Rupture

Here's some of what's happened so far this year:

A masked agent of the Federal government shot an unarmed mother, a citizen, in the head in Minneapolis. She and her family are being investigated, but the shooter isn't. The US invaded, then expropriated lots of oil from, Venezuela. We're selling it and the proceeds are going to a bank account in Qatar that is, Donald Trump tells us, personally controlled by him. We demanded – offered to buy – threatened to seize with force – no, by economic blackmail– no, wait, offered to buy – who knows? – Greenland. Taking control of that Danish territory would pit our allies in NATO against us, maybe in a shooting war. That would be a huge gift to Vladimir Putin and legitimize territorial aggression by Russia and China.

It's been a hell of a January, and January is scarcely three weeks old.

Like most of you, I'm aghast at all of it. I am furious. But I can't channel that fury to tell you anything you can't read elsewhere or haven't thought of yourself.

Instead, I want to talk about the near-term future of the tech sector. I've been thinking about this for a while, but Greenland and the events in Davos this week have forced me to the keyboard.

A nice little hotel, maybe?

Way back in his first term, Trump made noises about adding Greenland as a US territory. At the time I assumed it was a typical Trump head-fake, words that leaked out of him when he was riffing off-teleprompter, trying to distract from whatever bad news he wanted to cover up in the moment.

He has revived the idea in his second term.

Talking heads on television and newspaper editorial boards have speculated on his strategic thinking. Is Trump withdrawing from the a leadership position globally and seeking to expand influence regionally, retreating to greater dominance in a smaller sphere? Is he playing Arctic chess with China and Russia as global warming opens sea lanes in the formerly-impenetrable north?

I think there's a much simpler answer.

Trump's a serial-bankrupt mid-tier real estate guy. Real estate guys acquire parcels and do things to them. Other Presidents added parcels to the US! Jefferson made the Louisiana Purchase. Trump's tariff hero William McKinley took control of Puerto Rico in the Treaty of Paris that ended the Spanish-American War. Trump wants Greenland because those guys did it, and because real estate matters to him.

All the gold leaf he's added to the White House, the razing of the Rose Garden for the Presidential Walk of Fame, the One Big Beautiful Ballroom? Same thing.

And it all serves to distract from his terrible polling and grift. Honestly, you have to wonder how bad the Epstein files are, that ICE and Greenland seem like good ideas.

WEF and Davos

Trump's Greenland fit was the background for the gathering of the World Economic Forum in Davos, Switzerland this week. Trump delivered a typically-incoherent speech filled with petty complaints about perceived personal slights, lies and grandstanding. It was humiliating. The WEF has posted a transcript.

I want instead to highlight the speech delivered by Canada's Prime Minister, Mark Carney. It's only fifteen minutes long. It's statesmanlike and clear-eyed about the damage that America has done to the world order. I encourage you to watch it if you haven't seen it yet. The live translation from French ends at about 45 seconds in, when Carney switches to English.

The difference is stark: Carney is competent and persuasive. Trump, plainly, is neither of those things.

Trump, of course, has lashed out at Carney, so it's worth remembering that Trump made this particular adversary for himself. Canada's Conservative party was leading in the run-up to last year's race for Prime Minister before Trump's threats against Canada became the defining issue of the election. Carney won on that issue. Without Trump, no Carney.

The power of Middle Powers

Carney's message to Davos and the world is simple: The world order is not in transition. It has ruptured. Given the scope of the damage, it's important to name the change clearly and to face it honestly and pragmatically. We cannot repair it, he says. We must build something new.

In his speech, Carney talks about the "middle powers." China and the US, of course, are great powers (right now, so far), but there are lots of countries with educated people, good rule of law, healthy economies and military might that still matter. Individually, they demand notice at least. Together, they are formidable.

Carney lists some of the practical things that Canada is doing in recognition of the rupture: negotiating new relationships with great and middle powers outside the ambit of the US, committing to principle and ethics, collaborating with partners in multi-lateral coalitions where they share interests. Mostly: Working with other countries to take a seat at the table together, lest they be on the menu. "The power of legitimacy, integrity and rules will remain strong," he says, "if we choose to wield them together."

Hegemons and hyperscalers

Carney makes another comment that resonates with my own thinking lately. Middle powers, he says, "don't have to choose between hegemons and hyperscalers."

The hegemons, of course, are China and America. As superpowers, both can use their muscle to bully and browbeat smaller countries. America used to do that more rarely, but after the rupture, it's simply how the country behaves.

"Hyperscaler" is the word that techies like me use to talk about Big Tech companies like Amazon. Amazon's cloud can scale up to enormous workloads. Businesses around the world rely on Amazon for critical computational and storage services. Two decades ago, it was common for companies to buy servers of their own and run them in their own data centers. These days, everyone just uses the cloud. It's simpler and more reliable. They can get as much of it as they need.

In Carney's framing, hegemons and hyperscalers are linked because the dominant hyperscalers today are Amazon, Google and Microsoft, all US companies, and Tencent, Huawei and Alibaba, all Chinese companies. The hegemons are home to the hyperscalers.

There just aren't any Canadian or European or Japanese or Australian hyperscalers.

A European cloud?

If you're a Canadian or European or Japanese or Australian businessperson, that's a serious problem. You depend on providers that operate in, and are subject to the laws of, a country that is willing and able to apply force on you. American hyperscalers dislike Europe's data privacy policy and its laws regarding liability for harms caused by technology. Those companies and the US government can apply pressure on foreign customers in favor of the Big Tech hyperscalers. Nice little business you have there. Be a shame if anything happened to it. And because US companies respond to US government demands, the sensitive customer and business data of those non-US companies may be used by the federal government against them.

Carney's speech encourages the middle powers to band together and build new technological and economic might – to create hyperscalers of their own.

That won't happen overnight, of course. Amazon took time, technical skill and money to build. But the history of technology is clear: The unassailable giants of today will stumble and fall. It was hard to foresee the declines of IBM, DEC, Compaq, Sun and others before their successors ate their lunch. And while Amazon and Google had to invent the hyperscaler cloud, the middle powers know what clouds look like, now. New technology is much harder to create than it is to copy.

Technical skill used to be concentrated geographically. I moved to Silicon Valley in the 1970s because it's where the nerds were! But that's just not true anymore. Smart investors, hardware designers, coders and company builders are scattered around all over the world, and connected by networks that just didn't exist when I was a baby programmer. ASML is in Holland and TSMC is in Taiwan. Even Amazon didn't need to be in California to get started!

Trump's policies will accelerate the creation of new, non-hegemon hyperscalers.

An obvious example is the Administration's war on universities and its use of immigration law and intimidation to keep foreign students from coming to the America. Giving the smart kids a safe and welcoming place to work is a genius long-term economic strategy. They create companies and industries that generate progress, productivity and wealth. Under Trump, we are salting those fields.

In his competence, Carney names the other key driver: The world at large, the middle powers in particular, can't rely on the US any longer. The country simply cannot be trusted. Certainly Trump is erratic, transactional, vindictive. Even if he is replaced, though, the country that elected him twice might make an even worse choice in the future.

The world must build those competitors to American and Chinese Big Tech. I am confident that, in time, it will. Trump has made that imperative clear to our former allies and dependents.

In fact, work is already underway. Bert Hubert is a respected technologist and entrepreneur from the Netherlands. He's championed the creation of a European cloud for some time now, foreshadowing the arguments that Carney made in Davos. He knows that the work is hard and will take time, but he has begun it. I am confident in his success or the success of someone like him.

After the rupture

New technical leadership outside the hegemons will challenge US and Chinese dominance. It will take some of the economic value that flows to our countries now and redirect it to new players. Technological, economic and geopolitical power feed one another. Post-rupture, I expect there to be new companies and new coalitions of countries that lead the world. America will no doubt be a player, but it may no longer be the champion.

Oceans rise; empires fall. I was lucky to live through the tech boom of the late 1900s. As an American, as a Californian, the playing field was tilted in my favor. I liked it!

And as an American, I'm shocked and dismayed. We have committed geopolitical suicide, surrendering global leadership and forfeiting the respect and trust of much of the world. It's shameful.

As a human being, though, I can find cause for optimism. Carney's right. We can create a world where hegemonic hyperscalers are not the only choice. We need to be honest with ourselves about the world as it is. We have a great deal of hard work to do. But we can create a new geopolitical ecosystem where power is more diffuse.

In times of great and dangerous change, Darwin favors diverse ecosystems with strong competition. More innovation, more creative destruction create new balance and new opportunity.

Let's make that!