In the late 1630s, a young Englishman named Francis Day sailed along India’s Coromandel Coast. Born into a noble family and educated at Eton, Day sought to make a fortune overseas. Global trade was expanding, fuelled by Europe’s hunger for silk, spices and other exotic goods. Like many of his peers, Day had joined the fledgling East India Company in search of new markets. His mission: find a strategic site near the region’s famed weaving centres—somewhere ships could anchor, a fort could be built, and commerce could flourish.
He settled on a strip of land near a quiet fishing village called Madraspatnam, ruled by a chieftain of the Vijayanagara empire. The location was suitable, but not ideal. The anchorage was good enough, but docking was difficult in rough weather. Still, Day chose the site. Legend has it that, strategic reasons aside, there were matters of the heart: he had fallen for a village beauty.
Day secured a land grant from the chieftain. In return for tribute, the East India Company was granted the right to build a fortified settlement—exempt from local taxes and governed autonomously.
Over the next decade, Fort St George rose—brick by brick, bastion by bastion. Around it, Madras began to take shape. Two parallel settlements emerged: “White Town”, home to European traders and administrators, and “Black Town”, where Indian merchants and artisans were given tax exemptions. Business boomed, company coffers swelled, and a portion of the trade revenue—some minted into coins by the company itself—flowed back to the local rulers.
Madras proved to be more than a trading post; it became a toehold. Over time, such outposts evolved into sprawling colonial provinces governed from abroad. As the company expanded its reach across Asia, it became, in Edmund Burke’s words to the British parliament in the late 1770s, “a state in the guise of a merchant”. At its peak, the East India Company controlled nearly half of global trade, and ruled over 20 crore people—more than any other empire of its time, except Qing China.
The unremarkable stretch of coastline that Francis Day chose became a cornerstone of the British imperial edifice.
Centuries later, another romantic entanglement would play a role in the birth of a modern empire. In the early 2000s, a Harvard University undergraduate named Mark Zuckerberg was reeling from a rejection. As one biographer put it, Zuckerberg fit the archetype of the awkward nerd: mop of curly hair, socially uneasy, with “a sort of reverse magnetism, pushing everyone away”.
Nursing his bruised ego in his dormitory room, he turned to his blog: “I need to think of something to take my mind off her.” On his screen was a digital photo directory of fellow students. “I almost want to put some of these faces next to pictures of farm animals,” he typed, “and have people vote on which is more attractive.”
A friend suggested a twist: compare two photos from the directory, and let users vote on who looked better. Occasionally, throw in the farm animals. Zuckerberg liked it.
Overnight, he built a website where Harvard students could rate the attractiveness of their peers. The photos were scraped from what was known as ‘facebooks’—photo directories that Harvard stored on its servers. He called the site Facemash.
He invited only a few friends, but word spread quickly. Within 30 minutes, 400 students had logged in and 22,000 votes were cast. Soon, as Zuckerberg struggled to manage the surge in traffic, the Harvard servers crashed.
Realising the trouble he was in, he shut down the site. Hauled before a disciplinary committee, he insisted that it was a prank gone wrong—a “beta test gone wild”. Zuckerberg escaped expulsion, but was placed on probation for two years.
Facemash—crude and controversial, but also instrumental in him meeting his future wife, Priscilla Chan—laid the groundwork for Facebook. Launched in 2004 as a Harvard-only platform, it soon opened to public in 2006. Over the next decade, Facebook evolved into a social media giant with more than three billion monthly users—roughly 37 per cent of the global population. It now commands half the world’s social media time, generating a vast trove of data regarding user interests, behaviour and social connections.
What forts were in the imperial age, Facebook is in information economy. If fortified towns secured territory for trade, Facebook functions as a digital fortress—a walled platform where billions of people interact, share and shop. If colonial powers amassed wealth by taxing trade, Facebook ‘taxes’ its audience by hooking their attention and harvesting their data—a currency in itself in the information age. Facebook, which rebranded itself as Meta in 2021, uses this data to fuel its advertising empire, which had revenues of $164.5 billion last year—comparable to the GDP of Ukraine.
But this is not just about money. Just as forts shaped the economies and cultures of colonies, Meta’s algorithms shape ideas, personal opinions, social attitudes and even national elections by controlling the flow of information.
This is not merely “technology imperialism”; technology has always been central to the imperialist project (see graphics on page 40). When Francis Day arrived in Madraspatnam, the Dutch and the Portuguese had already carved out enclaves along the coast. But the British eventually prevailed because of superior technology—armed merchant ships securing maritime dominance; railways speeding troop and goods movement; and telegraph lines enabling rapid communication to crush revolts and consolidate control.
By 1791, the East India Company counted as a sovereign power. That year, the nawab of Arcot—the overlord of Madraspatnam—filed a suit in London to recover an outstanding debt. But the court dismissed the claim, saying it had no jurisdiction over a dispute between two powers acting as independent sovereigns. The powers of the company, it noted, was “in fact that of a state”. Buoyed by the verdict, the company continued to extract revenue from Arcot until 1855, when the last nawab died and the territory was finally annexed.
In 2019, the Indian government approached the Supreme Court, asking Meta’s help to decrypt messages on its platforms for national security purposes. Meta, which by then had its largest user base in India, refused. In response, the government told the court that it cannot just let a company come to India and “establish a non-decryptable system”. Meta’s lawyer argued that Indian laws did not mandate decryption, and that in any case, it had not really physically established such a system here—it maintained all its servers abroad. “If I had the key, I could give it,” the lawyer told the court. “But I don’t have the key myself.”
Zuckerberg had written the previous year: “Facebook has a lot of work to do, whether it is protecting our community from abuse and hate, defending against interference by nation states, or making sure that time spent on Facebook is well spent.”
In short, the company—headquartered in Menlo Park, California—now needed to assert itself in the digital space as a government as well. A state in the guise of a merchant. And, as in colonial times, India was again a vast resource frontier—instead of spices, silk and cotton, raw data now flowed outward.
What is new, though, is the scale and depth of technological influence, said Kyle Chan, researcher in sociology at Princeton University and adjunct professor at the global policy think tank RAND Corporation. “Technology was a huge part of the original imperialism story—the ability to control capital and technology, and to outsource low-skilled, low-wage work to the rest of the world,” he told THE WEEK.
Modern geopolitics, especially the US-China rivalry, have echoes of old imperialism. Tech giants in both countries are out to ensure the technological supremacy of their governments, while capturing digital colonies in less developed markets. “You had basic commodities and raw resources coming from the periphery, while high-end manufacturing and wealth accumulation remained in the core economies,” Chan said. “So, in that sense, this isn’t a new story.”
When renowned Greek economist Yanis Varoufakis was a young father, his daughter Xenia asked him a deceptively simple question. All babies, she observed, are born naked—so why are some soon wrapped in expensive clothes while most wear rags. “Why so much inequality?” she asked.
Varoufakis mumbled a response that satisfied neither his daughter nor himself. Years later, after Xenia had grown up and moved to another continent—becoming, in his words, “a constant absence in my life”—he returned to the question. Drawing on his experience as Greece’s finance minister during its crippling debt crisis in 2015, he wrote Talking to My Daughter: A Brief History of Capitalism, an attempt to explain why some countries are rich and others poor, framed as the conversation he never had with her.
But even that book left him dissatisfied. He felt that by the time it came out, capitalism had morphed into something else. In Technofeudalism: What Killed Capitalism, published two years ago, Varoufakis proposed that capitalism had not evolved—it had been overthrown. Its successor, he said, was technofeudalism: a new global order in which Big Tech companies behaved as digital overlords.
If feudalism once extracted rent from “terrestrial capital” such as land and labour, technofeudalism extracts value from what Varoufakis calls “cloud capital”—digital platforms, data and algorithms. This new order, or cloudalism, does not seek monetary profit in the traditional sense. Its currency is people’s attention, which is harvested, commodified and turned into data. This data trains algorithms that further harvest attention—creating an infinite feedback loop.
“Alexa and Siri do not answer our questions for a fee,” Varoufakis wrote, referring to the voice assistants created by Amazon and Apple. “Like Facebook and TikTok, their purpose is entirely different: to capture and modify our attention.” Big Tech companies do not sell mere products, he says; they secure portals—into people’s homes, routines and, ultimately, minds.
In this new economy, every click, photo, search or interaction adds value to a handful of “cloudalists”, but not to the user. This is ‘unpaid labour’ of a new kind, he argues, fuelling a system that has moved beyond capitalism.
When THE WEEK reached out to Varoufakis to ask how far this trend had advanced since his book’s release, he sent a brief note: “Till the end of August, I have drawn down the shutters for a summer recharge.” He said he would “respond consistently” after this month.
Kyle Chan finds Varoufakis’s thesis “provocative, and actually quite appealing”. “Big Tech now operates on a scale that rivals states,” he said. “In some ways, they are quasi-sovereign. The decisions Meta makes for platforms like WhatsApp and Instagram, the gatekeeping Apple does through its app store, Google’s algorithmic ad policies—these have massive ripple effects across societies and economies.”
But, Chan added, there was a twist: these tech giants, while appearing autonomous, are increasingly becoming instruments of state power—much as the East India Company once was for the British crown. Under the Donald Trump government, companies like Nvidia have become tools of American policy.
In fact, the trend began even before Trump. In January, under president Joe Biden, Washington introduced the AI Diffusion Rule, restricting exports of high-performance chips—ostensibly to prevent misuse, but in reality to slow China’s AI momentum. The rule directly affected Nvidia, which makes 56 per cent of its revenues from international markets, with China accounting for 17 per cent.
To continue exports to China, the company has been forced to give 15 per cent of its revenues from the country to the US government. Experts say the deal is “highly unusual”—this is the first time an American company has had to give up a share of revenue for an export licence.
“Nvidia has become a geopolitical asset,” said Chan. “Washington is using Nvidia’s dominance in AI chips as leverage—first and foremost against China, but also to maintain control over global AI development.”
With Trump’s ascent, the trend has intensified. Companies are aligning their business strategy with the White House’s efforts to bring investments and jobs back to America. Soon after his election, Meta donated $1 million to his inaugural fund and pledged $65 billion for building AI infrastructure—majority of it in the US. Amazon, likewise, has committed $11 billion for AI expansion in several states; Apple announced $500 billion in US investments over four years; and OpenAI, partnering with Oracle and SoftBank, unveiled the Stargate project—a $500 billion AI initiative spanning the US and the Middle East.
Trump is dismantling the Washington Consensus—free markets, globalisation, deregulation—and replacing it with a Washington-Silicon Valley consensus: techno-nationalism as the organising principle of trade and diplomacy. A striking example of the new paradigm is the evolution of Scale AI, a data annotation startup founded in 2016 that began accepting US defence contracts in 2020. In 2021, Michael Kratsios, former chief technology officer in the first Trump administration, joined Scale AI as its managing director; in 2022, it started analysing battlefield data in the Russia-Ukraine war; and in 2023, it signed a deal with the US army, becoming the first AI company to openly meet military needs. In June this year, Meta acquired 49 per cent of Scale AI for $14.3 billion.
“The US administration seems to be championing—and absorbing from Silicon Valley—the idea that the US should be the global leader in technology, especially in AI,” said Chan. “There is this vision of a world order with the US at the technological top, and from that position, everything else flows—economically, militarily, geopolitically. That vision is something widely shared in Silicon Valley.”
China, Chan pointed out, is doing the same. “Huawei, Alibaba, Tencent—they are not just tech companies. They are also arms of state ambition,” he said.
According to Varoufakis, stepping into Big Tech ecosystems, in effect, is stepping out of capitalism. These platforms do not operate as open markets where buyers and sellers freely compete; they are state-sponsored digital fiefs, where Big Tech dictates the rules, decides what may be sold, and takes a substantial cut. In this model, the goal is not to simply profit from transactions, but also to extract “cloud rent” by controlling digital infrastructure.
Strip away the digital veneer, and the model looks strikingly familiar: paying cloud rent in the online world is similar to paying taxes in the offline one. As the real economy shifts to digital, it could be a case of corporations building empires for their states, or states enabling corporations to build empires of their own.
Either way, the ghosts of old-world imperialism still whisper.
One of the most ambitious examples of digital empire-building is World, a project by Tools for Humanity, cofounded in 2019 by Sam Altman of OpenAI. Its stated mission is to create a “globally inclusive identity and financial network” by deploying iris- and face-scanning “Orbs” to issue people a “World ID”. The company even mints its own cryptocurrency—offering 25 tokens for those willing to submit their biometric data. In theory, a World ID would make its holder a “World citizen”, able to interact and transact with other such citizens.
In its beta phase, launched in 2021, the World project scanned 22 lakh “unique humans” into its database—mostly drawn from developing countries like Kenya, Nigeria and Indonesia. The project’s official rollout came in July 2023, and today the network holds the biometric data of at least 1.4 crore “verified humans” worldwide.
In India, Orbs appeared in malls and metro stations in Bengaluru and Delhi, drawing young people seeking free tokens. But the rollout here ended abruptly. The company cited “overwhelming demand”, but sources told THE WEEK that regulators had intervened. Tools for Humanity declined to comment to THE WEEK on the withdrawal.
The lesson is clear, according to Rajgopal A.S., CEO of NxtGen Cloud Technologies in Bengaluru, which supplies Nvidia chips to the Indian government and offers “sovereign cloud” support to the Election Commission of India. “India needs to understand data privacy,” he said. People grab freebies without realising they are paying with their most personal asset: their data. With biometrics, there is no reset button for your eyes or fingerprints.”
Chan agreed: “We don’t yet know how the data will be used, what restrictions are in place, or what oversight exists. There are a lot of unknowns.”
In 1770, the Bengal famine struck, killing around one crore people—its toll worsened by the East India Company’s control of the grain trade. The economic shock rippled beyond Bengal to Madras. By then, the company had been minting it own coins to facilitate trade, much like tech firms issuing cryptocurrencies. But its currency was sidelined as people hoarded Mughal coins, trusted for their legitimacy.
As the nawab of Arcot, a key ally, began drowning in debt because of the crisis, the company extended fresh loans to keep him loyal, further draining its reserves. The nawab’s mounting debt eventually drove him to sue in London.
The crisis continued to deepen as the company defaulted on payments to the Bank of England. “The stock plummeted sixty points in a single month,” wrote William Dalrymple in The Anarchy: The East India Company, Corporate Violence, and the Pillage of An Empire. “It was shortly after this that the company was forced to go cap in hand to the Bank of England for a vast loan.”
With many British MPs holding company stock, the crisis became a parliamentary matter. The Bank of England was told to extend multiple loans, but the situation deteriorated to the point that the company needed a full-scale bailout. In June 1773, the parliament passed the India Bill, bringing the company under government oversight. It was saved, wrote Dalrymple, “by one of history’s first mega-bailouts, an early example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and rein it in”.
That history has a striking parallel with Varoufakis’s account of Big Tech’s rise after the 2008 financial crisis in the US. To stabilise the economy, Washington created new digital money, credited it to banks, and slashed interest rates. “Fearing that run-of-the-mill businesses would not be able to repay them, the financiers lent the central bank money only to Big Business,” Varoufakis wrote. “And Big Business either refused to invest, or invested solely in cloud capital.”
Amazon, Google, Uber and others borrowed at near-zero rates to fund expansion, research and acquisitions. Investors, also flush with cash, poured billions into tech stocks—driving the cloud computing boom (Amazon’s cloud revenue jumped from $4 billion in 2008 to $115 billion in 2024), and acquisition spree (Facebook bought WhatsApp for $19 billion in 2014; Microsoft acquired LinkedIn for $26 billion in 2016).
According to Varoufakis, this disproportionate flow of money into financial markets detached capital from traditional profit-making activities. Covid-era stimulus reinforced this trend. “Even cloudalist companies that had a bad pandemic like Uber and Airbnb… took the central bank money and invested in more cloud capital as if there were no pandemic,” Varoufakis wrote. “It was the pandemic, with the flood of state money it unleashed, that ushered in the Age of Cloud Capital.”
In China, a turning point came in March 2017, when Google’s AlphaGo—then among the world’s most advanced AI systems—faced Ke Jie, the world’s No 1 Go player. The 2,500-year-old board game, played on a 19x19 grid, is famed for its astronomical number of possible moves. A year earlier, AlphaGo had stunned by defeating Korean legend Lee Sedol 4-1 in matches watched by over 28 crore Chinese viewers. Ke Jie, too, lost decisively to AI. Within two months, Beijing unveiled a national AI strategy aimed at making China a global AI hub by 2030, with interim benchmarks for 2020 and 2025. Chinese venture capitalists quickly raised funds in response to the ambitious plan.
Today, dominance in critical technologies such as AI, semiconductors and quantum computing forms the core of both US and Chinese foreign policy. Despite starkly different political systems, both face the same dilemma: how to rein in the power of Big Tech while exploiting it for geopolitical ends? Their regulatory paths, though different in form, have surprising parallels.
In the US, tech giants lobby for weak regulations. In the first quarter of 2025 alone, Meta, Amazon and Google spent $8 million, $4.3 million, and $3 million, respectively, to shape American policy. A provision in Trump’s One Big Beautiful Bill sought to bar US states from regulating AI for 10 years, but the Senate struck it down over safety concerns.
China has taken a different path, but with the same intent. From late 2020 to 2022, it curbed Alibaba, Tencent and ByteDance for monopolistic practices that threatened state security. Now it is selectively loosening its grip to spur AI innovation and counter US dominance. “Beijing is using tech companies like Huawei, Alibaba and Tencent to build cloud infrastructure globally and push Chinese hardware—chips, servers, etc.—into foreign markets,” Chan said. “This is part of a larger strategy to extend China’s influence abroad.”
China is leveraging its manufacturing prowess to augment its technology capabilities to pull ahead of the US. As Lu Feng, a Peking University professor and prominent voice in China’s industrial policy, noted: “In the past 500 years, no industrial power has lost to a financial one—even if the latter was a global hegemon.”
As the economy shifts from physical to digital, the quasi-state powers of tech giants are beginning to extend back into the physical realm—much like the East India Company, which evolved from merchant trader to territorial ruler. “The East India Company, from its very beginning, had quasi-state powers,” Dalrymple told THE WEEK. “This was anticipated in its founding charter in 1600 from Queen Elizabeth I. Even when just one ship was going out to Indonesia to buy spices, the charter anticipated the company to conquer territories, raise armies, and have the right to operate law courts—things we would think of as the exclusive privilege of the state.”
Today’s tech empires are amassing both digital and physical assets—buying land directly or through proxies for hyperscale data centres, industrial complexes and real estate development. This is a global trend, and India is part of it. American investment giant Blackstone—often called India’s largest commercial real-estate landlord—announced in February that it would partner Panchshil Realty to construct India’s largest hyperscale facility in Navi Mumbai with an investment exceeding Rs20,000 crore.
Notably, the US government can claim access to any cloud infrastructure built by companies with substantial ties to the US—whether headquartered there, listed there, or merely operating there. “In 2018, two landmark regulations came into effect: Europe’s GDPR (general data protection regulation) and the US CLOUD Act (clarifying lawful overseas use of data),” said Rajgopal of NxtGen. “GDPR says: wherever my data resides, I still own it. You can process the data, but only within the limits I set. But the CLOUD Act, instead of restricting access, legalised it—any data, anywhere in the world, is accessible to US authorities if the company that stores or manages it has US ties.”
Section 702 of the US Foreign Intelligence Surveillance Act goes further. “It mandates proactive surveillance,” Rajgopal said. “It’s not just about stored data—they want intelligence on ongoing activities. That’s a whole new level of control. Many countries engage in surveillance, but the US does it within a structured, legal framework—open, unapologetic and enforceable under US law.”
For India, AI self-reliance is now an existential necessity, said Dheemanth Nagaraj, co-founder and CEO of Bengaluru-based AI company Agrani Labs. “It’s important not to think in silos—hardware here, software there. We need to think across the entire AI stack: the application layer, the algorithmic layer, and the infrastructure layer,” he said.
Rather than chasing “AI superpower” status, Rajgopal said, India should focus on reducing foreign dependence. “US tech giants already have technological muscle, talent and capital,” he said. “India simply can’t match it—we lack comparable financial firepower, technological depth, and concentrated talent pools.”
India’s deep tech ecosystem also faces systemic hurdles: heavy taxation, lack of large-scale domestic funding, and uncertain government procurement. Vijayvithal Jahagirdar, CEO of Dyumnin Semiconductors in Bengaluru, offered a telling example: “One of my friends runs a startup that recently designed a radar chip for the defence industry. After a year of work, the contact in the defence establishment reportedly told him: ‘I can get the same chip from an American company—why should I take it from you?’”
The irony, he said, was that even the American company would probably have the chip designed in India. The reason: over 20 per cent of the world’s chip designers are in India. “Take Intel, AMD or ARM—they have their sales, marketing and top management in the US, but the actual engineering and design work is handled by teams in India,” Jahagirdar said.
He recalled another episode where his startup, having completed a $13 million tape-out (the final stage in chip design before it is sent to a foundry), was the only participating bidder with relevant experience. When he asked about an upfront commitment, the reply was: “Build it first, then we’ll decide.” “That’s unviable,” Jahagirdar said. “Startups can’t burn $20 million on non-binding assurance.”
Ultimately, everything boils down to capital.
On September 24, 1599, Dalrymple wrote in The Anarchy, “a motley group of Londoners was gathering in a rambling, half-timbered building lit by many-mullioned Tudor windows” to raise funds for a voyage to the east. They collected around £30,000 (worth several million pounds today) and petitioned Queen Elizabeth I for permission to launch an enterprise “for the honour of our native country and for the advancement of trade and merchandise”. Thus was born the East India Company.
Four centuries later, India is in need of a similar leap of faith—its own bold, billion dollar bets on deep tech from within the country. “If unicorns have emerged here, they have almost always been funded by foreign investors,” Rajgopal said. “That’s our biggest weakness—we lack deep domestic financial backing needed for cutting-edge AI systems.”