The Technopolar Moment
How Digital Powers Will Reshape the Global Order
By Ian Bremmer
November/December 2021Published on October 19, 2021
Amazon’s Jeff Bezos in New York, September 2011
Shannon Stapleton / Reuters
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After rioters stormed the U.S. Capitol on January 6, some of the United States’ most
powerful institutions sprang into action to punish the leaders of the failed insurrection.
But they weren’t the ones you might expect. Facebook and Twitter suspended the
accounts of President Donald Trump for posts praising the rioters. Amazon, Apple, and
Google effectively banished Parler, an alternative to Twitter that Trump’s supporters
had used to encourage and coordinate the attack, by blocking its access to Web-hosting
services and app stores. Major financial service apps, such as PayPal and Stripe,
stopped processing payments for the Trump campaign and for accounts that had funded
travel expenses to Washington, D.C., for Trump’s supporters.
The speed of these technology companies’ reactions stands in stark contrast to the
feeble response from the United States’ governing institutions. Congress still has not
censured Trump for his role in the storming of the Capitol. Its efforts to establish a
bipartisan, 9/11-style commission failed amid Republican opposition. Law enforcement
agencies have been able to arrest some individual rioters—but in many cases only by
tracking clues they left on social media about their participation in the fiasco.
States have been the primary actors in global affairs for nearly 400 years. That is
starting to change, as a handful of large technology companies rival them for
geopolitical influence. The aftermath of the January 6 riot serves as the latest proof that
Amazon, Apple, Facebook, Google, and Twitter are no longer merely large companies;
they have taken control of aspects of society, the economy, and national security that
were long the exclusive preserve of the state. The same goes for Chinese technology
companies, such as Alibaba, ByteDance, and Tencent. Nonstate actors are increasingly
shaping geopolitics, with technology companies in the lead. And although Europe wants
to play, its companies do not have the size or geopolitical influence to compete with
their American and Chinese counterparts.
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Most of the analysis of U.S.-Chinese technological competition, however, is stuck in a
statist paradigm. It depicts technology companies as foot soldiers in a conflict between
hostile countries. But technology companies are not mere tools in the hands of
governments. None of their actions in the immediate aftermath of the Capitol
insurrection, for instance, came at the behest of the government or law enforcement.
These were private decisions made by for-profit companies exercising power over code,
servers, and regulations under their control. These companies are increasingly shaping
the global environment in which governments operate. They have huge influence over
the technologies and services that will drive the next industrial revolution, determine
how countries project economic and military power, shape the future of work, and
redefine social contracts.
It is time to start thinking of the biggest technology companies as similar to states.
These companies exercise a form of sovereignty over a rapidly expanding realm that
extends beyond the reach of regulators: digital space. They bring resources to
geopolitical competition but face constraints on their power to act. They maintain
foreign relations and answer to constituencies, including shareholders, employees,
users, and advertisers.
Technology companies are shaping the global environment in which governments
operate.
Political scientists rely on a wide array of terms to classify governments: there are
“democracies,” “autocracies,” and “hybrid regimes,” which combine elements of both.
But they have no such tools for understanding Big Tech. It’s time they started
developing them, for not all technology companies operate in the same way. Even
though technology companies, like countries, resist neat classifications, there are three
broad forces that are driving their geopolitical postures and worldviews: globalism,
nationalism, and techno-utopianism.
These categories illuminate the choices facing the biggest technology firms as they
work to shape global affairs. Will we live in a world where the Internet is increasingly
fragmented and technology companies serve the interests and goals of the states in
which they reside, or will Big Tech decisively wrest control of digital space from
governments, freeing itself from national boundaries and emerging as a truly global
force? Or could the era of state dominance finally come to an end, supplanted by a
techno-elite that assumes responsibility for offering the public goods once provided by
governments? Analysts, policymakers, and the public would do well to understand the
competing outlooks that determine how these new geopolitical actors wield their power,
because the interplay among them will define the economic, social, and political life of
the twenty-first century.
BIG TECH IS WATCHING YOU
To understand how the struggle for geopolitical influence between technology firms and
governments will play out, it is important to grasp the nature of these companies’
power. The tools at their disposal are unique in global affairs, which is why
governments are finding it so hard to rein them in. Although this isn’t the first time that
private corporations have played a major role in geopolitics—consider the East India
Company and Big Oil, for example—earlier giants could never match the pervasive
global presence of today’s technology firms. It is one thing to wield power in the
smoke-filled rooms of political power brokers; it is another to directly affect the
livelihoods, relationships, security, and even thought patterns of billions of people
across the globe.
Today’s biggest technology firms have two critical advantages that have allowed them
to carve out independent geopolitical influence. First, they do not operate or wield
power exclusively in physical space. They have created a new dimension in
geopolitics—digital space—over which they exercise primary influence. People are
increasingly living out their lives in this vast territory, which governments do not and
cannot fully control.
The implications of this fact bear on virtually all aspects of civic, economic, and private
life. In many democracies today, politicians’ ability to gain followers on Facebook and
Twitter unlocks the money and political support needed to win office. That is why the
technology companies’ actions to deplatform Trump after the Capitol Hill riot were so
powerful. For a new generation of entrepreneurs, Amazon’s marketplace and Web-
hosting services, Apple’s app store, Facebook’s ad-targeting tools, and Google’s search
engine have become indispensable for launching a successful business. Big Tech is even
transforming human relationships. In their private lives, people increasingly connect
with one another through algorithms.
Technology companies are not just exercising a form of sovereignty over how citizens
behave on digital platforms; they are also shaping behaviors and interactions. The little
red Facebook notifications deliver dopamine hits to your brain, Google’s artificial
intelligence (AI) algorithms complete sentences while you type, and Amazon’s methods
of selecting which products pop up at the top of your search screen affect what you buy.
In these ways, technology firms are guiding how people spend their time, what
professional and social opportunities they pursue, and, ultimately, what they think. This
power will grow as social, economic, and political institutions continue to shift from the
physical world to digital space.
Facebook's Mark Zuckerberg testifying on Capitol Hill in Washington, D.C., October
2019
Erin Scott / Reuters
The second way these technology companies differ from their formidable predecessors
is that they are increasingly providing a full spectrum of both the digital and the real-
world products that are required to run a modern society. Although private companies
have long played a role in delivering basic needs, from medicine to energy, today’s
rapidly digitizing economy depends on a more complex array of goods, services, and
information flows. Currently, just four companies—Alibaba, Amazon, Google, and
Microsoft—meet the bulk of the world’s demand for cloud services, the essential
computing infrastructure that has kept people working and children learning during the
COVID-19 pandemic. The future competitiveness of traditional industries will depend
on how effectively they seize new opportunities created by 5G networks, AI, and
massive Internet-of-Things deployments. Internet companies and financial service
providers already depend heavily on the infrastructure provided by these cloud leaders.
Soon, growing numbers of cars, assembly lines, and cities will, too.
Along with owning the world’s leading search engine and its most popular smartphone
operating system, Google’s parent company, Alphabet, dabbles in health care, drug
development, and autonomous vehicles. Amazon’s sprawling e-commerce and logistics
network furnishes millions of people with basic consumer goods. In China, Alibaba and
Tencent dominate payment systems, social media, video streaming, e-commerce, and
logistics. They also invest in projects important to the Chinese government, such as the
Digital Silk Road, which aims to bring to emerging markets the undersea cables,
telecommunications networks, cloud capabilities, and apps needed to run a digital
society.
Private-sector technology firms are also providing national security, a role that has
traditionally been reserved for governments and the defense contractors they hire. When
Russian hackers breached U.S. government agencies and private companies last year, it
was Microsoft, not the National Security Agency or U.S. Cyber Command, that first
discovered and cut off the intruders. Of course, private companies have long supported
national security objectives. Before the biggest banks became “too big to fail,” that
phrase was applied to the U.S. defense company Lockheed Corporation (now Lockheed
Martin) during the Cold War. But Lockheed just made the fighter jets and missiles for
the U.S. government. It didn’t operate the air force or police the skies. The biggest
technology companies are building the backbone of the digital world and policing that
world at the same time.
Big Tech’s eclipse of the nation-state is not inevitable. Governments are taking steps to
tame an unruly digital sphere: whether it is China’s recent moves targeting Alibaba and
Ant Group, which derailed what would have been one of the world’s biggest-ever initial
public offerings; the EU’s attempts to regulate personal data, AI, and the large
technology companies that it defines as digital “gatekeepers”; the numerous antitrust
bills introduced in the U.S. House of Representatives; or India’s ongoing pressure on
foreign social media companies—the technology industry is facing a political and
regulatory backlash on multiple fronts.
Moreover, technology firms cannot decouple themselves from physical space, where
they remain at the mercy of states. The code for the virtual worlds that these companies
have created sits in data centers that are located on territory controlled by governments.
Companies are subject to national laws. They can be fined or subjected to other
sanctions, their websites can be blocked, and their executives can be arrested if they
break the rules.
People are increasingly living out their lives in digital space, which governments cannot
fully control.
But as technology grows more sophisticated, states and regulators are increasingly
constrained by outdated laws and limited capacity. Digital space is ever growing.
Facebook now counts nearly three billion monthly active users. Google reports that over
one billion hours of video are consumed on YouTube, its video-streaming platform,
each day. Over 64 billion terabytes of digital information was created and stored in
2020, enough to fill some 500 billion smartphones. In its next phase, this “datasphere”
will see cars, factories, and entire cities wired with Internet-connected sensors trading
data. As this realm grows, the ability to control it will slip further beyond the reach of
states. And because technology companies provide important digital and real-world
goods and services, states that cannot provide those things risk shooting themselves in
the foot if their draconian measures lead companies to stop their operations.
Governments have long deployed sophisticated systems to monitor digital space: China
created the so-called Great Firewall to control the information its citizens see, and the
United States’ spy agencies established the echelon surveillance system to monitor
global communications. But such systems can’t keep tabs on everything. Fines for
failing to take down illegal content are a nuisance for businesses, not an existential
threat. And governments realize that they could sabotage their own legitimacy if they go
too far. The potential for a popular backlash is one reason why even Russian President
Vladimir Putin is unlikely to ever go as far as Beijing has in restricting citizens’ access
to the global Internet.
That is not to say that Big Tech is massively well liked. Even before the pandemic,
public opinion polls in the United States showed that what once was the most admired
sector in the country was losing popularity among Americans. A majority of Americans
are in favor of stricter regulations for big technology companies, according to a
February 2021 Gallup survey. Global trust in those companies—especially social media
firms—has also been hit hard during the pandemic, according to the annual Trust
Barometer published by Edelman, a public relations consultancy.
But even if getting tough on Big Tech is one of the few things on which both Democrats
and Republicans agree, the fact that there hasn’t been a major crackdown yet is telling.
In the United States, a combination of congressional dysfunction and Silicon Valley’s
potent lobbying power will likely continue to preclude expansive new regulations that
could pose a serious threat to the digital giants. It is different in Europe, where the lack
of homegrown cloud, search, and social media conglomerates makes passing ambitious
legislation easier. And it is certainly different in China, where a recent round of
regulatory crackdowns has sent shares of the country’s own technology heavyweights
reeling.
In both Brussels and Beijing, politicians are trying to channel the power of the biggest
technology companies in pursuit of national priorities. But with the cloud, AI, and other
emerging technologies set to become even more important to people’s livelihoods—and
to the ability of states to meet their people’s basic needs—it is far from certain that the
politicians will succeed.
THE STATE STRIKES BACK
The most important question in geopolitics today might be, Will countries that break up
or clamp down on their biggest technology firms also be able to seize the opportunities
of the digital revolution’s next phase, or will their efforts backfire? The EU, alarmed
that it has not given rise to digital giants the way the United States and China have,
appears intent on finding out. It is at the forefront of democratic societies pushing for
greater sovereignty over digital space. In 2018, the EU passed a sweeping data
protection law that restricts transfers of personal data outside the 27-member bloc and
threatens steep fines on companies that fail to protect EU citizens’ sensitive
information.
A new regulatory package advancing in Brussels would give the European Commission
new powers to fine Internet platforms over illegal content, control high-risk AI
applications, and potentially break up technology companies that EU bureaucrats deem
too powerful. The EU and influential member states, such as France, are also calling for
technology-focused industrial policies—including billions of euros of government
funding—to encourage new approaches to pooling data and computing resources. The
goal is to develop alternatives to the biggest cloud platforms that, unlike the current
options, are grounded in “European values.”
This is a massive gamble. Europe, acting from a position of weakness, is betting that it
can corral the technology giants and unleash a new wave of European innovation. If it
turns out instead that only the biggest technology platforms can muster the capital,
talent, and infrastructure needed to develop and run the digital systems that companies
rely on, Europe will have only accelerated its geopolitical decline. The outcome hinges
on whether a handful of large-scale cloud platforms, with all the attendant economic
opportunities and challenges, can continue to drive innovation or whether a group of
companies operating under greater government supervision can still produce cutting-
edge digital infrastructure that is globally competitive.
Big Tech is transforming human relationships.
It is expensive to create and maintain digital space on a massive scale. Alphabet,
Amazon, Apple, Facebook, and Microsoft plowed a combined $109 billion into
research and development in 2019. That is roughly equal to Germany’s total public and
private R & D spending in the same period and more than double the amount spent that
year by the United Kingdom’s government and private sector put together. If European
states want greater control of the technology sector, they’re going to have to invest
much more money. But even if governments were willing to finance these digital
capabilities themselves, money is only part of the picture. They would likely struggle to
bring together the engineering and other talent required to design, maintain, operate, and
grow the complex cloud infrastructure, AI applications, and other systems that make
these technologies work at scale.
Achieving and maintaining global leadership in fields such as cloud computing or
semiconductors requires huge and sustained investments of financial and human capital.
It also requires close relationships with customers and other partners across complex
global supply chains. Today’s modern semiconductor plants can cost in excess of $15
billion apiece and require legions of highly trained engineers to set them up and run
them. The world’s leading cloud service providers can invest billions of dollars in R &
D each year because they are continually refining their products in response to
customers’ needs and funneling their profits back into research. Governments—and
even groups of small firms working together—would struggle to muster the resources
needed to deliver these technologies at the scale required to power the global economy.
Even in China, where the government is not afraid to throw its weight around, the
Chinese Communist Party (CCP) is counting on the country’s biggest private-sector
technology companies to do the heavy lifting as it aims to build a wealthy and digitally
advanced society.
The next decade will test what happens as the politics of digital space and physical
space converge. Governments and technology companies are poised to compete for
influence over both worlds—hence the need for a better framework for understanding
what the companies’ goals are and how their power interacts with that of governments
in both domains.
THE STRUGGLE WITHIN BIG TECH
Technology companies’ orientations are no less diverse than the states with which they
compete. Strands of globalism, nationalism, and techno-utopianism often coexist within
the same company. Which outlook predominates will have important consequences for
global politics and society.
First are the globalists—firms that built their empires by operating on a truly
international scale. These companies, including Apple, Facebook, and Google, create
and populate digital space, allowing their business presence and revenue streams to
become untethered from physical territory. Each grew powerful by hitting on an idea
that allowed it to dominate an economically valuable niche and then taking its business
worldwide.
The likes of Alibaba, ByteDance, and Tencent emerged at the top of China’s massive
domestic market before setting their sights on global growth. But the idea was the same:
set up shop in as many countries as possible, respect local rules and regulations as
necessary, and compete fiercely. Sure, they have also benefited from policy and
financial support from Beijing, but it is still a cutthroat, profit-driven approach to global
expansion that is driving innovation at these firms.
Alibaba's Jack Ma and Tesla's Elon Musk in Shanghai, August 2019
Aly Song / Reuters
Then there are the national champions, which are more willing to align themselves
explicitly with the priorities of their home governments. These firms are partnering with
governments in various important domains, including the cloud, AI, and cybersecurity.
They secure massive revenues by selling their products to governments, and they use
their expertise to help guide these same governments’ actions. The companies hewing
closest to the national-champion model are in China, where firms have long faced
pressure to further national goals. Huawei and SMIC are China’s core national
champions in 5G and semiconductors. And in 2017, Chinese President Xi Jinping
named Alibaba and Tencent, along with the search engine Baidu and the voice
recognition company iFlytek, to China’s “national AI team,” giving each of them a
leading role in building out parts of China’s AI-powered future.
More than perhaps any other country, China has enlisted its technology giants during
the pandemic, leaning heavily on digital services—including videoconferencing and
telemedicine—and even using them to enforce lockdowns and other travel restrictions
as the pandemic took hold. It has also tapped Chinese technology firms to manage
reopenings by providing digital health passports and to engage in “mask diplomacy” by
shipping badly needed medical supplies to needy countries to enhance China’s soft
power.
Today, even historically globalist U.S. companies are feeling the pull of the national-
champion model. Microsoft’s growing role in policing digital space on behalf of the
United States and allied democracies and targeting misinformation spread by state
actors (particularly China and Russia) and international crime syndicates is leading it in
that direction. Amazon and Microsoft are also competing to provide cloud-computing
infrastructure to the U.S. government. Amazon’s new CEO, Andy Jassy, who
previously headed its cloud business, was a member of the National Security
Commission on Artificial Intelligence, a blue-ribbon advisory panel that published a
major report earlier this year that is having a strong influence on the evolution of the
United States’ national AI strategy.
The forces of globalism and nationalism sometimes clash with a third camp: the techno-
utopians. Some of the world’s most powerful technology firms are headed by
charismatic visionaries who see technology not just as a global business opportunity but
also as a potentially revolutionary force in human affairs. In contrast to the other two
groups, this camp centers more on the personalities and ambitions of technology CEOs
rather than the operations of the companies themselves. Whereas globalists want the
state to leave them alone and maintain favorable conditions for global commerce, and
national champions see an opportunity to get rich off the state, techno-utopians look to a
future in which the nation-state paradigm that has dominated geopolitics since the
seventeenth century has been replaced by something different altogether.
Technology companies are increasingly geopolitical actors in and of themselves.
Elon Musk, the CEO of Tesla and SpaceX, is the most recognizable example, with his
open ambition to reinvent transportation, link computers to human brains, and make
humanity a “multiplanetary species” by colonizing Mars. Yes, he is also providing
space lift capacity to the U.S. government, but he is chiefly focused on dominating near-
space orbit and creating a future in which technology companies help societies evolve
beyond the concept of nation-states. Mark Zuckerberg, the CEO of Facebook, has
similar tendencies, even if he has become more open to government regulation of online
content. Diem, a Facebook-backed digital currency, had to be scaled back dramatically
after financial regulators almost universally raised concerns. Thanks to the dominance
of the U.S. dollar, governments retain a far stronger grip on finance than on other
domains in digital space.
That may not be true for long if Vitalik Buterin and the entrepreneurs building on top of
his Ethereum ecosystem get their way. Ethereum, the world’s second most popular
blockchain after Bitcoin, is rapidly emerging as the underlying infrastructure powering a
new generation of decentralized Internet applications. It may pose an even greater
challenge to government power than Diem. Ethereum’s design includes smart contracts,
which enable the parties to a transaction to embed the terms of doing business into hard-
to-alter computer code. Entrepreneurs have seized on the technology and the
surrounding hype to cook up new businesses, including betting markets, financial
derivatives, and payment systems that are almost impossible to alter or abolish once
they have been launched. Although much of this innovation to date has been in the
financial realm, some proponents believe that blockchain technology and decentralized
apps will be the keys to unlocking the next big leap forward for the Web: the metaverse,
a place where augmented and virtual reality, next-generation data networks, and
decentralized financing and payment systems contribute to a more realistic and
immersive digital world where people can socialize, work, and trade digital goods.
China still has its globalists and national champions, albeit with a more statist tilt than
those in the United States. But it no longer has its own techno-utopians. The CCP once
exalted Jack Ma, a co-founder of Alibaba and the country’s most prominent
entrepreneur, who revolutionized how people buy and sell goods and tried to create a
new version of the World Trade Organization to facilitate e-commerce and promote
direct global trade. But the party reined him in after he gave a speech in October 2020
criticizing its financial regulators for stifling innovation. Beijing now has Ma and
Alibaba on a much tighter leash, a cautionary tale for any would-be techno-utopians in
China who might consider challenging the state.
Even so, China depends on the digital infrastructure provided by the likes of Ma to
boost productivity and living standards—and thus ensure the CCP’s long-term survival.
China’s authoritarianism enables it to be more forceful in its regulation of digital space
and the companies that build and maintain it, but Beijing ultimately faces the same
tradeoffs as Washington and Brussels. If it tightens its grip too much, it risks harming
the country itself by smothering innovation.
OUR DIGITAL FUTURES
As technology companies and governments negotiate for control over digital space,
U.S. and Chinese technology giants will operate in one of three geopolitical
environments: one in which the state reigns supreme, rewarding the national champions;
one in which corporations wrest control from the state over digital space, empowering
the globalists; or one in which the state fades away, elevating the techno-utopians.
In the first scenario, the national champions win, and the state remains the dominant
provider of security, regulation, and public goods. Systemic shocks, such as the
COVID-19 pandemic, and long-term threats, such as climate change, coupled with a
public backlash against the power of technology firms, entrench government authority
as the only force that can resolve global challenges. A bipartisan push for regulation in
the United States rewards “patriotic” companies that deploy their resources in support
of national goals. The government hopes that a new generation of technology-enabled
services for education, health care, and other components of the social contract will
boost its legitimacy in the eyes of middle-class voters. Beijing and other authoritarian
governments double down on cultivating their own national champions, pushing hard
for self-sufficiency while competing for influence in important global swing markets,
such as Brazil, India, and Southeast Asia. China’s private technology sector becomes
less independent, and its technology companies no longer go public on international
stock exchanges.
U.S. allies and partners find it much harder to balance their ties with Washington and
Beijing. Europe is the big loser here, as it lacks technology companies with the financial
capacity or technological wherewithal to hold their own against those of the two major
powers. As the EU’s push for digital sovereignty sputters and the U.S.-Chinese cold war
makes national security in the technology space a dominant priority, Europe’s
technology sector has little choice but to follow Washington’s agenda.
As the United States and China decouple, companies that can recast themselves as
national champions are rewarded. Washington and Beijing both funnel resources to
technology firms to align them with their national goals. The increasingly fragmented
nature of the Internet, meanwhile, makes operating on a truly global scale increasingly
difficult: when data, software, or advanced semiconductor technology can’t move across
borders because of legal and policy barriers or when computers or phones made by U.S.
and Chinese companies can’t talk to one another, it raises costs and regulatory risks for
companies.
Apple's Tim Cook at the EU's privacy conference in Brussels, October 2018
Yves Herman / Reuters
Amazon and Microsoft might not find it hard to adapt to this new order, as they are
already responding to growing pressure to support national security imperatives. Both
companies already compete to provide cloud services to the U.S. government and
intelligence agencies. But Apple and Google could find working with the U.S.
government more uncomfortable; the former has balked at government requests to crack
encrypted smartphones, and the latter pulled out of a project with the Pentagon on
image recognition. Facebook might have the hardest time navigating a landscape that
favored national champions if it is seen as providing a platform for foreign
disinformation without also offering useful assets for the government, such as cloud
computing or military AI applications.
This would be a more geopolitically volatile world, with a greater risk of strategic and
technological bifurcation. Taiwan would be a major concern, as U.S. and Chinese
companies continue to rely on the Taiwan Semiconductor Manufacturing Company as a
major supplier of cutting-edge chips. Washington is already moving to cut off leading
Chinese technology firms from Taiwan and TSMC, fueling impressions in Beijing that
Taiwan is being dragged further into the U.S. orbit. Although it remains unlikely that
China would choose to invade Taiwan over semiconductors alone—the potential for a
military conflict with the United States that escalates beyond Taiwan would be too
great, and the damage to China’s international standing and business environment
would be too severe—it remains a potentially potent tail risk.
A world of national champions would also impede the international cooperation needed
to address global crises—whether a pandemic disease more lethal than COVID-19 or a
surge of global migration induced by climate change. It would be ironic if technology
nationalism made it harder for governments to address these problems, given the role of
such crises in shoring up the state’s position as the provider of last resort in the first
place.
In the second scenario, the state holds on but in a weakened condition—paving the way
for the ascendancy of the globalists. Unable to keep pace with technological innovation,
regulators accept that governments will share sovereignty over digital space with
technology companies. Big Tech beats back restrictions that could curtail its overseas
operations, arguing that the loss of market opportunities will harm innovation and,
ultimately, governments’ ability to create jobs and meet global challenges. Rather than
accept a technological cold war, companies pressure governments to agree on a set of
common rules that preserve a global market for hardware, software, and data.
Apple and Google would arguably have the most to gain from this outcome. Instead of
being forced to choose between a U.S.- and a Chinese-dominated Internet, Apple could
continue to offer its own unique technology ecosystem catering to elites in both San
Francisco and Shanghai. Google’s advertising-heavy revenue model would thrive as
people in democracies and authoritarian countries alike consumed products and services
that commodified every piece of personal data.
Governments and technology companies are poised to compete for influence.
The triumph of globalism would also help Alibaba, which hosts the world’s largest e-
commerce websites. ByteDance, whose video-sharing app TikTok has helped it achieve
a valuation north of $140 billion, would be free to serve up viral videos to a global
audience, supercharging its AI algorithms and its global revenues. Tencent is also a
globalist but cooperates far more deeply with China’s internal security apparatus than
Alibaba. It would find it easier to trend in the direction of a national champion as
ideological competition between Washington and Beijing intensified.
The globalists need stability to succeed over the coming decade. Their worst fear is that
the United States and China will continue to decouple, forcing them to choose sides in
an economic war that will raise barriers to their attempts to globalize their businesses.
Their fortunes would improve if Washington and Beijing decided that overregulation
risks undercutting the innovation that drives their economies. In the case of
Washington, that means pulling back from an industrial policy designed to convince
companies that they can thrive as national champions; for Beijing, it means preserving
the independence and autonomy of the private sector.
A world in which the globalists reign supreme would give Europe a chance to reassert
itself as a savvy bureaucratic player capable of designing the rules that allow technology
companies and governments to share sovereignty in digital space. Washington and
Beijing would still be the two dominant global powers, but the failure of the former’s
industrial policy push and the latter’s quest to elevate national champions would loosen
the two powers’ grip on geopolitics, increase the demand for global governance, and
create more opportunities for global rule setting. This is a world with somewhat weaker
American and Chinese governments but one that offers both countries their best chance
to cooperate on urgent global challenges.
In the final scenario, the oft-predicted erosion of the state finally comes to pass. The
techno-utopians capitalize on widespread disillusionment with governments that have
failed to create prosperity and stability, drawing citizens into a digital economy that
disintermediates the state. Confidence in the dollar as a global reserve currency
erodes—or collapses. Cryptocurrencies prove too much for regulators to control, and
they gain wide acceptance, undermining governments’ sway over the financial world.
The disintegration of centralized authority renders the world substantially less capable
of addressing transnational challenges. For technological visionaries with vaulting
ambitions and commensurate resources, the question of patriotism becomes moot. Musk
plays an ever-greater role in deciding how space is explored. Facebook substitutes for
the public square, civil society, and the social safety net, creating a blockchain-based
currency that gains widespread usage.
The implications of a world in which techno-utopians call the shots are the hardest to
tease out, in part because people are so accustomed to thinking of the state as the
principal problem-solving actor. Governments would not go down without a fight. And
the erosion of the U.S. government’s authority would not give techno-utopians free rein;
the Chinese state would also need to suffer a collapse in domestic credibility. The less
that governments stand in their way, the more techno-utopians will be able to shape the
evolution of a new world order, for good and for ill.
A BRAVE NEW DIGITAL WORLD
A generation ago, the foundational premise of the Internet was that it would accelerate
the globalization that transformed economics and politics in the 1990s. Many hoped that
the digital age could foster the unfettered flow of information, challenging the grip of
authoritarian holdouts who thought they could escape the so-called end of history. The
picture is different today: a concentration of power in the hands of a few very large
technology firms and the competing interventions of U.S.-, Chinese-, and EU-centered
power blocs have led to a much more fragmented digital landscape.
The consequences for the future world order will be no less profound. Right now, the
world’s largest technology firms are assessing how best to position themselves as
Washington and Beijing steel themselves for protracted competition. The United States
believes that its foremost geopolitical imperative is to prevent its displacement by its
techno-authoritarian rival. China’s top priority is to ensure that it can stand on its own
two feet economically and technologically before a coalition of advanced industrial
democracies stifles its further expansion. Big Tech will tread cautiously for now to
make sure it does not further compound government insecurity about losing authority.
But as U.S.-Chinese competition grows more entrenched, these firms will wield their
leverage more proactively. If they manage to establish themselves as “the indispensable
companies”—much like the United States considers itself “the indispensable nation”—
the national champions will push for greater government subsidies and preferential
treatment over their rivals. They will also press for greater decoupling, arguing that their
vital work needs maximum protection from adversarial hacking.
The globalists will argue that governments will be unable to sustain economic and
technological competitiveness over the long haul if they turn inward and adopt a bunker
mentality. American globalists will note that big Asian and European companies, far
from exiting China, are boosting their presence there—and that Washington will hurt
only itself by forcing American companies out of the world’s largest consumer market.
To preempt the government charge that they are putting their bottom lines above
national security, they will argue that deeper levels of decoupling will inhibit U.S.-
Chinese cooperation on urgent transnational challenges, such as deadly pandemics and
climate change. The Chinese globalists will argue that the CCP’s ability to sustain
robust growth—and therefore domestic legitimacy—will ride on whether China can
establish itself as a hub of global innovation.
And the techno-utopians? They will be happy to work quietly, biding their time. While
the national champions and the globalists duke it out over who will shape government
policy, the techno-utopians will use traditional companies and decentralized projects,
such as Ethereum, to explore new frontiers in digital space, such as the metaverse, or
new approaches to providing essential services. They will strike an understanding tone
when the U.S. government hauls them in before Congress every now and then, per
usual, to denounce their egos and power, taking minimal steps to appease policymakers
but deploying aggressive lobbying efforts to undermine any efforts by Washington to
bring them to heel.
This does not mean that societies are heading toward a future that witnesses the demise
of the nation-state, the end of governments, and the dissolution of borders. There is no
reason to think these predictions are any more likely to come true today than they were
in the 1990s. But it is simply no longer tenable to talk about big technology companies
as pawns their government masters can move around on a geopolitical chessboard. They
are increasingly geopolitical actors in and of themselves. And as U.S.-Chinese
competition plays an increasingly dominant role in global affairs, they will hold
growing leverage to shape how Washington and Beijing behave. Only by updating our
understanding of their geopolitical power can we make better sense of this brave new
digital world.
