States vs. silicon: The global balance of power
The 21st century’s defining contest pits global technology giants against increasingly assertive national governments.
In a nutshell
- Big Tech’s rise has shifted economies, values and allegiances
- Trump’s presidency is reasserting state power
- AI is emerging as the next decisive battleground
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Elon Musk, by claiming he would form the America Party, personifies the tug-of-war between giant technology companies and nation-states over who really governs 21st-century life.
For the past two decades, the most influential people on the planet were not monarchs, presidents or prime ministers, but a tight cohort of tech founders. Amazon told us what to buy, Google decided what we learned, Meta mediated our friendships, Netflix filled our evenings, and Apple put all of it in our pockets. Their companies managed logistics chains stretching over 60 countries. This tech web became the most efficient wealth-creating apparatus the world has ever seen. Accordingly, their founders and top executives became the wealthiest and, in many ways, the most powerful people in the world.
Meanwhile, elected governments across the globe looked increasingly geriatric, their initiatives underwhelming and outdated. While an iPhone anticipated its users’ next need, Canada’s “ArriveCAN” border app left travelers stranded at airports. Germany’s 7 billion-euro Berlin airport opened a decade late because the fire-alarm software would not communicate with the smoke vents. The United Kingdom’s National Health Service still lists fax numbers for specialist referrals and Japan’s health ministry filed Covid-19 statistics by fax until 2023. The United States Veterans Affairs Department stores patient data on 1980s COBOL systems. No wonder bright graduates in London, Tel Aviv or Austin prefer stock options to civil-service exams.
Yet by mid-2025, the balance of power may have turned. Few now dispute that the single most powerful person alive is Donald J. Trump – an elected official who can collapse or resurrect markets and start or end wars solely through social media posts.
Is this just a blip in the inevitable rise to power of those who control technology, or the template for a wholesale restoration of state supremacy? Does the global race for artificial intelligence change this power struggle? And are we likely to see these two worlds – politics and technology – merge, like Mr. Musk’s envisaged political party or Mr. Trump’s social media platform? To answer these questions, we need to trace the arc of Big Tech’s ascent, the backlash it provoked, and the way Mr. Trump’s second presidency is pulling power back within national borders.
The rise of the platforms
From the first iPhone in 2007 to the ChatGPT boom of 2023-2024, technology has permeated almost every daily activity, and four long-term shifts followed.
Physical → Online
Western adults now spend 6.5 hours per day on internet-connected devices. Remote and hybrid work models – normalized by Covid-19 – have become the status quo. More than 50 countries issue digital-nomad visas, and software development company GitLab does business with 2,000 staff across 70 jurisdictions with no headquarters at all.
Industry → Services
The economic derivative of the online trend was an acceleration of the shift from industrial to service-based economies. Cities like New York, San Francisco, London and Tel Aviv filled up with software jobs, while Detroit, Cleveland and Sunderland watched their factories close. Services now produce about 80 percent of value added in the U.S., 78 percent in the UK and 70 percent in Germany, up from barely 60 percent in the aforementioned countries in 1990. Talent, tax revenues and political attention migrated accordingly.
Conservative → Liberal values
Platform culture rewarded self-presentation and choice, legitimizing fluid identities in gender and community. Platforms like Tumblr, Reddit and Discord have lowered the cost of forming networks around identity, sexual orientation and lifestyle, and made it easier to find like-minded people, mobilize supporters and publicize norms that favor individual autonomy and diversity.
National → Global allegiance
In the digital and hyperconnected world, national borders have become far less important. Project teams now span time zones, and digital-nomad visas have gone mainstream – with remote workers in countries from Spain and Portugal to the United Arab Emirates and New Zealand. Bitcoin and stablecoins challenge the state monopoly on fiat money, and Worldcoin uses iris scans, collected via a device called “The Orb,” to create a global identification system that one day can replace passports.
These trends benefited individuals, consumers and shareholders but also fueled resentment from those who felt that they were on the losing side of these transformations – with dwindling economic options and celebrated values that did not match their own.
When anger becomes electoral power
Exit polls in November 2024 showed that two-thirds of white American voters without college degrees – the group once assured of union pay at manufacturing plants – backed Mr. Trump for president. In focus groups, they cited “Silicon Valley elites” and algorithmic job cuts as proof that the system was rigged. President Trump promised to bring back American jobs, block immigration and restore “two genders, two bathrooms.” Enough people believed him to deliver 312 Electoral College votes.
Then on January 20, the chief executives of Apple, Google, Meta, Microsoft, Amazon and Tesla sat in the front row of President Trump’s second inauguration. The snapshot conveyed a clear message: Silicon Valley kneels.
Compliance followed. Many tech companies quickly rolled back or scrapped their diversity, equity and inclusion (DEI) policies after President Trump took office. Alphabet deleted staff-diversity targets; Meta shelved a $150 million racial-equity fund; IBM replaced “racial quotas” with a “veterans and skills” pledge. These moves were all triggered by executive orders making federal contracts contingent on eliminating DEI frameworks.
The state’s two monopolies
President Trump moved beyond photo ops and DEI rollbacks to wield the two levers that a corporation can never match: trade policy and the powers of law enforcement.
A single social media post unveiled a blanket 10 percent tariff and China-specific duties as high as 145 percent. Apple’s China-assembled iPhones suddenly cost billions more to produce, and Walmart warned customers could pay 8 percent extra at checkout.
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Meanwhile, the president flexed the state’s monopoly on law enforcement just as aggressively. U.S. Immigration and Customs Enforcement (ICE) logged more than 150,000 arrests in his first 100 days after expedited-removal rules were extended nationwide, sharply contrasting just over 6,000 ICE arrests in the first 100 days of President Joe Biden’s term. President Trump even mused aloud about deporting select U.S. citizens for “treasonous tech collusion.”
Musk’s America Party: Disrupter or footnote?
In the first months of 2025, it seemed there was a bridge between the tech world and the Trump administration in the form of the partnership with Mr. Musk. The Department of Government Efficiency (DOGE) initiative even promised to bring tech efficiency into government bureaucracy, and it looked like power was drawn to power. But this honeymoon did not last. After Mr. Musk criticized the One Big Beautiful Bill Act, calling it a “disgusting abomination,” President Trump retorted by saying, “Maybe it is time he went back to where he came from.” The Tesla chief learned that a partnership with power hinges on obedience.
The Tesla chief learned that a partnership with power hinges on obedience.
Early July brought the next twist: Mr. Musk announced a third force – the America Party – branding it as a home for “the 80 percent in the middle.” Rather than funnel cash to political action committees, he aimed to convert network capital – 224 million followers on X, millions of Tesla owners and fans and millions more watching SpaceX webcasts – into votes. So far, there is no indication this party will ever be on the ballot.
The AI front: The next battlefield in the power struggle
If tariffs and social-media regulation were the opening skirmishes in the battle between the state vs. silicon battle, the decisive clash will almost certainly unfold around AI. Generative AI models already threaten to disrupt entire industries and professions; many researchers speak openly of an eventual artificial general intelligence (AGI) – a system that can outperform humans across most tasks. Nothing so powerful has ever been developed, let alone almost entirely within private campuses funded by venture capital.
Today, the cutting-edge AI models sit inside tech giants: OpenAI, Google DeepMind, Anthropic, Meta and a handful of Chinese labs train models on clusters of tens of thousands of graphics processing units (GPUs). Yet one can easily imagine a moment when a future ChatGPT-8 or a Gemini Ultra-2 is deemed too strategic to remain a corporate asset.
In Washington, voices already argue that an entity capable of steering markets, causing a surge in unemployment and cracking encryption belongs under national command, much like nuclear reactors or stealth bombers. Just last week, the Trump administration agreed to take over a 10 percent stake in chipmaker Intel. The talking points are ready-made: national security, job protection, privacy and electoral integrity.
If the U.S. administration threatens a forced licensing regime, other capitals may follow. Brussels would frame it as “digital sovereignty,” Beijing could fold key labs into state-owned champions; even mid-sized powers like Israel or Singapore may demand a golden share in any model trained on domestic data. Whether full nationalization or merely the imposition of export licenses and kill-switch mandates, the balance-of-power question tightens: Who controls the source code that could one day control everything else?
Scenarios
Three scenarios are possible, with the first scenario – governments and tech titans each staying largely in their domain – being more probable. Nevertheless, the flank possibilities are no longer fringe. They may trigger each other, and with President Trump’s tariffs and Mr. Musk’s proposed party, the first shots may have already been fired.
More likely: Cohabitation and balance of power
Tech titans stay in the commercial lane, national governments stay in the political lane, and both sides keep a wary balance. Legislatures impose guardrails – GDPR-style privacy laws, export-control tweaks – while tech leaders limit their involvement in the political process to donations and lobbying. Tariffs sting but do not break businesses; AI models remain corporate IP under government oversight. This still rewards consumers with innovation and gives politicians headline wins.
Possible: The state strikes back
Alarmed by AI’s disruptive power – or another social‑media crisis – governments declare the technology a “strategic asset.” Washington could invoke the Defense Production Act to take an equity stake in, or even nationalize, leading labs; Brussels and Beijing copy the playbook. Chips and data sets become subject to export licenses; private research and development budgets are folded into public-sector programs. Silicon Valley fights in court but ultimately loses autonomy, becoming a contractor to the state.
Possible: Tech enters politics
Confronted by punitive rules or simply emboldened by Elon Musk’s precedent, one or more tech giants launch or bankroll full-fledged political parties. Leveraging unlimited cash, ubiquitous channels and granular voter data, they win seats – perhaps even ministries – shattering the old fundraise-and-lobby cycle. Government becomes a new business unit; regulation turns into self-regulation. The backlash could be equally dramatic: anti-trust breakups or constitutional amendments to curb corporate candidacies.
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