U.S. President Donald Trump has announced plans to impose new tariffs on semiconductor chips, potentially affecting major companies in the artificial intelligence sector. This development comes as the industry grapples with the implications of rapid advancements in Physical AI and the potential for significant job displacement as AI technologies evolve.
In a recent interview, InvestorPlace’s Chief Content Creator Luis Hernandez spoke with renowned tech investor Luke Lango, who has a history of identifying transformative technology trends. Lango discussed the implications of the rapidly approaching Physical AI era, noting that this technology extends beyond chatbots and software to encompass humanoid robots and autonomous systems. Their conversation highlighted the urgency of understanding how quickly these changes could manifest in everyday life.
The discussion also touched upon the concept of a “robot stack,” which entails investing in the fundamental technologies that support the emergence of Physical AI. Lango suggested that we may already be witnessing the equivalent of a “ChatGPT moment” for Physical AI, where its impact on society could accelerate sooner than many anticipate.
The potential tariffs on semiconductors could complicate this landscape. Companies like Nvidia and AMD could face margin pressures and supply chain disruptions as these tariffs aim to bolster national security and economic reciprocity. Despite being U.S.-based, these firms rely heavily on overseas manufacturing, particularly from Taiwan Semiconductor Manufacturing Company. Should the tariffs target imported semiconductors, these companies might find themselves penalized for products they design in the U.S. but manufacture abroad.
Adding to the concerns, Mo Gawdat, former Chief Business Officer at Google X, stated that the current wave of AI could lead to the elimination of 20–30 million U.S. jobs by 2035. This unprecedented level of disruption, he argues, could fundamentally alter the job market, affecting positions from entry-level to executive roles. Gawdat emphasized that the belief that AI will create new jobs is misguided, asserting that many roles currently thought to require human intervention, including those of executives, may soon be automated.
In light of these developments, Lango has recommended focusing investments on foundational AI companies such as AMD, Nvidia, and Broadcom. He also pointed to applied AI and robotics firms, including Tesla and Palantir, as well as companies providing AI infrastructure like Cisco and Oracle. These stocks are seen as crucial for those looking to capitalize on the ongoing AI revolution.
The announcement of tariffs has already begun to influence market sentiment. AMD‘s recent earnings report indicated uncertainty regarding revenue from China, a significant market for semiconductors. The company previously faced restrictions on shipments to China, but a reversal had sparked hope for resumed sales. The looming tariffs could further complicate AMD’s outlook, especially given the potential for billions in lost revenue across the semiconductor sector.
As Trump’s administration moves forward with its tariff strategy, the implications for the tech industry are profound. The semiconductor chips are essential for the functioning of electronic products, including AI technologies. Analysts warn that if tariffs are enacted, there could be significant short-term volatility in tech stocks, particularly for chipmakers.
Despite these challenges, experts maintain that the long-term demand for semiconductors will remain robust. The chips are integral to AI data centers, robotics, and advanced technology applications. Any downturn in stock prices due to political developments could present opportunities for long-term investors.
In the pharmaceutical sector, Trump has also hinted at imposing tariffs on drugs, which could reach as high as 250%. This strategy aims to encourage domestic production of pharmaceuticals, potentially benefiting companies like Eli Lilly and Johnson & Johnson, which are increasing their U.S. manufacturing capabilities. Conversely, companies like Pfizer could face challenges if they do not pivot to adapt to these new economic realities.
The announcement of a 25% tariff on imports from India, in response to the country’s purchases of Russian oil, further illustrates the administration’s aggressive trade policies. This move could have significant implications for global supply chains and the tech industry, particularly concerning rare earth elements essential for modern technology.
As the landscape evolves, investors are encouraged to refine their strategies. Focusing on companies at the forefront of AI advancements, those capable of implementing AI to enhance operational efficiency, and identifying undervalued leaders in the sector will be crucial in navigating this complex environment.
The coming weeks will be critical as the full impact of the proposed tariffs becomes clearer. Investors are advised to remain vigilant and strategically position themselves in anticipation of the ongoing changes in the tech landscape.