According to sources familiar with the matter, the U.S. federal government under President Trump is planning to exempt major American technology companies such as Amazon.com (AMZN.US), Alphabet (GOOGL.US), and Microsoft (MSFT.US) from the upcoming round of foreign chip tariffs. This is primarily because these large tech firms are heavily investing in the construction of AI data centers, a process that is critically important to the U.S. economy. Sources emphasized that these specific tariff exemptions, related to chip import policies, would be granted by the U.S. Department of Commerce following trade investigations. The exemptions are closely linked to substantial investment commitments from Taiwan Semiconductor Manufacturing (TSM.US), often called the "king of chip foundries," which plans to invest over a hundred billion dollars in U.S.-based manufacturing of high-performance AI chips and other advanced semiconductors using 3-nanometer and more advanced process technologies, including packaging. However, insiders noted that this large-scale tariff exemption plan is still under adjustment and has not yet been signed off by President Trump.
Previously, in its January earnings call, Taiwan Semiconductor Manufacturing highlighted that the world's largest chip foundry is actively investing up to $165 billion, with plans to build multiple large-scale semiconductor fabrication plants in Arizona. One of these facilities has already begun producing 5-nanometer chips in the United States.
How crucial is the construction of AI data centers to the U.S. economy? Undoubtedly, this construction has rapidly evolved from a technological investment into a major driver of macroeconomic growth. Recent estimates from JPMorgan indicate that capital expenditures related to AI data centers could contribute approximately 0.1 to 0.2 percentage points (10 to 20 basis points) to U.S. GDP growth in 2025–2026. This boost is largely attributable to investments by major cloud service providers like Microsoft, Alphabet, and Amazon.com in large-scale AI data center projects, such as the "Stargate" initiative, and associated infrastructure. Such massive investments not only stimulate demand across various supply chains—including construction, equipment, and power supply—but also help cushion the U.S. economy against slowdown pressures stemming from a persistently weak labor market.
This policy approach is also seen as interconnected with commitments from key foundries like Taiwan Semiconductor Manufacturing to expand production capacity within the United States, aiming to ensure a stable supply chain for AI computing power and promote localized chip manufacturing. In this context, imposing blanket high tariffs on critical hardware components—specifically, essential chips vital for data center construction—could significantly increase the costs of building AI data centers, delay project timelines, and undermine investor confidence. Such effects could dampen economic growth in the short term, as studies have shown tariffs tend to reduce economic growth, and potentially constrain productive capacity and capital stock over the longer term.
Therefore, the reported exemptions for chips essential to core AI data centers suggest the Trump administration is attempting to maintain the momentum of massive AI computing infrastructure investments, preventing setbacks in market expectations and actual expenditures. This reflects a federal view of AI investment as a "GDP growth engine" rather than merely an industrial policy incentive. Additionally, the Trump administration could ill afford a sharp stock market correction among major tech firms due to tariffs.
Broader research and market analysis indicate that AI and related technology investments have become a significant variable driving U.S. economic growth. For instance, some Wall Street analysts note that AI-related investments are already contributing nearly 1% to U.S. GDP growth in 2024–2025. By substantially boosting the valuations of technology stocks and generating significant wealth effects, these investments support consumer spending and investment activities, which is particularly important amid weakening traditional growth drivers.
From a stock market perspective, a significant correction in the heavily weighted "Magnificent Seven" stocks due to chip tariff policies could potentially trigger a financial crisis-level event for the U.S. stock market and the broader economy. Within the U.S. technology sector, the so-called "Mag 7"—which carry heavy weight in the S&P 500 and Nasdaq 100 indices—have the greatest impact on sector earnings. According to consensus analyst estimates compiled by institutions, the "Magnificent Seven" are projected to achieve aggregate earnings growth of approximately 24% in 2026. In contrast, the remaining 493 companies in the S&P 500 are expected to grow earnings by about 12.5%. This means the earnings growth rate of the "Mag 7" is nearly double that of the broader market's other constituents.
Thus, from the standpoint of earnings expectations and market weightings, the technology sector—especially the seven mega-cap leaders—remains the core force driving profit growth and bull market performance in the U.S. stock market for 2026, far exceeding the aggregate earnings outlook for the other 493 index components and amplifying their influence on index movements. Although market rotation has become more apparent, from an earnings perspective, this rotation may not persist for long. The unprecedented build-out of AI computing infrastructure and the AI investment theme centered on the "Mag 7" are expected to remain the stock market's strongest narrative throughout 2026, much as in 2024 and 2025.
The "Magnificent Seven"—comprising Apple, Microsoft, Alphabet, Tesla, Nvidia, Amazon.com, and Meta Platforms (the parent company of Facebook)—account for a significant weighting (approximately 35%) in the S&P 500 and Nasdaq 100 indices. They have been the primary drivers behind the S&P 500 repeatedly reaching new highs and are regarded by top Wall Street investment firms as the portfolio most capable of delivering substantial returns to investors amid what is considered the largest technological transformation since the internet era.
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