Big Tech Embraces New Cold War Nationalism
China’s rise has pushed Silicon Valley away from the values it once claimed to hold.
Last month, the CEOs of Google, Apple, Facebook, and Amazon were hauled before the U.S. Congress to be interrogated about their companies’ monopolistic behavior. While Democrats relentlessly grilled the four CEOs over their breach of antitrust laws, Republicans were just as interested in questioning their national loyalty and asking whether they had ties with the Chinese military. At the hearing, Republican Rep. Ken Buck accused Google of declining to work with the U.S. Defense Department while falsely claiming that the company collaborated with the Chinese military. In response, Google CEO Sundar Pichai fought nationalism with patriotism, stating that Google was in fact “proud to support the U.S. government” and boasted that they had “recently signed a big project with the Department of Defense.”
Coming from Pichai, the immigrant CEO of a company known for its progressive values, boasting of Google’s collaboration with the Pentagon may just seem like a defensive response to being called treasonous. But Google’s commitment to the military had long preceded this moment. The company’s former CEO, Eric Schmidt, has long advocated for deepening ties with the Pentagon and now serves as the chairman of the Defense Innovation Board—an initiative to transfer technological innovation from Silicon Valley to the U.S. military. Last month, a federal advisory commission that Schmidt chairs also recommended the creation of an artificial intelligence (AI) school to directly staff the U.S. government, including the Defense Department, with new technologists.
Google is far from alone. Late last year, Microsoft won a $10 billion cloud contract with the Pentagon with the goal of “increasing [the military’s] lethality.” Amazon, which also fought aggressively for the $10 billion contract, continues to provide cloud infrastructure for the CIA and U.S. Immigration and Customs Enforcement.
Underpinning this new affinity for the U.S. government is a widespread anxiety that the rise of China’s tech industry may spell the end of Silicon Valley’s dominance. In the past year, the tech investor Peter Thiel and Schmidt himself both wrote New York Times op-eds with the same warning: Silicon Valley must start working with the Pentagon, or else China will win.
Big Tech’s hostility toward China is a relatively new phenomenon. In 2017, Google opened an AI lab in Beijing, professing that “AI and its benefits have no borders.” In 2016, Facebook founder Mark Zuckerberg was eager to tap into China’s massive advertising market, aggressively courting China with newly developed censorship tools to appease Chinese officials.
But as U.S. President Donald Trump pins the blame for the pandemic on China and engages in tit-for-tat escalations over Hong Kong, the already tumultuous U.S.-China relationship has reached a new low. Tech executives have fallen in line, coalescing behind anti-Chinese rhetoric and using Chinese encroachment to justify military contracts and stave off regulations. Last year, Amazon CEO Jeff Bezos warned that the country could be “in trouble” if the industry turned its back on the Pentagon. Zuckerberg, just three years after courting China with censorship tools, urged U.S. lawmakers to stop trying to regulate Facebook’s new digital currency, Libra, otherwise the spreading of America’s “democratic values and oversight around the world” through financial leadership would be at risk.
But beneath the appeal to nationalism to duck regulation is the deeper ideological question of how Silicon Valley must act to stay ahead of China’s booming tech industry: For many years, Silicon Valley’s global success has represented the triumph of a progressive Western neoliberalism over China’s authoritarian capitalism. Google became the cornerstone of innovation, while Chinese tech companies—whose names most people couldn’t even recite—were relegated to mere copycats. But with the rise of Alibaba, Tencent, Huawei, and many more, Silicon Valley’s global order has come into question.
For most of the internet’s history, the West dominated the online world. Embodying a mix of social progressivism and economic conservatism—known as the Californian Ideology—Silicon Valley became rulers of the open internet and champions of the free flow of information. By delivering free services on an open internet, the illusion of Silicon Valley’s benevolence went unquestioned. Google’s old tagline “Don’t be evil” epitomized this.
While the rhetoric of “free and open” became synonymous with the internet itself, Silicon Valley saw the internet as the perfect medium for the free market; transactions occurred instantaneously, and borders didn’t exist. Neoliberalism, in other words, went online.
Indeed, like other multinationals, Silicon Valley companies also relied on the strong hand of U.S. policies to forcefully integrate developing countries under the neoliberal auspices of deregulation, privatization, and liberalization. Backed by the deep pockets of the U.S. federal government and the military, internet companies operated online services overseas for free, dominating those markets and making them inhospitable for domestic competitors to arise.
Facebook is the perfect example. In 2012, as Facebook’s overseas user base grew to 80 percent of total users, the company not only evaded paying taxes on its $1.1 billion in profits but also received a tax refund of $429 million by the U.S. government. Furthermore, the company’s early entry to many developing nations secured its position as the top social media platform, leaving little space for domestic upstarts to challenge its hegemony. Google, as the dominant search engine in most countries, has also acted as an effective gatekeeper, dictating which businesses get to be seen and which don’t. In 2015, the Indian entrepreneur Asif Ali wrote in a blog post that Google was “killing the innovation in the [local] market” and that the company’s “stranglehold in the market is sounding the death knell for many a publisher” in India.
Yet despite these nefarious practices, both tech giants have cunningly marketed themselves as champions for progressive values. Zuckerberg in 2013 declared that the internet was a human right (hoping that people wouldn’t pick up on the simple algebra that more people online would mean more ad revenue for Facebook), while Google became the poster child for a modern and progressive company. As such, this ethos of an open and free internet allowed Google, Facebook, and countless other Silicon Valley companies to slip into foreign countries completely unregulated, creating new online markets that they would then monopolize. As American tech companies seemed unstoppable, China’s statist approach lagged behind.
Today, the tables have turned. Chinese tech companies have bloomed into formidable competitors and are finally in a position to challenge an otherwise completely Western-dominated internet. Despite massive growth among U.S. tech giants during the pandemic, the Chinese telecommunications firm Huawei has become the largest mobile phone vendor (overtaking Apple and Samsung), while Tencent has surpassed Facebook to become the world’s most valuable social media company. Facebook’s subsidiary Instagram has also launched a TikTok copy after the popular video app eclipsed Instagram in the total number of smartphone downloads last year.
All this confirms the worst fears of Silicon Valley’s tech elite: that Google’s progressive laissez-faire model is no match for the state-supported growth of the Chinese system. And that the only way to stay competitive is to drop the progressive act and embrace deeper ties with the U.S. government.
The Chinese tech industry’s advancement wasn’t inevitable. While an open internet allowed U.S. tech companies to dominate, the Chinese government broke the rules of the global economic order. Between 2009 and 2010, China strengthened its blocking of dominant foreign internet companies such as Facebook, Twitter, and YouTube both for censorship purposes, especially following growing unrest in Tibet, and to insulate China’s tech sector. Known as the Great Firewall, this protectionist measure also gave local internet companies the time and space to develop their own alternatives, laying the foundations for the self-reliant tech sector China had long believed in.
In retaliation, the West furiously decried China’s Great Firewall. Aside from mostly well-warranted criticism of China’s censorship of political dissent, the U.S. government, and to some degree think tanks, has also vilified China for implementing protectionist measures and blocking access to China’s massive online market. In 2016, the U.S. trade representative even listed Chinese internet censorship as a trade barrier, which, according to a Los Angeles Times report, cost “U.S. tech companies billions of dollars in revenue.”
However, now that Chinese tech companies are competing in the U.S. market, U.S. Secretary of State Mike Pompeo this month announced the Clean Network program to protect American assets from “aggressive intrusions by malign actors, such as the Chinese Communist Party (CCP).” Dressed up as a national security policy, the new program will prevent “foreign adversaries” from accessing U.S. systems through companies such as Alibaba, Baidu, and Tencent. This new policy, which claims to safeguard American citizens’ privacy, is of course deeply hypocritical, given the National Security Agency’s global surveillance project leaked by Edward Snowden in 2013.
This month, Trump also issued executive orders to ban WeChat and TikTok if they are not sold from their parent companies within 45 days. While WeChat’s parent company Tencent is far from innocent and is complicit in the CCP’s expansive surveillance and censorship program in mainland China, such a ban will undoubtedly be a major blow to the millions of Chinese immigrants around the world who rely on the app to stay connected with their families.
These protectionist policies are aimed at forcing decoupling by U.S. firms that can no longer accept the risk of operating in China. Tech companies will have no choice but to play along and double down on their collaboration with the U.S. government or risk antagonizing it altogether—which could mean facing more regulations and losing out on lucrative government contracts.
Silicon Valley’s neoliberal order has come to an end, and from it a new era of tech nationalism has emerged. The internet will be more divided between national boundaries and the tech industry more militarized. An actual AI arms race may be inevitable.
The internet has connected people from all corners of the world, and with it, U.S. tech companies have gone global. But as Western hegemony is threatened by the rise of China’s tech industry, the solution isn’t to retreat back to a cold war mentality. Instead, a new meaning of an international internet with democratically agreed-on oversight is needed.
In the meantime, the public can begin to use more secure options such as ProtonMail or Signal and reduce our reliance on tech conglomerates, whether they are American or Chinese. Perhaps then, we—unlike Google, TikTok, Facebook, or Tencent—won’t end up trapped between Beijing and Washington in their ever deteriorating relationship.