The story of the past 30-plus years has been about globalization as a way to ostensibly increase trade, prosperity, and peace across the globe. But we're very obviously doing an about-face on a nation-state scale today. How about for tech? Are we seeing a deglobalization of tech?

We've always had a bit of a deglobalization, right? I think you're talking about the story broadly around supply chains, etc. But I remember writing an article for TechCrunch in 2014 called "From Internet to Internets," so the singular Internet to Internets. This was specifically about China cutting off Western companies, most notably Facebook at the time, but also Google and others, who had no access to the growing Chinese market. And that allowed Baidu, Alibaba, and Tencent to build up into these massive conglomerates.

But now what I think you're seeing is an expansion of that, not just China and the US, but also China, the US, and Europe. You see a split in Brazil and parts of Latin America. And so yes, there is a deglobalization, but I think the pattern started way earlier than most people appreciate.

Why did it start that much earlier, call it 10 or 15 years ago? The most prominent example, as you said, is China. I think the answers there are perhaps a little obvious, but we should still talk about them. To your point about Europe and perhaps LATAM, what is forcing that? More broadly, what are the most important forces driving all of this?

There are a couple, right? One is around data and privacy. You have huge concerns in the European Union around privacy. That started with GDPR six, seven, eight years ago. China has always had a lot of concern about any foreign country owning its own citizens' data. And you see the same pattern in Brazil.

Then you have constitutional provisions. Free speech is approached differently in different countries, and social media has been at the vanguard for a lot of those situations. So you saw Brazil banning X just a couple of weeks ago (August 2024). You've seen civil concerns in Europe and elsewhere. So you have these constitutional concerns.

And then third, and I think obviously most importantly, tech has just become the dominant wealth creator of the last 10 years. You look at the scale of Nvidia, Microsoft, Google, Apple, and then the Chinese conglomerates we mentioned earlier. They're massive. And a lot of other countries didn't have access to these. Think throughout Europe: there is no Google equivalent. Go to Latin America, none there either. Go to Africa, the Middle East, Australia, Japan, Korea, it doesn't matter. They really don't exist.

And so a lot of countries want to be able to acquire the wealth creation that comes from those particular companies. They feel the need to basically block off their markets and say, "Look, the only way we're going to have a search engine that competes with Google is to not allow Google to compete in our own market."

Do we think it's a good thing or a bad thing?

As a venture capitalist, it's interesting, right? Because these markets are very mature. And so when you start to break them up, either through antitrust or through new trade walls, suddenly you have the opportunity to create new companies that could produce the ability to write a seed check, write a Series A, and potentially exit. Even though you're fragmenting these markets, Google is irrelevant from an early-stage venture perspective. And so I always joke that I'm 100% in favor of antitrust in the context of venture, because breaking up any of these companies means there are new opportunities to invest in.

It's an interesting thing to think about through the lens of a venture capitalist. You're already starting to see things like this in Europe, with companies like Helsing, which are trying to build the Anduril for Europe, new defense infrastructure for Europe. What do you think a world with increasingly deglobalized tech looks like? Is it every nation for themselves? Is it the West versus China, or something else?

I think it's appropriate to split it into two groups. You have the hardware side, so Helsing and Anduril. I would argue, as an investor in Anduril, that Anduril is the Anduril of Europe versus Helsing. But I think you see a split on the hardware side, where it's easier to make deglobalization happen. You can control the supply chains better. That does generally mean higher costs, because you can't scale as high, but many people are willing to absorb that in areas like defense, aerospace, industrials, etc.

It's software that gets a little more complicated. Building a search engine is very expensive. You can split the market in half and have two search engines. Now you have thousands more engineers, thousands more code. You're not necessarily getting a better benefit. And so there's a huge question of whether you're just collapsing value in the hopes of multiplying the number of companies available. But again, you're redistributing some of that well. So if Google was kicked out of a couple of these different markets, or if Microsoft or OpenAI couldn't access them, their valuations would sink, other valuations would go up, and it depends who owns what.

My personal view is that it seems increasingly unlikely that you'll have true deglobalization of tech. Instead, perhaps you'll have a microcosm of what we see play out in the real world with the US and China, where really the world's largest economies can afford to build their rails entirely in-house across every single vertical, from search to biotech to defense. If you can do that internally as an economy and still produce large enough outcomes, that makes sense.

The scale advantage of these companies is massive, right? In order to compete with the incumbents, whether it's an operating system like Android or iOS, whether it's OpenAI or Anthropic, whether it's Google search, or I guess Bing, I mean, there's not even really a number two there. You would have to invest so much money. You would have to put in place so many rules. You would have to put anti-market competitiveness rules in place to prevent Google from getting access to this, that you can do it. You would need a complete plan to do so.

And I think outside of China, we've not seen countries that say, "Look, we're going to ban the products, invest at the same time to compete with them, and put in place universities to provide the college graduates and the PhDs to be able to build those products." You don't have that kind of soup-to-nuts plan. And I truly think that outside of China, you don't see this. You don't see it in Europe, and you certainly don't see it in Latin America or the Middle East. Australia and New Zealand are too small. So you have this limit of who else could possibly do that.

India might be the sole example that I'll be curious to see over the next five to 10 years. I do know they've taken a similar playbook of putting up walls around what they call core industries of financial interest, like banking, insurance, and retail, to try to induce Indian success stories. And to their credit, they've actually lowered those walls once they have large Indian companies that want to compete on a global scale. That's maybe the inverse of China, which has kept those walls up. So it's a slightly different approach, but I agree. It seems like India may be the sole other exception there, and outside of that, folks will have to work in tandem with one another.

Look, India has banned more than 100 Chinese apps, most notably TikTok. It was very protective around education, healthcare, and a lot of other social services. That led to a huge burst of startup activity, VC investment, etc.

I think the challenge for a lot of Western investors, including someone like me, going into a market like that is that it's still a developing market. So you're dealing with all of the challenges of a developing-world economy, where you're not just betting on a company, you're also betting on the nation's success as well. That's very empowering. It's very positive. But those go up and down. We've seen exactly that happen in a couple of the major edtech stories out of here. We saw this with a lot of the e-commerce plays that have happened over the last couple of years. If you look at the generation of Indian companies from seven years ago, it's not a pretty story over the last five or six years. There's a new generation coming through. So one always has to wonder about the timing of exit in a market like that. How do you hand it over to the next generation?

If we focus on the US for a moment to wrap up here, the US is obviously a leader in tech more broadly, but we have noticeable weak spots as well, most notably in chips. What are the top one or two things we need to do from a policy point of view to ensure that, if the world is indeed heading toward a more deglobalized structure, the US continues to be dominant?

I think the biggest thing is to remind folks that winning diverse foreign markets requires local skills. So getting more people to study abroad, getting more people to learn languages, getting more people to be acculturated into different markets. Knowing Spanish or Portuguese if you're somewhere in Latin America or Brazil, being able to speak French if you're going through parts of West Africa, etc. All of those add up to having local knowledge and a local base, and being able to compete.

I look at a Chinese company like Transsion, which owns a majority of the local handset market in Africa. There's no American equivalent, because there's just not a group of Americans who have the local market-entry knowledge and skills to be able to compete in these countries. And so that is a huge gap. I would put it as one and two. If you don't have the local skills, there's no way to compete against others who do.