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"Big Tech" Could Be A Big Advantage
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“Big Tech” Could Be A Big Advantage

I feel terrible about missing yesterday’s Brief (but I’m feeling much better physically and I ...

I feel terrible about missing yesterday’s Brief (but I’m feeling much better physically and I finally took care of that crazy leprechaun!)

In an effort to take the edge off of any Sync withdrawal you may be experiencing, here’s an article I just published arguing that using antitrust as a political weapon could hurt our national security. I hope it’s helpful.

Have a great weekend.


Invoking ‘Big Tech’ as an accusation can endanger American security

Could Congress’s antitrust campaign against Big Tech derail America’s strategic competition with China? A bipartisan collection of senior national security leaders — including a former Secretary of Defense, former Director of National Intelligence, former CIA executives, and a former White House Homeland Security adviser — think so, and we would do well to listen.

In a letter written to Congress last month, this diverse group of notables warned that “more deliberate analysis is needed to examine the detrimental impact” that a slew of proposed antitrust laws targeting Big Tech could have on American power.

Their misgivings are well-founded: One of these proposals, for example, would amend legislation on anti-competitive monopolies such that any company with a market cap of more than $100 billion would be prevented from making any merger or acquisition.

Though this particular proposal thankfully has not gained much traction, it is representative of the kinds of poorly considered, far-reaching bills that should have us all concerned. For their proponents, the term “Big Tech” is often invoked as an accusation, implying that the scale of these companies alone means they need to be broken up. This approach breaks with American precedent, bucks antitrust law, and endangers American security. 

The reality is that the technologies that are essential for securing the people and interests of the United States are overwhelmingly being developed in the private sector, which now accounts for about 75 percent of total U.S. research and development spending. Hamstringing these industries will make the nation less safe as the effects of years of insufficient national security funding, training and planning catch up with us and embolden authoritarian regimes in Beijing, Moscow and elsewhere.

Reversing these trends requires ongoing innovation in areas such as artificial intelligence (AI), quantum computing and robotics. But advancing these technologies is resource-intensive and decisively enabled by companies who are able to operate “at scale.”

Last year, Alphabet, Amazon, Apple, Facebook, Intel and Microsoft alone spent a combined $140 billion on research and development (R&D), not including acquisitions. The Pentagon’s R&D budget for the same year was $109 billion.

Why were six U.S. companies able to outspend and out-innovate the U.S. government? Because they are profitable. And they are profitable because they are big.

Pushing the frontiers of science and pioneering game-changing technologies is expensive. The resources and talent to do these things are highly valuable and desperately scarce. It is no coincidence, then, that the companies that have found ways to attract billions of customers — and the profits that come with them — are the ones at the center of these innovations.

Instead of railing against these companies because of their size, we instead should be thankful that our free-market economy has produced an alignment of interests where private-sector actors can generate wealth and jobs while also developing capabilities that will provide for the common defense. This uniquely American advantage may well be decisive in an era of escalating geopolitical competition. It would be reckless to give it away.

That is not to say that these companies should be legally immune simply for being important to national security. If a serious investigation demonstrates that any of these companies have violated antitrust, or any other law, by all means they should be held accountable. 

Nor is it to deny other consequential issues related to these companies that still need to be addressed, such as their disproportionate power to bend public discourse, or their previous reticence to collaborate with the U.S. government (though all of the companies mentioned here are now actively pursuing U.S. defense contracts).

Their disturbing support of the People’s Republic of China is particularly ripe for remediation: Microsoft’s Beijing-based Research Asia Lab is the company’s largest outside of the U.S. and is heralded as “the single most important institution in the birth and growth of the Chinese AI ecosystem over the past two decades.” Likewise, Apple’s near-total capitulation to China’s surveillance and data access demands justifiably invites public skepticism and congressional scrutiny. 

These potent criticisms, however, do not justify blowing up an industry that constitutes 10.5 percent of our national GDP — particularly when its innovations are at the heart of our current and future national security requirements.

The truth is that “big” is not bad. In fact, when it comes to tech, it may be a critical advantage.

Klon Kitchen is a managing director at Beacon Global Strategies and a nonresident senior fellow at the American Enterprise Institute.