About the author
Warwick Powell
Senior Fellow of Taihe Institute
For 40 years, American "big tech" has effectively been "global big tech." US firms dominated the system hardware that carried or transmitted data across the globe. Even today, some 70% of global internet traffic continues to transit data to centers in North American Virginia. US firms dominated microprocessor manufacturing in the early days, and while chip fabrication was outsourced, American firms continue to control critical intellectual property rights in the upstream design aspects of the supply chain. US firms dominated operating systems and applications, principally through quasi- or fully proprietary systems, functioning effectively as system gatekeepers. US firms for decades dominated the processes by which global technology standards were developed and agreed, and through which the development and scaling of technologies was controlled.
All of this is changing. The entire architectural stack that conferred upon American big tech its ability to capture economic rents, and for US surveillance/security apparatuses to surveil the data of others (including American enterprises and citizens), is being challenged.
Key Elements of Digital Westphalia
An emerging technology architecture that I have described as Digital Westphalia is now unfolding. A Digital Westphalia architecture enables the progressive establishment or consolidation of digital sovereignty while enabling cross-border interoperability.
Digital Westphalia has five main features.
Digital Sovereignty
Countries determine the relevant data governance regimes, rather than technology companies. American technology, which has long acted as a form of de facto global technology, is now being circumscribed by state jurisdictions. This is done with a focus on the creation of digital ecosystems that are located and governed within specific national boundaries. The days of unregulated data flows are coming to an end. That won't help the American surveillance state, which has, so successfully, weaponized the global digital networks to date.
Such ecosystems cover the entire gamut of hardware, software, and operating systems. Such systems are not just technical systems, but are social-regulatory apparatuses that provide layers of governance that reflect the collective aspirations of communities and the needs of these communities for the creation and sustenance of systems that provide confidence in the information claims being made and shared, so that such claims form the basis of credible and functional social interactions.
Maturation of Open-Source Platforms
Proprietary systems are being challenged by open-source alternatives.
Here, ecosystems are built not on proprietary software but use open-source platforms. This enables rapid scaling and interoperability, with applications developed "on top" of such platforms to suit the needs of nations and their requirements. While certain open-source technologies, like Linux kernel, have long underpinned digitalization, others have lagged behind proprietary systems in many domains in terms of adoption and development speed. This situation may well be coming to an end. Many enterprises, particularly from China, actively embrace the possibilities and benefits of open-source technologies and platforms. Huawei and Intel were the top two contributors to the Linux kernel 5.10, the core of the Linux open-source operating systems, when as released in December 2020. Apple, Intel, Google, and NVIDIA have recently joined Baidu and Alibaba in backing the open-source chip architecture RISC-V.
RISC-V is now being mobilized by the Chinese Academy of Sciences to produce a central processing unit (CPU), as Chinese domestic chip manufacturing capability continues to develop and reliance on US-controlled alternatives is reduced. The Academy expects to deliver its XiangShan open-source CPU sometime in 2025.1
Foundations for Collective Truths
The proliferation of social media in the West, and the expansive footprint of American social media platforms globally, have contributed to the fragmentation of foundations of social truths. Truth tribes have emerged, which are consolidated and further refined through algorithms that herd people together into smaller, tighter networks based on their beliefs and so-called values. The problem isn't so much one of "free speech" versus "censorship," but one of the erosion of common knowledge as a foundation for functional social intercourse.
We have today the apotheosis of the dominance of the Simulacra Machine as the cornerstone of public cultures, in which the "sacramental order" - as French philosopher Jean Baudrillard put it - succumbs to the fictions of simulations built on simulation. As German philosopher Byung-Chul Han recently observed:
"Everything that binds and connects is disappearing. There are hardly any shared values or symbols, no common narratives that unite people. Truth, the provider of meaning and orientation, is also a narrative. We are very well informed, yet somehow we cannot orient ourselves. The informatization of reality leads to its atomization - separated spheres of what is thought to be true."2
This phenomenon has become the sine qua non of contemporary Western polities, undermining the foundations of their political settlement and institutions. Thoughtful Americans, like Tom Wheeler, former chairman of the Federal Communications Commission (FCC), writing for Brookings,3 understand the centrifugal nature of the internet (with American characteristics), as the algorithms in black boxes sort people, curate, and channel messages to tightly and statistically defined tribes, and undermine core shared notions of social truths and bonds.
Instead of systems of "truth tribes" fragmenting societies, Digital Westphalia enables common truths to be sustained as a basis of social cohesion. This dimension is intimately linked to digital sovereignty.
Increasingly, countries and peoples around the world watch in astounded horror at the disintegration of the social fabric, most evident in the United States. Information-enabled fragmentation is buttressed by and in itself reinforces the material distinctions that cut across the American political economy. While capital wealth increasingly concentrates in the hands of an ever-shrinking proportion of the population, and a growing number and proportion of households are left to struggle on private credit in the face of flatlining real income growth, information systems enable grievances to be amplified just as they are being fragmented. The splintering of society into competing truth tribes is one of the defining cultural features of the contemporary American malaise.
Digital Westphalia, made possible by alternative information architectures, provides a means by which nations can ameliorate the risks of their own social fragmentation as common truths are undermined, through a more concerted effort to design a social information system that reflects the historical experiences and expectations of their citizens.
Distributed Ledgers and Information Credibility
To address the absence of trust, distributed ledgers ensure stakeholders are collectively responsible for data integrity and no single actor can meddle with the information base. There is chronic distrust and mistrust. Creating conditions of trust is increasingly fraught. The practical alternative, in the meantime, is to create institutions that can enable the formation of functional communications and transactions in an environment of zero trust.
The emergence of distributed ledger technologies provides the means by which information in a zero-trust environment can be created, stored, and shared within nations and across borders. Distributed ledger technologies enable complex data ecologies to be designed and operationalized, so that data can function in dependable and credible ways across an entire social-economic system. Such data ecologies necessarily integrate technical and governance protocols and operational methods across the entire information supply chain - from the collection or creation of data, through to its validation and storage, and ultimately to how data is accessed, distributed, and used.
Different kinds of data demand different approaches to establishing the validity of fundamental truth claims. In sophisticated social and economic systems, one of the main approaches is for data to be validated via distinct approaches to the question of information authorities. As philosopher Julian Baggini noted in his book, A Short History of Truth, all societies have a broad range of ways in which the validity or truthfulness of certain kinds of truth claims are determined. The idea of "authority truth" is particularly relevant here, because it goes to the role of trusted entities or individuals as foundational stones in social truth systems.
Data Ecologies as Public Goods
Data ecologies as public goods designed and governed to subordinate rent-seeking interests to public interest, at national and global scales, are possible once the technological shackles of US big tech are shaken.
By treating data and its ecologies as public goods, the contrast with the data rentier economy cannot be clearer.
American Own Goals
American regulators and policymakers have been alarmed at the development of alternative technology capabilities that could challenge unbridled American information systems hegemony. The dominance of the world's information technology systems has conferred upon the US - both its corporations and its governmental-cum-geopolitical interests - distinct advantages. However, as corporations and the security state increasingly abused their position of privilege, the impetus for Digital Westphalia continued to grow. In response, US policymakers have tended to intensify the weaponization of information systems, which has acted as another catalyst for actions by others to create systems that were immune to American weaponization.
An autoimmunity response has now been triggered, which eats away at the foundations of American global information hegemony the more the kleptocratic alliance between the US Congress, the security state, and big tech seeks to preserve the status quo ante.
The Status Quo Ante
The status quo ante has been described separately by economists Cédric Durand and Yanis Varoufakis as techno-feudalism.4 In economic terms, techno-feudalism provides American big tech with rent-seeking advantages arising from a combination of intellectual property (IP) restrictions, which create barriers to entry and in time sticky ecosystems, and consequently supply chain and market dominance. Much of the world's technological architecture - the hardware and software, including the all-pervasive operating systems - has been dominated by American big tech over the past 30 years. US big tech has been synonymous with the notion of a "neutral" global technology, ostensibly providing a global public good. Indeed, in some senses, US technology has become synonymous with "global technology." That attitude remains today, as recently exemplified when Meta's founder and CEO Mark Zuckerberg argued publicly that the incoming Trump administration should lobby the EU to stop fining US technology companies.5 Market power has enabled technology firms to secure above-average profits, reduce the threat of competition, and ultimately pursue business models anchored in the notion of market dominance. Efforts to rise beyond the reach of the EU reflect an attitude of jurisdictional insouciance.
Furthermore, techno-feudalism has delivered a capacity for US firms and government regulators to exercise a disproportionate influence over an increasingly digitized globe, and with that the information ecosystems of countries globally. This is despite the fact that in recent years, US antitrust regulators have also grown concerned about the quasi-monopoly position of US tech majors, with lawsuits initiated against Google and Facebook over monopolization concerns.6
In Underground Empire: How America Weaponized the World Economy, US researchers Henry Farrell and Abraham Newman describe how the US security state has progressively transformed the global networks of fiber optic cables, routers, switches, and data centers into tools of domination.7 Amazon estimates that around 70% of global data traffic goes through the data centers concentrated in Northern Virginia.8 SWIFT - the global bank-to-bank platform - operates a data center in Virginia. The physical location of data centers has geopolitical implications.
After 9/11, the US government intensified its global "war on terror." Aside from engaging in kinetic military interventions at unprecedented levels, with an average of 3.7 military interventions per year between 1991 and 2019,9 and with over 4.5 million deaths,10 and over 37 million people displaced in post-9/11 wars,11 American intelligence agencies and various other US government departments increasingly exploited this technological reality to gather intelligence on the affairs and dealings of others around the world. In time, they began to intervene in the transnational payment systems to weaponize the US dollar international finance network.
After 9/11, the US treasury demanded access to SWIFT's data. Similar requests were previously refused, but SWIFT eventually relented. The "war on terror" shifted attitudes. The US accessed a treasure trove of real-time data on global financial transactions. Access to data was one thing, but soon, the US took the next step. Responding to suspicions that Iran was using SWIFT to transact finance for its nuclear program, US officials pushed for Iranian banks to be cut off from the global financial network.12 SWIFT yielded to pressure once more.
The weaponizing of SWIFT has now been extended to the confiscation of the US dollar reserves of the Venezuelan and Afghan governments, and the sanctioning of assorted entities and countries such as North Korea, Sudan, Belarus, and Myanmar, from being able to facilitate cross-border transactions. Russia is the most recent case.
The risks of digital censorship and malfeasance by the US have grown, globally and even within the United States itself. The personal information of US citizens has been sold by commercial data brokers to numerous government agencies over the years, including the Federal Bureau of Investigation (FBI), the US Department of Defense (DoD), and the National Security Agency (NSA), according to research by Anne Toomey McKenna, visiting professor of Law at the University of Richmond, US.13 Under techno-feudalism, commercial and state security interests have long coincided. American big tech and the US government have a shared interest in maintaining their hegemony.
Autoimmune Responses
The dispute between China and the US over 5G network technologies, involving the sanctioning of the world's leader in 5G technologies, Huawei, is perhaps the most prominent example of this protectionist mindset. The DoD's own Defense Innovation Board even publicly acknowledged in 2019 that the US had already lost first-mover opportunities in both standards and technologies worth hundreds of billions of dollars. It recommended the State rely on attacks like export controls and aggressive intellectual property protection to slow China's telecommunications ecosystem development and expansion. The Biden administration has followed through on these recommendations.
The Biden administration has sought to strangle the development of Chinese technology firms and capabilities. It implemented a regime of prohibitions and sanctions ostensibly under the rubric of "small yard, high fences." The "small yard, high fences" analogy sought to imply that the restrictive regime would be tightly focused on a relatively small array of technologies. As time went on, however, the yard became bigger and the fence higher. As China demonstrated its ability to develop a domestic technology sector capable of catching up and in due course replacing American technologies, particularly in the area of semiconductor manufacturing, Capitol Hill and the White House responded by upping the ante with more restrictions. Autoimmunity would strike again.
In response to the "chip war," China's nascent semiconductor ecosystem kicked to life. According to reports in Global Times,14 China's exports of semiconductors grew by 20.3% in the first 11 months of 2024, reaching 1.03 trillion CNY (142.17 billion USD). This year-on-year increase surpassed exports of automobiles and smartphones. China has become what some have described as a "legacy chip production juggernaut."15 This has subsequently raised concerns in Europe and America that China could in the near future dominate the legacy chip sector,16 undermining the commercial foundations of non-Chinese chip manufacturing.
Apps are now also on the firing line. TikTok has been targeted by the American Congress as a "national security risk." At the time of writing (January 16, 2025), the US Supreme Court is hearing arguments concerning the requirement imposed by US Congress that TikTok either divest its Chinese ownership or be banned from the US market. Whatever the merits of the arguments, the TikTok case exemplifies the fact that the American body politic has reached intensive levels of "securitization" of all things Chinese. As the TikTok case is heard (and is likely to be decided by the time this essay is published), the outgoing Biden administration is finalizing rules concerning motor vehicles that will effectively prohibit all Chinese passenger cars and trucks from the US market.17 American paranoia has soared to new heights, or, depending on how one views these things, descended to new depths. On December 19, 2024, a bill was proposed to the US Congress that would prohibit the US defense forces from buying Chinese garlic.18 In September 2024, US congressional committees warned of data security risks posed by Chinese cranes operational at US ports.19 There are now few limits to the "China threat/China security risk" discourse, which has activated increasingly shrill demands for more stringent actions by way of prohibitions and sanctions.
Challenges to Techno-Feudalism and Why It Matters
Greek economist and politician Yanis Varoufakis invoked the spirit of Marxist theorist Rosa Luxemburg who posed the question: after capitalism, is it socialism or barbarism? For Varoufakis, the return of the rentier economy writ large speaks of barbarism. But is this the only possibility? I have previously and continue to suggest that there are alternative possibilities - namely those associated with Digital Westphalia. The technological, economic, and political conditions of techno-feudalism are not globally ubiquitous, in large part due to the development of China's own technological competencies.
Thus, techno-feudal barbarism with US characteristics is being challenged from a number of angles. In sum, these are:
1.Open-source platforms are enabling alternative ecosystems for developers and users to emerge.
2.Alternative ecosystems are emerging in China, where market scale enables critical mass to deliver cost efficiencies unrivalled elsewhere. These ecosystems support the expansion and maturation of open source ecosystems, which have been able to evolve from being relatively "fringe" to being backed by corporations with market and budget heft.
3.Longstanding investments in skills outside the US through education are also creating a pipeline of the necessary skills and know-how to drive future non-US information technology systems forward. By way of contrast, the US education system has lagged and the US technology sector has become dependent on specialized migrant workers.
4.The securitization of technologies and applications by the US Congress has, ironically, unleashed a mentality amongst legislators that American big tech needs to be protected from Chinese systems, which reinforces global concerns about the omnipotence of US big tech in the first place. The securitization of technology leads to increasing efforts to ban technologies in the US.
These alternatives matter because they are part and parcel of the wider transformations to the global geopolitical economic landscape. Just as trade and investment patterns have been evolving to de-center the colonial economic and political axis of the US and Europe, new technological conditions make it possible for nation states to assert the possibility of a more sovereign trajectory.
The possibilities of data sovereignty reduce the risk to which sovereign nations can be interfered with by external forces. Without sovereign control over one's data ecology, nations will always be exposed to interference and assorted forms of political and corporate malfeasance from malicious actors, including other nation states. The architecture of data sovereignty also lays the foundations for de-risking from an increasingly weaponized global payments system, historically anchored by the US dollar and operationalized across the SWIFT messaging network. Lastly, data sovereignty is foundational to nation states being able to create information ecologies that are less prone to the centrifugal tribalization of truths that is undermining social cohesion in the US and other Western societies, and create information ecologies that deliver to their citizens a robust foundation of domestic and international common truths upon which they can interact with each other.
Technological change has powerful economic and geopolitical implications. But perhaps more profoundly, technological changes go to the heart of the information verisimilitude that is central to a functional society. The choice is indeed between the barbarism of a system architecture dominated by the data rentier and social fragmentation on the one hand, and, on the other, a Digital Westphalia that enables national sovereignty to be asserted in the creation and sustenance of information systems that support social cohesion and common welfare.
Barbarism is neither the only option nor is it inevitable.
1. Xinmei Shen, "Chip War: Chinese Scientists Vow to Launch Breakthrough RISC-V Open-Source CPU in 2025," South China Morning Post, January 6, 2025, https://www.scmp.com/tech/tech-war/article/3293610/chip-war-chinese-scientists-vow-launch-breakthrough-risc-v-open-source-cpu-2025.
2. Byung-Chul Han, "All That Is Solid Melts into Information," interview by Nathan Gardels, April 21, 2022, https://www.noemamag.com/all-that-is-solid-melts-into-information/.
3. Tom Wheeler, "Technology, Tribalism, and Truth," Brookings Institution, February 7, 2022, https://www.brookings.edu/articles/technology-tribalism-and-truth/.
4. Cédric Durand, How Silicon Valley Unleashed Techno-Feudalism (New York: Penguin Press, 2024); Yanis Varoufakis, Technofeudalism: What Killed Capitalism (New York: Penguin Press, 2024).
5. Aitor Hernández-Morales, "Zuckerberg Urges Trump to Stop the EU from Fining US Tech Companies," POLITICO, January 11, 2025, https://www.politico.eu/article/zuckerberg-urges-trump-to-stop-eu-from-screwing-with-fining-us-tech-companies/.
6. Kean Birch and D. T. Cochrane, "Big Tech: Four Emerging Forms of Digital Rentiership," Science as Culture 31, no. 1 (May 26, 2021): 44–58, https://doi.org/10.1080/09505431.2021.1932794.
7. Henry Farrell and Abraham Newman, Underground Empire: How America Weaponized the World Economy (New York: Henry Holt and Co., 2023).
8. Alan Yu, "Data Centers Transformed Northern Virginia's Economy, but Residents Are Wary of More Expansion," WHYY, June 28, 2024, https://whyy.org/segments/northern-virginia-residents-are-wary-of-more-data-centers/.
9. Monica Duffy Toft and Sidita Kushi, Dying by the Sword: The Militarization of US Foreign Policy (Oxford: Oxford University Press, 2023).
10. Stephanie Savell, "How Death Outlives War: The Reverberating Impact of the Post-9/11 Wars on Human Health," Watson Institute for International and Public Affairs, May 15, 2023, https://watson.brown.edu/costsofwar/files/cow/imce/papers/2023/Indirect%20Deaths.pdf.
11. David Vine et al., "Creating Refugees: Displacement Caused by the United States' Post-9/11 Wars," Watson Institute for International and Public Affairs, September 21, 2020, https://watson.brown.edu/costsofwar/files/cow/imce/papers/2020/Displacement_Vine%20et%20al_Costs%20of%20War%202020%2009%2008.pdf.
12. "US Pushes EU, SWIFT to Eject Iran Banks," Reuters, February 16, 2012, https://www.reuters.com/article/iran-usa-swift-idUSL2E8DFKG120120215/.
13. Anne Toomey McKenna, "US Agencies Buy Vast Quantities of Personal Information on the Open Market - A Legal Scholar Explains Why and What It Means for Privacy in the Age of AI," The Conversation, June 29, 2023, https://theconversation.com/us-agencies-buy-vast-quantities-of-personal-information-on-the-open-market-a-legal-scholar-explains-why-and-what-it-means-for-privacy-in-the-age-of-ai-207707.
14. "China's Export of Semiconductors Tops 1 Trillion Yuan in First 11 Months Despite US Curbs," Global Times, December 10, 2024, https://www.globaltimes.cn/page/202412/1324739.shtml.
15. Aaron Klotz, "US Sanctions Transform China into Legacy Chip Production Juggernaut - Production Jumped 40% in Q1 2024," Tom's Hardware, April 18, 2024, https://www.tomshardware.com/tech-industry/semiconductors/us-sanctions-transform-china-into-legacy-chip-production-juggernaut-production-jumped-40-in-q1-2024.
16. Tim Rühlig, "China's Growing Legacy Chip Production - A Challenge for Europe?," European Union Institute for Security Studies, December 12, 2024, https://www.iss.europa.eu/publications/commentary/chinas-growing-legacy-chip-production-challenge-europe; Ashley Belanger, "China's Plan to Dominate Legacy Chips Globally Sparks US Probe," Ars Technica, December 24, 2024, https://arstechnica.com/tech-policy/2024/12/chinas-plan-to-dominate-legacy-chips-globally-sparks-us-probe/; Lionel Lim, "China Is Poised to Dominate the Market for Legacy Chips, and the US May Only Have Itself to Blame," Fortune, July 6, 2024, https://fortune.com/asia/2024/07/05/china-poised-take-over-legacy-chips-mature-nodes-us-semiconductor-export-controls/.
17. David Shepardson, "Biden Administration Finalizes US Crackdown on Chinese Vehicles," Reuters, January 14, 2025, https://www.reuters.com/business/autos-transportation/biden-administration-finalizes-us-crackdown-chinese-vehicles-2025-01-14/.
18. Stephen Groves, "New Bill Bans US Military from Buying Garlic from China," Fortune, December 19, 2024, https://fortune.com/asia/2024/12/19/senate-prohibits-military-china-goods-garlic-drone-technology-defense-bill/.
19. Ionut Arghire, "House Report Shows Chinese Cranes a Security Risk to US Ports," SecurityWeek, September 13, 2024, https://www.securityweek.com/house-report-shows-chinese-cranes-a-security-risk-to-us-ports/.
This article is from the January issue of TI Observer (TIO), which delves into the concept of "technological sovereignty," examining the political dynamics behind the TikTok sale-or-ban law, and exploring the delicate balance between national security, enterprise freedom, and global technological cooperation. If you are interested in knowing more about the January issue, please click here:
http://en.taiheinstitute.org/UpLoadFile/files/2025/1/26/1041397474f018444-a.pdf
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