3: Digital Imperialism: Why AI Infrastructure Is the New Oil (And Who's Winning the Race)

Article 3/7 in The AI Power Shift: A 7-Part Series on How Algorithms Will Rewire Global Politics and Corporate DNA

Quick Read Summary:

Three American companies now control more of humanity's existence than any empire in history—65% of global computational capacity versus the British Empire's measly 25% of landmass.

While governments debate regulation, Amazon, Microsoft, and Google have already colonized human thought itself through AI infrastructure.

Countries are becoming digital vassals, their citizens' minds processed on foreign servers. The internet is dead; welcome to algorithmic imperialism where your thoughts are the new oil, and you're not getting royalties.

Full Article:

Remember when oil cartels could topple governments?

Those were simpler times.

At least petroleum had the courtesy to be geographically distributed and politically manageable.

You could invade a country for oil.

Try invading Amazon Web Services.

Welcome to the era of algorithmic imperialism, where data centres are the new battleships and GPUs are more valuable than gold deposits.

The most powerful empires in human history controlled trade routes.

Today's digital empires control the computational routes that process human thought itself.

And somehow, we're still pretending this is just "technology."

The New Colonial Powers: Meet Your Algorithmic Overlords

Three entities are quietly partitioning the digital world:

Amazon (AWS): Controls 32% of global cloud infrastructure. When they hiccup, half the internet goes dark.

Microsoft (Azure): Owns 23% of cloud computing plus the entire Office productivity ecosystem. They've basically colonized human work itself.

Google (GCP): Dominates 10% of cloud infrastructure but controls 92% of global search and the foundational AI research that powers everything else.

Together, they control 65% of the world's computational capacity.

For perspective, at the height of British imperialism, the Empire controlled roughly 25% of the global landmass.

These three companies control a larger percentage of humanity's digital existence than any physical empire in history.

The Geography of Digital Dominance

Physical colonialism required ships and soldiers.

Digital colonialism requires data centers and fiber optic cables.

Here's where it gets interesting:

AWS operates 200+ data centers across 31 countries.

But they're not randomly distributed.

Every facility is strategically positioned to minimise latency while maximising political leverage.

Why does Amazon have seven data centres in Ireland but zero in Russia?

Why are there twelve AWS facilities in Japan but only three in all of Africa?

The answer: Digital infrastructure follows political allegiance, not population density.

Case Study: The Great Chinese AI Wall

China recognised digital colonialism early and built the world's most sophisticated digital sovereignty strategy.

Instead of allowing American companies to control their computational infrastructure, China created parallel systems:

• Baidu (instead of Google)

• Alibaba Cloud (instead of AWS)

• Tencent (instead of Microsoft)

• ByteDance (instead of Meta)

The results are staggering:

Chinese companies now control 47% of Asia-Pacific cloud infrastructure.

American dominance in the world's largest market: effectively zero.

China didn't just reject digital colonialism—they became digital colonizers themselves. Alibaba Cloud now operates across 25 countries, TikTok has colonized global attention, and Chinese AI companies are expanding faster than American competitors.

The student became the master while America was busy arguing about antitrust legislation.

The Infrastructure Advantage: Why Location Equals Power

AI models require three resources: computational power, energy, and data.

Computational power: Concentrated in massive data centres owned by the Big Three Energy: Requires stable electrical grids and favourable government policies
Data: Generated by users but processed in centralised facilities

Control any one element, and you control the entire system.

The Energy Colonialism Subplot

AI infrastructure consumes ludicrous amounts of electricity.

A single ChatGPT query uses roughly the same energy as keeping a LED lightbulb on for 20 minutes. Multiply that by 13 billion daily queries across all AI systems, and you're talking about the electrical consumption of entire countries.

The power requirements are getting ridiculous:

• Training GPT-4 consumed 50 gigawatt-hours of electricity

• Running global AI inference requires 150 terawatt-hours annually

• By 2027, AI systems will consume more electricity than Argentina

Countries with cheap, abundant energy become AI superpowers.

Everyone else becomes digitally dependent.

The Data Sovereignty Wars

Every country is waking up to the same terrifying realization: their citizens' data is processed in foreign facilities under foreign legal jurisdiction.

European Response: GDPR Plus AI Regulations Europe is mandating that European data must be processed within European facilities. Sounds reasonable until you realize most AI infrastructure is American-owned.

Indian Strategy: Digital India Initiative
India is requiring foreign AI companies to establish local data processing centers and share algorithmic insights with government agencies.

Brazilian Approach: Conditional Market Access Brazil now requires AI companies to prove their systems won't discriminate against Brazilian users and must submit to local algorithmic auditing.

Every country wants AI benefits without digital colonisation.

The Corporate Response: Algorithmic Diplomacy

Tech companies are adapting to data sovereignty demands through "digital embassies"—local subsidiaries that comply with national regulations while maintaining global integration.

• Amazon's Strategy: Build local AWS facilities in key markets while maintaining centralized AI development

• Microsoft's Approach: Partner with national cloud providers while integrating Azure AI services

• Google's Method: License AI technology to local companies while retaining core algorithmic control

They're offering digital autonomy while maintaining algorithmic dependence.

It's brilliant and terrifying simultaneously.

The Real Winners: The Infrastructure Enablers

While everyone focuses on AI companies, the actual winners are infrastructure providers:

NVIDIA: Controls 87% of AI-optimized chip production. Every AI system depends on their hardware.

Taiwan Semiconductor (TSMC): Manufactures the advanced processors that power AI systems. Geographic chokepoint for global AI capacity.

Fiber Optic Network Operators: Control the high-speed connections between data centers that enable distributed AI processing.

These companies don't develop AI—they make AI possible. That's even more valuable.

The Three-Year Prediction: Digital Balkanization

The next three years will fragment the global internet into "algorithmic spheres of influence."

American Sphere: North America, Western Europe, parts of Asia-Pacific. AWS/Azure/GCP dominance.

Chinese Sphere: China, parts of Asia, growing African presence. Alibaba/Tencent/Baidu control.

European Sphere: EU plus regulatory allies. Local cloud providers with American partnerships.

Emerging Sovereign Sphere: India, Brazil, other major economies building independent capabilities.

The unified global internet is over. Welcome to the splinternet.

The National Security Implications

When foreign companies control your AI infrastructure, they control your national decision-making capabilities.

Military applications: AI-powered defense systems depend on cloud computing infrastructure

Economic intelligence: AI models processing sensitive business data on foreign servers

Social control: Algorithmic content curation influencing citizen behavior and political opinions

Critical infrastructure: AI systems managing power grids, transportation, and healthcare running on foreign platforms

Digital colonialism isn't just economic—it's existential.

The Corporate Counter-Strategy: Too Big to Regulate

American AI companies are racing to become so essential that regulation becomes impossible.

If AWS processes 40% of global business operations, governments can't meaningfully restrict their activities without crippling their own economies.

If Microsoft's AI tools become essential for productivity, banning them becomes economic suicide.

They're not trying to avoid regulation—they're trying to make regulation irrelevant.

What This Means for Everyone

For countries: Start building AI infrastructure now or accept permanent digital dependence on foreign powers.

For companies: Choose your algorithmic allegiances carefully. The AI platform you select today determines your geopolitical positioning for the next decade.

For individuals: Your personal data isn't just powering targeted advertising—it's fueling the algorithmic systems that will determine global power structures.

The most important resource in human history isn't oil, gold, or land.

It's the computational capacity to process human intelligence at scale.

And right now, three companies control most of it.

Think that might be important?