Dear Reader,
In an unexpected turn, this month, the Supreme Court of the United States ruled that the Trump administration’s unilateral tariff measures were unlawful. The decision stands as a welcome reminder that a measure of judicial independence endures within the American legal system. Yet it also risks deepening uncertainty in an already fragile global trading order. After a year of fraught negotiations — often over sensitive aspects of the digital economy — many countries had seemed to reach a tentative accommodation, restoring a degree of stability to their commercial relationships.
However, the new ruling fundamentally alters the calculus underpinning these agreements. Many governments will understandably conclude that they made concessions in vain, while businesses across the United States are now seeking hundreds of billions of dollars in compensation for lost profits. More significantly, this opens up space for countries to move towards alternative political arrangements that can mitigate the unchecked power of American influence. In the digital trade context, especially, there are opportunities on the horizon. The 14th Ministerial Conference of the World Trade Organization is scheduled for late March, and the moratorium on Electronic Transmission has long been a cause of contention, particularly for countries in the South. To dispose of the moratorium would facilitate new ways for countries around the world to tax Big Tech and justly claim a share of the value being generated by their own data. Given that the US itself has effectively antagonized the WTO as well, it would also be a fitting rebuttal to the extortionary posture it has adopted in recent months. Of course, whether the various member states will have the foresight to work together on this remains to be seen.
In other news, the major tech story in February has been Anthropic’s new Claude Code releases and the ensuing financial upheaval. The company first put out a Claude CoWork platform to make its new AI agent more accessible. This was soon followed by specialized legal and cybersecurity plug-ins that make it easier for Claude to service these business needs. Markets reacted swiftly and dramatically. Investors interpreted these moves as an existential threat to traditional enterprise software providers, triggering a sharp sell-off across the sector. In the space of days, close to a trillion dollars was wiped from the market capitalisations of global software firms, with growing concern about their continued viability.
The capacities of these new agents are impressive, but it is worth pointing out that many analysts — and indeed prominent voices in the tech community — have claimed that the market meltdown was unwarranted. The ability to generate functional code is still far removed from delivering deeply customised, mission-critical systems on which entire business verticals depend. A substantial gap remains between today’s AI agents and the wholesale displacement of established software companies.
If that assessment proves correct, the episode underscores the extraordinary fragility of current market sentiment: even a remote possibility is sufficient to trigger significant panic. Much of this volatility reflects the enormous sums now tied up in artificial intelligence, as well as the profound uncertainty surrounding its long-term economic consequences.
On one side sits the hype machine. Strategic releases such as Claude Code reinforce the narrative of AI as an unprecedented disruptor and engine of extreme automation. While there is a genuine strain of techno-doom in this discourse, many companies appear willing to indulge this sentiment to capture investor imagination. Executives continue to flirt with talk of AI singularity and existential risk, sustaining an atmosphere of awe and anxiety in equal measure. The recent ‘Moltbook’ episode illustrates the dynamic. A developer created a message board ostensibly for AI agents to converse with one another. The result was a torrent of content, from banal reflections to ersatz religious sects and grandiose manifestos for world domination. These outputs were widely circulated as evidence of AI’s near-sentient qualities, until it emerged that most of the posts had in fact been scripted by humans.
On the other side, doubts are mounting over whether the technology can justify the speculative fervour that has propelled it. A major study released this month, surveying firms across the United States, the United Kingdom, Germany, and Australia, found that while roughly 70 per cent reported adopting AI tools, nine in ten had yet to record meaningful productivity gains. At the same time, fresh reporting has highlighted the obstacles confronting efforts to scale the data-centre infrastructure required to power AI. From local pushback to funding issues to difficulties in the construction process, a slew of factors are causing major delays and cancellations. This is compounded by new investigations into the financial arrangements undergirding these projects, hinting at the considerable precarity at the heart of many leading AI businesses.
Caught between these competing narratives, the stock markets seem destined for continued volatility. Yet the dilemma extends well beyond investors. Governments increasingly feel compelled to articulate coherent AI strategies, wary of being left behind in a technological shift that could shape the future contours of economic and geopolitical power. This month alone, countries as varied as Pakistan, Slovenia and Chile unveiled fresh initiatives to strengthen their near-term AI capabilities. Meanwhile, more established economies, including Germany and the Netherlands, are weighing additional measures to bolster “AI sovereignty” and help domestic industries close the gap.
In keeping with these impulses, the end of February saw the latest edition of the Global AI Impact Summit take place in New Delhi. The gathering marked another milestone in the growing assertion of Global South countries seeking to shape the global AI agenda. Indeed, in its framing, it signalled a conscious effort to foreground discussions on inclusion, infrastructure financing, and the equitable distribution of value. The event itself offered a window into the competing visions of the majority world’s place in this technological revolution. On one level, there was a push toward a burgeoning alliance among countries of the South, particularly as India and Brazil announced plans to collaborate on critical minerals, AI, and digital governance more broadly. On another, representatives of Big Tech made their pitch for prolonging the status quo, unveiling new partnerships with local firms and pledging billions more in investments for countries of the periphery. The political significance of these intersecting currents demands careful unpacking, and in the coming month, we hope to offer a more detailed and substantive analysis of these developments.
The Datasyn Team
