Trump’s constant back-and-forth on tariffs has represented a rather momentous break in the aspirationally frictionless world of global trade. These all-encompassing tariffs have been used to extract specific deals and concessions from other countries, some of which are relevant to the tech sector. The most egregious present example is perhaps the case of Brazil, which is being pressured by Trump into shedding regulations on American Big Tech. India, too, has been successfully pressured into dropping a 6% tax on digital advertisements on foreign tech platforms, and the never-ending clash between the US and the EU concerning the Digital Services Act has only accelerated under Trump 2.0. Further, while tariffs have not actually been applied to digital service exports themselves, this is far from set in stone, as American trade policy today is nothing if not capricious: whimsical, even.

This general economic volatility has naturally sparked concern and has forced more or less the entire world to accelerate taking stock of precisely where it stands with respect to American Big Tech. These concerns are, of course, not novel, and have been rather topical for the past two decades, given Big Tech’s meteoric rise — a phenomenon that has sparked a range of different “digital sovereignty” programs outside the United States. Notable amongst these is China, whose tech stack is (almost) entirely self-contained, the most extreme such example of sovereignty. In the EU, these programs remain more or less entirely theoretical, such as with the EuroStack. In India, these narratives of sovereignty have tended to revolve around domestically developed software (with little attention paid to the continued reliance upon American cloud providers), while Brazilian discourse has tended to revolve around the regulation of foreign platforms.

Regardless of how both these narratives and concrete manifestations of sovereignty develop, it is important to examine the political economy of the tech sector itself, sovereign or otherwise. Technology is embedded within a specific set of social relations. These relations, in turn, end up shaping the manner in which this technology develops and who reaps the benefits from its deployment.

Why we love tech

It isn’t hard to see why tech work is upheld as the ideal pathway towards economic growth in much of the Global South today. Ostensibly free of the myriad complexities of industrial policy and machinery costs, and questions surrounding land ownership, tech work can easily be cast as a “clean”, “immaterial” way to make the GDP line reliably go up. A large part of this is through an infusion of U.S. dollars, particularly in countries like India and the Philippines — a developmental model that does very little to address the fact that these productive capacities in the global South remain geared towards producing cheap digital commodities for the global North. Further, unlike with the global division of labor in manufacturing that characterized the rapid growth of the Chinese economy, there is very little need to invest in the kind of labor that building and maintaining physical infrastructure requires. This has sparked a near-global dearth of well-qualified civil engineers, tooling experts, and skilled technicians, making the hope of even the incidental construction of housing and healthcare systems and affordable public transport a distant pipe dream. The temptations of the digital economy, in short, serve as a distraction from the fact that we do not live in a world that is entirely composed of bits and bytes.

The neoliberal tendency towards offloading all social reproduction onto the private sector makes this a particularly sore point: it is simply no longer profitable to build houses or basic infrastructure, and nation-states all over the world have washed their hands of the responsibility of doing so themselves.

The profit margins within the digital economy tend to balloon well in excess of other sectors, even when outsourcing is taken out of the picture, which means that broad societal surplus sees continuous reinvestment into the very same economy. The neoliberal tendency towards offloading all social reproduction onto the private sector makes this a particularly sore point: it is simply no longer profitable to build houses or basic infrastructure, and nation-states all over the world have washed their hands of the responsibility of doing so themselves. The question that remains, of course, is why these sky-high profits seem to persist within the digital economy. Despite the constant techno-optimism that we are bombarded with every single day, the clear disconnect between the accumulation of capital in the tech sector and the production of actual use-values has grown rather apparent to all concerned, both within and outside the United States. This has, in turn, sparked some fairly provocative analyses: a popular one being that we no longer live under capitalism. Theorists as diverse as media scholar McKenzie Wark, Greece’s former Minister of Finance Yanis Varoufakis, and veteran political theorist Jodi Dean have all been proponents of the idea that we are living in an epoch that is rapidly progressing or reverting to a particularly perverted, post-modern feudalism.

Theorists as diverse as media scholar McKenzie Wark, Greece’s former Minister of Finance Yanis Varoufakis, and veteran political theorist Jodi Dean have all been proponents of the idea that we are living in an epoch that is rapidly progressing or reverting to a particularly perverted, post-modern feudalism.

Without leaping to these bold conclusions, it is worth at least examining precisely what drives accumulation in the tech sector. At the core of it is the widespread hegemony of digital platforms: of sprawling infrastructures that draw in users and provide some sort of digital service. Nick Srnicek’s Platform Capitalism is an early, useful taxonomy of these platforms—salient amongst which are advertising platforms that draw most of their revenue from data-driven targeted advertising (Facebook or Instagram); cloud platforms, that provide rental access to cloud infrastructure (Amazon Web Services, Microsoft Azure); and lean platforms, that simply act to coordinate on-demand labor (Uber, Doordash). Machine learning platforms, the current hype-driven magnet for financial capital, are the latest iteration of the same theme.

The dynamics of accumulation

The motor of these platforms is an evolving yet highly specific synthesis between financial capital and Big Tech. In the current epoch of capital accumulation, tech firms, big and small, see immense amounts of capital poured into them by a diverse cast of characters tasked with economic coordination: private equity, venture capital, and even state actors. In turn, they strive to subject an ever-increasing range of social phenomena to the logic of the commodity form, from taxis to spare bedrooms to people’s sex lives. Simultaneously, their underlying infrastructures are scaled up without pause: through building out vast logistics webs, server farms, energy infrastructures, and so on. And to top it all off, these investments are de-risked by national governments that work to create the conditions that ensure that capital does not face any consequences for its failure to deliver.

Thus, while this process of scaling is often immensely unprofitable in the medium-term, easy access to capital allows these companies to absorb these losses, in the process establishing a quasi-monopoly over the provision of particular services, eventually rendering themselves indispensable — and, importantly, profitable, thereby assuaging investor anxieties. The titans of the tech sector themselves are under no illusions about any of this: consider, for instance, how Peter Thiel has been perfectly happy to proclaim that “competition is for losers”.

Beyond simply gaining the ability to attract colossal profits through quasi-monopolistic service provision, these firms also gain colossal power over labor. Indeed, one of the immediate side-effects of the everything-as-a-service economy has been the imposition of a myriad novel forms of algorithmically-managed labor discipline upon an increasingly precarious working class. This has been a consistent pattern where these platforms have made their mark, North or South. From the United States to Germany, from Brazil to India, the post-industrial economy appears to be rapidly turning into one of “side-street barbers, domestic servants, fruit-cart vendors, and Walmart shelf stackers”, to quote economic historian Aaron Benanav. Attempts to subvert this do exist — such as a string of worker-run platform co-ops in Brazil, or a spate of successful trade union actions in Mexico and the EU. Yet, it remains to be seen how these efforts hold up in the face of the broader structural imperative to turn profits. Indeed, the discourses of the post-zero-interest-rate policy (ZIRP) tech-boom period have seemingly gone global, as indefatigable techno-optimists frame new technology (such as generative AI) as the solution to economic stagnation, with “builders” and “entrepreneurs” upheld as the heroes that will see us through the crisis. And while the Chinese state has been seen as an actor capable of disciplining the most parasitic tendencies of the platform capitalists, this is only to the extent that it benefits other capitalists: never labor itself.

The way forward

In Rentier Capitalism, political geographer Brett Christophers makes a particularly useful intervention vis-à-vis the notion of rent—describing it as income drawn through the ownership of scarce assets under conditions of little to no competition. Armed with such a lens, it rapidly becomes clear that the profits due to the digital economy do not necessarily stem from some equivalent provision of use-values to civilians, but rather from the very specific nexus of finance and tech that enable these firms to construct sprawling infrastructures, which in turn allow them to lay claim to a vast share of societal surplus. This is where naive domestic developmentalist discourse falls short. By claiming that a sovereign tech sector is intrinsically a good thing, because it implies a domestic accumulation of capital, this discourse ends up naturalizing (even boosting) the sheer volume of capital drawn to this sector as an outcome of the objective laws of the free market.

If programs for digital sovereignty are to deliver meaningful use-values to citizens of the global South, we must begin with an honest discussion of who gets to plan this economy, and who owns the infrastructures upon which it runs.

Thus, while narratives of digital sovereignty are all well and good, what remains a lot murkier is the question that we began with: the path of development this sovereign technology could even follow, when constrained by the profit motive and private ownership. While Big Tech firms have thus far tended to be (mostly) American, the rest of the world must be wary about merely replicating this model as-is. If programs for digital sovereignty are to deliver meaningful use-values to citizens of the global South, we must begin with an honest discussion of who gets to plan this economy, and who owns the infrastructures upon which it runs. Ultimately, as long as profit continues to drive the system, merely replacing American profiteering with domestic profiteering will do little to stave off the eminently visible issues within the digital economy: accelerating the already evident, near-gratuitous exploitation of labor. It will do little to stop the cities of the Global South from turning into fiefdoms for a shrinking elite, their lifestyles supported by a bevy of five-minute delivery platforms and rideshare scooters, as capital increasingly gains control over the critical infrastructure upon which society runs.