microsoft’s ties to OpenAI. Microsoft expects Khan’s replacement to be confirmed as early as the first quarter of 2025, according to someone familiar with the company’s thinking.

Some members of Trump’s administration could advocate keeping Khan, including Vice President-elect J.D. Vance and attorney general nominee Matt Gaetz, both of whom have praised her. Some within Microsoft are optimistic that Trump will want to replace Khan with someone friendlier to tech deals, according to current lobbying staff.

Smith said the company does not plan on lobbying Trump on who should lead the agency. Smith declined to comment on Gaetz’s appointment.

Microsoft is also likely to press the Department of Justice to continue pushing for a breakup of Google after it won an antitrust case involving the company’s search monopoly. The DOJ on Wednesday asked a judge to force Google to sell Chrome, ensuring that the breakup goes through could be more of an uphill battle. But in the past, Trump has said he doesn’t support breaking up Google because “China is afraid of Google,” although he would make sure Google’s behavior is “more fair.”

Still, dealing with the Trump administration isn’t likely to be entirely smooth sailing for Microsoft. Trump on Monday announced that Federal Communications Commissioner and big tech critic Brendan Carr will be his nominee to lead the agency.

A day earlier, Carr had sent a letter to Microsoft, Google, Meta and Apple that claimed the companies had “participated in a censorship cartel” to deprioritize conservative news outlets in their services. In Microsoft’s case, Carr accused the company of relying on news rankings from the NewsGuard service to inform its Bing search engine results. (Smith didn’t have a direct response to Carr’s letter but said Microsoft has “a rock-solid commitment to fostering free expression.”)

Smith believes Microsoft’s AI products can help with Trump’s push to cut government spending. Musk and Vivek Ramaswamy expressed similar sentiments  in a Wall Street Journal op-ed on Wednesday. In it, they said they want to use advanced technology to slash government waste in their posts at the commission they will co-lead, known as the Department of Government Efficiency.

“AI is probably one of the most helpful tools available to make government more efficient and less costly,” Smith said. “We could use a Manhattan Project just to put technology to more effective work to improve government across the board.”

Microsoft also plans to advocate for relatively lax restrictions on AI in the coming years. Firms like Anthropic and OpenAI have pushed for laws that would require companies to receive government licenses before they release open-source models, while companies like Meta—which developed the popular open-source Llama models—have argued against such licenses.

Smith said Microsoft, which offers Llama and other open-source models on Azure, leans toward the more laissez-faire approach. Unlike OpenAI, Smith doesn’t see the need for government licenses for open source AI.

“We need a regulatory environment that enables open-source model development to proceed quickly and easily, and that may mean that it should require no license at all,” Smith said. “You don’t need a license today to create an open-source AI model, and things seem to be going well the way they are.”