CIBC Tech & Innovation Market Update – May 2025

After years of investigations into anti-competitive behavior, both Google and Meta face the threat of a court-ordered company break-up. The DOJ has now won two separate cases against Google, while hearings for the FTC’s case against Meta has begun. The outcomes of these cases could set a new precedent in regulating tech giants. Although many of these cases were filed during the first Trump Administration and advanced under Biden, President Trump’s stance towards big tech has been unclear. While the President has been a vocal critic of EU regulators for enforcing digital competition rules, in the US the FTC has continued its investigations into big tech, with cases against six of the magnificent seven ongoing. Under executive orders, the Republican-led FTC has launched new initiatives focused on consumer protections and censorship, with a new lawsuit against Uber launched this week. How aggressively the FTC pursues anti-competitive measures against big tech remains to be seen. The commission faces its own internal shakeup after two Democratic members were fired, reducing the commissioner count to three.

On April 11, the Trump administration issued a memo stating certain electronics including computers, smartphones and some components will not be subject to the reciprocal tariffs imposed on China. Nvidia and the rest of big tech gained on Monday in response, although the reaction was short lived. Comments from the White House shortly after stated the exemption is temporary and additional tariffs on semiconductors may be pursued in the coming months. The confusion has not benefited the tech sector, and these updates are the latest in what continues to be a turbulent environment.

In response to U.S. President Donald Trump’s sweeping tariff announcements, tech companies that had planned to go public are once again delaying IPO timelines. Both Klarna and StubHub are delaying plans to go public due to the recent market turbulence. 2024 had already been a slow year for IPOs and 2025 was poised to be a year of recovery with investors looking to a record backlog of unicorns and expecting less regulation and more clarity on policy from the Trump administration. However, the recent tariff announcements have ratcheted up market volatility and privates are reconsidering. CoreWeave debuted on March 28 at $40/share and has had a volatile first week in the public market. As it stands now, we expect to see more late-stage privates delay IPO plans until market conditions stabilize.

You don’t have to be a parent or a teacher to know that AI use among school-aged children and teens has been on the rise. While we’re still very early into the age of AI and understanding its impact, recent studies have indicated that AI misuse could be impacting critical-thinking skills. A 2025 study from researchers at Microsoft and Carnegie Mellon University found that the improper user of generative AI tools can result in a deterioration of cognitive facilities, raising concerns about diminished problem-solving skills from prolonged GenAI use. The study was conducted with adult participants; however, teachers believe that misuse of AI could be even more detrimental to younger students given they lack a built-up foundation of knowledge.