Business of Tech: Daily 10-Minute IT Services Insights

Tariffs Impacting Inflation, AI Adoption Struggles, and Cybersecurity Changes Under Trump Orders

Aug 14, 2025

Tariffs from the Trump era are squeezing businesses, triggering layoffs and price hikes as companies scramble to cope with rising costs. KAVU has halted marketing and travel, while giants like QVC Group also plan increases to counter tariff impacts. Meanwhile, AI adoption is booming, yet many companies find minimal financial benefits, hinting at a productivity paradox. A shift towards consumption-based AI pricing reveals newfound trust issues. Recent executive orders on cybersecurity could pose challenges, possibly reversing prior advancements in security standards.

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INSIGHT

Tariffs Are Hitting Budgets Now

Tariffs imposed earlier are now raising costs and forcing companies to cut spending and prepare price increases.
Stable tariff expectations will make some clients decisive on hiring and projects, but many will delay discretionary tech spend.

ADVICE

Prove Tech Cuts Costs

Show clients how technology saves money or drives revenue to win deals when budgets tighten.
Expect hardware costs to creep up and price projects accordingly.

INSIGHT

AI Adoption Outpaces Measurable Returns

AI adoption is widespread but McKinsey finds little bottom-line impact so far, echoing past productivity paradoxes.
CFOs are shifting sizable budgets to agentic AI despite returns being more faith than proof.

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Tariffs imposed during the Trump administration are now impacting businesses, leading to layoffs and price increases as companies adapt to rising costs. Outdoor brand KAVU has implemented cost-saving measures, including freezing marketing spending and limiting employee travel, while preparing to raise prices due to escalating tariffs on imports from countries like India and Vietnam. Public companies such as QVC Group and Allbirds are also planning price increases to mitigate the effects of tariffs, which could contribute to higher inflation and reduced consumer spending. As the stability of tariff rates becomes clearer, businesses may become more decisive about hiring and layoffs.

The adoption of artificial intelligence (AI) is surging, with nearly 80% of companies reportedly using generative AI. However, many firms are experiencing little to no significant impact on their bottom line, reminiscent of the productivity paradox seen during the personal computer boom. A survey indicates that CFOs are increasingly prioritizing AI for productivity and long-term revenue growth, with a notable shift in budget allocation towards agentic AI. Despite the optimism surrounding AI investments, the anticipated benefits have yet to materialize, raising concerns about skill degradation among professionals who rely heavily on AI tools.

Recent executive orders signed by President Trump may have significant implications for cybersecurity, potentially reversing progress made under previous administrations. While some directives aim to enhance preparedness for cyberattacks at the state and local level, others remove critical software security requirements for government vendors. This shift could undermine existing protections and create vulnerabilities, benefiting hackers and fraudsters. Additionally, Disney's decision to cancel plans for a deepfake version of Dwayne Johnson highlights the growing concerns over copyright and AI-generated content, as studios grapple with the implications of intellectual property rights in the age of AI.

As AI adoption accelerates, companies are rethinking their pricing strategies, moving from flat fees to consumption-based models to maintain profitability amid rising operational costs. This shift raises questions about forecasting costs and protecting margins, as unexpected spikes in per-task billing could impact clients. Furthermore, the limitations of AI systems in self-assessing their capabilities pose challenges for trust and validation in AI outputs. With significant vulnerabilities identified in AI systems during stress tests, service providers must ensure their AI offerings are built on robust, verified systems to deliver reliable value to clients.

Four things to know today

00:00 With Tariffs Solidifying, Businesses Tighten Spending and Raise Prices, Forcing IT Providers to Prove Value

03:56 Generative AI Adoption Hits 80%, Yet ROI Elusive as Healthcare Skill Loss and Data Risks Emerge

07:56 Mixed Cybersecurity Signals from White House; AI Copyright Uncertainty Halts Disney’s Moana Project

10:50 AI Managed Services Evolve as Consumption Pricing Rises, Chatbots Mislead, and Red Teams Find 139 Flaws

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