Is a Trump Smartphone Made in America Possible?
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Welcome to Tech News Briefing. It's Tuesday, June 17th. I'm Victoria Craig for The Wall Street Journal. U.S. tech giants are benefiting from an AI spending spree in the Middle East, but our Heard on the Street columnist argues logistical and geopolitical pitfalls abound. Then, the Trump Organization took the wraps off a golden Made in America smartphone for just under 500 bucks. But is the promise too good to be true?

First, the United Arab Emirates, Qatar, and Saudi Arabia are going all-in on AI. Recently, they've devoted billions of dollars to Microsoft and OpenAI data centers and the NVIDIA and AMD chips to stock them with. WSJ Heard on the Street columnist Asa Fitch writes that the whole idea is to develop domestic artificial intelligence industries rather than totally ceding the technology to foreign companies. Asa Fitch, a senior at the University of New York, said,

Asa, what are these countries hoping to get from that boom in spending? A lot of countries want to have control over AI. And, you know, in the Middle East, in the Gulf countries that are very energy rich, they have a lot of money to spend and they want to spend it on AI. They want to

be among the leaders in the world in doing just AI in general, but they also want to have things like Arabic large language models and other things that are local to that area, to those countries. And so they're just investing heavily in AI and buying up pretty much as much of this AI stuff as they can. But you write there's a number of reasons to be skeptical about how sustainable this is in the long run. Why? There are a few reasons. One

One is that there are a number of big projects and big investments coming out of this region that have turned into, let's just say, maybe in some cases, failures. In other cases, just really, really slow. The money doesn't come through. The projects don't go as planned. It's hard to generalize because there are many partners for American companies in that region that are very reliable ones. But

There are also many government-funded projects in the Gulf countries way over budget and not on time that just don't pan out. And American companies who are dealing with players in the Middle East, in the Gulf region, should pay attention to that. It's a real factor. The other factor is the conflict between Israel and Iran becoming a potential threat.

pivot point, I suppose, for changes in priorities. Yeah, I mean, that could be a real stick in the spokes. The Middle East, as everybody knows, is not the most peaceful region in general, but the countries, especially the Gulf countries, have been relatively stable for the past number of years. But you can never forget, if you're doing business in that region, that geopolitics can rear its head, and it is now. I mean, we're seeing the trade of missiles and the conflict between Iran and Israel happening in real time. And

And it's not having an effect now, but it's certainly a risk. Even if there is no direct impact to other parts of the region, you could see things like

airspace being closed. You could see things like just American companies out of an abundance of caution telling employees not to travel to the region. What if we look at the geopolitical relationship between China and the U.S.? How does that also factor into how China could potentially take advantage of U.S. companies moving into the Middle East? Yeah, that's another big issue in the region. There's long been a concern among U.S. officials that

China, which has close relationships with these countries in the Middle East, could use those relationships to extend its ability to do AI. In other words, the US is placing a lot of restrictions on China getting stuff it needs to develop AI. So one response that China has had, and we've already seen this in parts of Southeast Asia, is

the Chinese companies, sometimes backed by the government, going outside of China to do AI work. And there's long been a fear that China could do that in the Middle East. And the way this has been addressed in the past under the Biden administration, there were some export controls that were under consideration that would have limited companies' ability to expand in the Middle East and do AI in the Middle East.

Those controls were scrapped by the Trump administration, which kind of paved the way for some of these big deals that we've seen recently from NVIDIA and others coming into the Middle East. But there's no telling what could happen next with export controls. If it is found that China is actually doing that, is using these countries and relationships in these countries to pursue advanced AI, we could see a re-imposition of export controls targeting the region. That was Asa Fitch, a WSJ Heard on the Street columnist.

Coming up, we've explored in detail here why making a smartphone in America is a tall order. The Trump Organization insists it's possible, but there's a catch. We'll have that story after the break. Free your team from time-consuming tasks with Amazon Business. Our smart buying tools help leaders streamline purchasing and empower teams to focus on strategy and growth. Discover how to boost efficiency and support your team's future at AmazonBusiness.com.

It's been a decade since Donald Trump shook up the American political landscape when he rode down an escalator at Trump Tower and announced he was running for president. Coinciding with that occasion yesterday, the Trump Organization announced it will launch a mobile phone service and sell what it's calling the T1 smartphone for $499 by August.

The venture will be overseen by the president's sons, Donald Trump Jr. and Eric Trump, who run the family business. The question is, how will they do what even Apple said is not, at least in the near term, possible? WSJ deputy tech and media editor Wilson Rothman has been looking into that. Wilson, does the Trump organization have a strategy that America's tech titans haven't thought of? I don't.

I doubt it. The thing about manufacturing phones in America is you have to have an infrastructure. You have to have a workforce. You have to have things that you can't just snap your fingers or even throw $500 billion at. It's not a problem that can be solved just with money. It really is a decades in the works kind of project. And do we know anything about where these phones will come from or any other details about them? So the Trump Mobile T1 phone has specs that look as good or better than the best

iPhones. So there's a $1,200 iPhone that we're all probably familiar with the iPhone 16 Pro Max. This thing has specs that are like that, but they're selling it ostensibly for $499. A little bit of a question mark on that. And then they did say the made in America phone would be available August, September timeframe.

And we don't know where that would come from either. There are phones that resemble this at this price point in China. Xiaomi, Oppo, just a couple of names of the big phone producers in China that are very capable of making something like this and selling it at roughly that price point.

But does that mean the Trump organization is going to buy a bunch of Chinese phones after talking about our trade war with China? I don't know. The only detail that the Trump organization has provided is they said manufacturing would be in Alabama, Florida and California. And to that point, here's Eric Trump talking about that to podcaster Benny Johnson on his show. You can build these phones in the United States.

Our customer service is in the United States. It's in St. Louis, Missouri. We can add more functionality. We can do it cheaper. We can do it better. And eventually all the phones can be built in the United States of America. We have to bring manufacturing. What does that mean exactly? How do consumers get their hands on them? Well, as Eric Trump said on that Benny Johnson show, he said eventually all phones can be built in the United States. So even they, after putting out these very definitive press releases about Made in America, are kind of walking it back.

That's my impression. As far as where they're coming from, we won't know until we see the product because the renderings of a product that we see on this page are

could have been made in Photoshop. They could have been made with ChatGPT. Like this is not a photograph of an actual piece of hardware. And so how will the service work? Because one thing that Donald Trump Jr. said in making this announcement is that he sees lackluster performance in this industry and wants to make sure that true Americans can get true value from their mobile carriers. So what is that process like?

It's a good marketing position to capitalize on the frustration of people and their wireless plans. Whether the Trump organization, Trump Mobile, can do better than that is a big question mark. What they're saying they're offering, which is relatively common, it's called a virtual operator. Basically, you rent capacity from the wireless carriers. So what the Trumps

The organization's offering is something that makes sense, but if they're operating it on the carriers themselves, they can't do better than the carriers themselves. The only thing you could do is you kind of mix and match carriers. So in every area, you're using the best. And have we heard from any of the carriers on this so far? They're mum-

for the time being. Now, the product images, renderings, if we can call them that, from the Trump Mobile product page show the Trump name. They have an American flag maybe etched on the back of it. How involved is the president in this venture? The president has said he's not involved in the day-to-day operations of the Trump organization right now. And in fact, he wasn't involved in the announcement. Eric and Don Jr. were there at Trump Tower unveiling this new offering.

That was Wilson Rothman, the journal's deputy tech and media editor. And that's it for Tech News Briefing. Today's show was produced by Julie Chang with deputy editor Kristen Slee. I'm Victoria Craig for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening. Free your team from time-consuming tasks with Amazon Business. Our smart buying tools help leaders streamline purchasing and empower teams to focus on strategy and growth. Discover how to boost efficiency and support your team's future at AmazonBusiness.com.