Apr 16, 2020 - Technology

The threats to Big Tech in a post-virus world

Illustration: Sarah Grillo/Axios

Big Tech's newly bolstered dominance doesn't make these companies invulnerable.

The big picture: Three elements form the ground on which the tech giants built their success — cheap hardware, connectable software and the freedom to innovate. Each of these foundations already faced threats that the virus crisis has now amplified.

Cheap hardware: The tech economy relies on a simple dynamic of efficient manufacturing and process improvement that drives down the prices of expensive breakthrough products until they become cheap and universal.

  • The petering out of Moore's Law — the miniaturization dividend that drove tech for decades — has already slowed this dynamic, while new approaches like quantum computing remain impractical at scale.
  • The other driving force behind cheap hardware — globalization and specifically the transformation of China into the world's tech-manufacturing engine — is now threatened by political tensions over trade and security concerns, as well as by supply-chain disruptions caused by the pandemic.

Connectable software: Our digital civilization is built on software-all-the-way-down stacks of interdependent code. These layers upon layers of programs and libraries talk to each other using application programming interfaces (APIs) — sets of commands that let diverse companies, organizations, and individuals build services that work together.

Freedom to innovate: There's widespread consensus in Silicon Valley that the industry has thrived because it's been left relatively unregulated.

  • Most digital successes have been built by introducing new models that "disrupt" incumbents — whether it was personal computers replacing mainframes, smartphones replacing landlines, online services replacing traditional businesses, or streaming media replacing broadcast and cable.
  • These models have been so successful and popular, and during this crisis they've become so essential, that they've inspired a new argument for regulation.
  • In this view, propounded by a rising chorus of academics, pundits, and politicians, we are now too dependent on Big Tech services to leave them to the market. Instead, we should treat them like public utilities, with public oversight and community responsibilities

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Illustration: Sarah Grillo/Axios

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