Big tech companies and the Chinese and American governments are embroiled in a complex relationship of harmony and conflict. We are all at the mercy of the outcome, write Cecilia Rikap and Bengt-Åke Lundvall
“Put simply, they have too much power,” US Congressman David Cicilline said of America’s big tech companies during a congressional hearing in 2020. The same year, the Chinese government announced new regulations forcing the Chinese company Alibaba to cancel the stock market listing of its subsidiary Ant Group. China subsequently ordered the cessation of Ant Group’s financial activities, leaving only its electronic payment business intact.
These struggles between states and corporations represent a complex interaction between the most powerful actors in the world. Tech giants help define their home country’s mix of nationalism and globalism. They are the bishops in their states’ long-term, strategic chess game for world power. However, tech giants are also challenging the power of their states and contributing to polarization in their home countries.
The battle is not only raging between companies and their home states. The US has denied some Chinese companies access to the US market, such as its ban on Huawei, to block its development of 5G technology. Meanwhile, the United States has pressured other countries to follow suit and exclude Chinese companies from their markets.
Google, proving its support for the United States and aware of the threat Chinese technology posed to its own business, restricted Huawei’s access to essential smartphone apps, forcing Huawei to use or develop new ones. Beyond that, the United States has attempted to prevent international scientific collaboration with China-based scholars.
The United States presents these measures as responses to unfair competition from China. Accusations of Chinese disrespect for intellectual property, state subsidies and protectionism reinforce widespread criticism of China’s political system.
China’s Great Firewall, which limits the digital operations of foreigners, is seen as particularly provocative given the importance of data collection in the race for AI. Admittedly, the firewall has been instrumental in helping Alibaba and Tencent catch up in this race.
China has also developed advanced telecommunications infrastructure, encouraged its tech companies to foster AI adoption and innovation, and fostered collaboration between industry and public universities. As China catches up in AI, Chinese tech giants are emerging. This has raised alarm bells for US tech giants and the US government.
An ad hoc group dubbed the National Security Commission on Artificial Intelligence (NSCAI) is chaired by Eric Schmidt, the former chairman of Google, and includes senior executives from Google, Microsoft and Amazon.
In 2021, the group published a report commissioned by the US government that made a strong case for techno-nationalism. The NSCAI wrote: “For the first time since World War II, America’s technological dominance – the backbone of its economic and military might – is threatened. China has the power, the talent and the ambition to overtake the United States as the world leader in AI within the next decade if current trends do not change.
The report says that most AI research and development, while publicly funded, should be done by companies and universities. He also called for stronger intellectual property rights for AI, data and biotechnology, arguing that insufficient protection has led inventors to prefer trade secrecy. This approach would benefit the tech giants: while the US government makes colossal investments in R&D, big tech would retain and reinforce the gains.
“The US Jobs Plan”, launched by US President Joe Biden in 2021, is fully in line with this diagnosis of US weakness. To defeat what is perceived as the Chinese threat, it includes US$180 billion for R&D in AI and biotechnology. Similarly, the NSCAI report suggests, “The United States should commit to a strategy to stay at least two generations ahead of China in advanced microelectronics and commit the funding and incentives to maintain multiple sources of advanced microelectronics manufacturing. in the United States.” Biden’s plan calls for a US$300 billion manufacturing subsidy, including assistance to chipmakers producing in the United States.
The interdependence between US and Chinese states and digital companies is evident in the case of surveillance. The relaxation of data governance in the United States has allowed tech giants to harvest data without restriction. In return, Google, Apple and Facebook feed data to US institutions such as the US National Security Agency. The Chinese giants are doing the same with their government. The tech giants also absorb financial wealth and technological capabilities from the rest of the world that are partly funneled back to their country of origin.
However, the techno-globalism of the tech giants sometimes clashes with the techno-nationalist goals of their home states. Research shows that these companies establish collaborations with academic institutions and companies around the world. For example, Chinese universities are among Microsoft and Amazon’s most frequent collaborators in AI science, and Tencent and Alibaba conduct much of their AI research in US hotspots. such as Silicon Valley and Seattle.
More generally, the size and mode of operation of tech giants threatens state sovereignty, even in superpowers such as the United States and China. The fact that Facebook can block US President Donald Trump’s access to its platform, which has near-monopoly status, illustrates this problem. Another example is Alibaba and Tencent taking over part of state-owned commercial banks in China.
As US and Chinese states increasingly move towards new and more extreme forms of techno-nationalism, the tech giants continue to operate globally and collaborate with organizations from the competing country. But this plays into the nations’ respective global ambitions. The tech giants remain Chinese or American citizens.
The global reach of big tech reinforces US global dominance and supports China’s ambition to challenge it. When it comes to policy recommendations, tech giants are getting “techno-nationalist.” They depend on the support of the state and their autonomy is the subject of permanent negotiations.
The global development and use of AI must be understood in light of this interaction – that of harmony and conflict between the tech giants and the American and Chinese states. These leading digital players are forming, shaping themselves and influencing the rest of the world.
Tech giants are privatizing, monopolizing and turning important pieces of technology into private assets as their respective states build new barriers to the international flow of knowledge. This undermines the global knowledge commons and open science. It reduces opportunities for innovation for other organizations and for the rest of the world. One consequence is growing income inequality and a growing global divide between producers and users of AI.
In light of pressing global challenges, new forms of global governance and knowledge sharing are needed beyond market regulations.
Cecilia Rikap is a lecturer in international political economy at City, University of London, researcher at CONICET and associate researcher at COSTECH, University of Technology of Compiègne. Bengt-Åke Lundvall is Professor Emeritus of Economics in the Department of Business Studies at Aalborg University and Professor Emeritus in the Department of Economic History at Lund University.
The authors declare no conflict of interest.