- President Donald Trump's tariffs will impact tech budgets, but AI investments will remain resilient, Goldman Sachs says.
- Spending on AI is protected due to competition, despite increased input costs from tariffs.
- Meta has raised capital expenditure guidance, emphasizing AI as a major focus amid tariff impacts.
President Donald Trump's tariffs are more likely to affect companies' head count than their investment in AI.
That's according to Eric Sheridan, a co-business unit leader for technology, media, and telecommunications at Goldman Sachs.
"I think the macro will end up with more volatility on operating expenses — that's head count, that's marketing spend, that's very, very long duration projects," Eric Sheridan, in a Goldman Sachs Exchange podcast episode released Wednesday.
In contrast, Sheridan said he expects companies' spending on AI to be more protected.
"I think given the sheer number of players investing both offensively and defensively at AI, I think this spend will get protected for a little longer than the macro environment might influence it," Sheridan said about AI.
Sheridan pointed to Meta's first-quarter earnings last week as an example.
The IT giant affirmed its commitment to AI data centers and infrastructure and raised full-year guidance for capital expenditure from a prior range of $60 to $65 billion to $64 to $72 billion now.
CEO Mark Zuckerberg said on the company's earnings call that AI is "the major theme" for Meta right now.
However, the company lowered guidance for total expenses, which includes salaries and marketing spend, from the previous range of $114 to $119 billion to $113 to $118 billion.
"The messaging coming out of the company was, 'We continue to find ways to find efficiencies inside the organization, but we are not at a point where we want to sacrifice long-duration investments, mostly articulated through capex, just because the macro environment could look a certain way for three, six, or nine months,'" said Sheridan.
Following Trump's "Liberation Day" tariff announcement on April 2, many companies have begun adjusting their business operations — raising prices, pausing product sales, and reevaluating supply chains.
The tariffs announced last month include a 10% baseline levy and a range of additional "reciprocal tariffs."
The Trump administration has paused the reciprocal tariffs for 90 days as it negotiates deals with trading partners. This pause excludes China, which faces a 145% tariff.
The US and China are set to meet for trade talks this weekend in Switzerland.
