Tech Policy

What is one important factor about the US-China technology wars that many mainstream news outlets are currently missing?

Brian M.
Connecticut, USA

The regulatory assault on Chinese tech firms hits at the heart of the valuation story for internet-based businesses. As AI and machine learning evolve, ‘tech giants’ in the US derive increasing value from the vast trove of data they collect, using it to drive economic, social and even political trends. Accumulation of this kind of power outside of the Communist Party will simply not be allowed in China. Furthermore, the CCP’s aversion to encryption techniques that might facilitate the keeping of secrets by non-Party entities suggests that acceptable degrees of data security can only ultimately be achieved within the State. Logically, this leads to an eventual nationalization of “big data”, robbing Chinese tech firms of a critical valuation lever. The recent under-performance of Chinese tech companies relative to their US counterparts is likely to prove persistent.

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