The New Battlefronts of Tech
Why Latin America is a Lab for the New World Order
This post is a collaboration with The Ministry of Experiments
World politics is tending towards a paradox. Geopolitics is restoring Cold War dynamics, with states seeking technological autonomy that guarantees superiority over adversaries. However, national governments have scarcer means and more dependencies, on each other and on new actors such as technological multinationals. The geography of innovation has significantly changed and “No country alone can make an iPhone today,” as economist Eirc Beinhocker aptly puts it.
The return of spheres of influence is taking place in a world of hardwired networks, where old alliances have become less certain, with the United States taking distance from NATO. This combination is creating new battlefronts for critical technologies, where large and small countries play a new game of appropriation versus autonomy.
This trend is evident in regions like Latin America. Many Latin American countries hold an indispensable supply of resources for the development of deep tech, from raw materials to energy, and new markets. Yet, they have had, so far, wasteful institutions, disjointed ecosystems, and fragile economies to affirm themselves as strong players in global tech. Hence, they have lent themselves mostly to appropriation, giving away precious resources in exchange for basic infrastructure.
Now that there is less West and more Rest in geopolitics, how will resource-rich places like Latam re-align to the emerging world dis-order?
The Politics of Appropriation in a Newtorked World
In 1945, Vannevar Bush published an Science: The Endless Frontier. His prescient pamphlet advocated that the United States had to invest in what today we would call deep tech, to engineer advantages in knowledge into economic and military competitiveness. The world had been divided into two spheres of influence: the American West and the Soviet East. While the US could trust the Soviet Union as long as they had common enemies, peace required assurances against a possible, formidable adversary. Therefore, industrial autonomy was needed to sustain and defend one’s sphere of influence. Bush wrote:
“A nation which depends upon others for its new basic scientific knowledge will be slow in its industrial progress and weak in its competitive position in world trade, regardless of its mechanical skill.”
Eighty years after the publication of Science: The Endless Frontier, Vannevar Bush’s predictions have become the doctrines of states, from the US to China. Today, geopolitical preparedness is technological preparedness, and vice versa. We are back to the ‘60s: competition between states plays out at the technological frontier. The new Space Race is broader and more complex than the Sputnik era, ranging from Artificial Intelligence to Quantum Technologies to Biotechnologies. Now like then, breakthroughs in innovation are breakthroughs in preparedness and preemption. Every investment in inventions is a dual-use investment in a world where alliances are more fragile and conflicts are more frequent. Later on, in 1970, Bush produced another timeless work, Pieces of Action, where he stated:
“In order for great progress to be made on methods and weapons of war, there has to be a system of close joint effort of military and civilian men, especially engineers. The civilians must have independence and the opportunity to explore the bizarre; it is not enough that they be the engineers of contractors to the armed forces. Above all, there must be mutual respect and reliance. This must be present whenever we have to fight again.”
Today, the United States, China, the European Union and others are trying to repatriate these capabilities, where possible, or appropriate them. This approach is evident in the latest changes in American policy, where the Trump Administration is using tariffs as a tool to coerce adversaries and allies alike into buying or becoming Made in the USA. It’s a tit-for-tat – or eye for eye – that includes everything from the Ukraine mineral deal in exchange for protection, to the bullying of Canada into becoming American, to tariff and immigration wars with Latin American nations, to forcing the purchase of US dollars to sustain the country’s unsustainable deficit.
The Biden administration had already started, imposing export controls on technologies deemed critical for national security and offering chunky carrots to build American in America through the Inflation Reduction Act. In 2022, Taiwan Semiconductor Manufacturing Company (TSMC), for instance, received $6.6 billion in direct funding and $5 billion in low-cost loans through the CHIPS Act to build a foundry in Arizona, away from Chinese influence. As a result of Trump’s tariff touting, TSMC announced they would invest an additional $100 billion to expand its advanced semiconductor manufacturing operations in Arizona.
How China Pioneered Today’s Global Affairs
The pioneers of appropriation, however, are the Chinese. The Chinese understood early that geography is destiny, again. In fact, part of China’s National Development and Reform Commission 2024 directives include a strategic positioning of their deep tech industries in the global landscape, “as a result of a “shift on the international balance of power that is transforming the traditional division of global labour– the rise of the East and a relative decline of the West.”
China has been building a network of Silk Roads worldwide, where silk is the natural resources and minerals that are quintessential to building new tech. As Ángel Melguizo and Margaret Myers put it, “as geopolitical conditions limit China’s tech investment and trade prospects in developed country markets, many of China’s ICT and high-end manufacturing companies have sought to engage more extensively with Latin America and the Carribean and other parts of the Global South.” If the iPhone cannot come to China, then China goes to the iPhones – as the old saying goes.
They started with the African continent 25 years ago with the launch of its “go out” policy in 1999. Notably, this strategic move occurred 15 years before the introduction of the Belt and Road Initiative and its technology-focused counterpart, the Digital Silk Road. As of January 2021, China had signed 40 memoranda of understanding with sub-Saharan African continents. Years on, “Chinese technology companies permeate almost all layers of Africa’s telecommunications technologies, from undersea cables, satellites, and backbone infrastructure to applications and platforms for individual consumers”, noted academic Motolani Agbebi.
Now, China is venturing to Latin America (LATAM). Why?
New Silk Roads to Latin America
If geography is destiny, Latin America is in many ways a tech Eden. Argentina, Bolivia, and Chile form the "Lithium Triangle," containing an estimated 58% of the world's lithium resources. Lithium is the essential ingredient to building batteries, powering everyday electronics and also deep tech innovations. In deep tech—from autonomous vehicles and robotics to smart grids and AI-powered systems—lithium batteries provide the reliable, high-capacity power that enables rapid processing, mobility, and real-time data handling.
Energy independence is another fundamental component to geopolitical resilience and technological development – you must be able to power infrastructure and R&D. Latin America contains an abundance of energy, including renewable sources. In fact, LATAM generated 64% of its electricity from clean sources in 2023, substantially surpassing the global average of 39%. Within the renewable energy portfolio, Hydropower dominated at 43% of total electricity generation, followed by a 14% wind and solar share, minimally above the 13% global average.
Building on this energy foundation, Brazil is now witnessing strategic partnerships between data center operators and renewable energy providers, to fully meet the energy demands of hyperscale data centers, including those managing mixed AI workloads. Similarly, Google Cloud has embarked on constructing its second data center in Latin America, located in Canelones, Uruguay. With sustainability at its core, this facility already utilizes renewable energy for more than 90% of its matrix.
Latin America’s wealth is not only natural. The region has serious potential to become a competitive player in the global race for technological competitiveness. According to the Interamerican Development Bank, by 2023 institutional investment raised by deep tech companies in LATAM reached $2 billion, encompassing at least 340 startups. While this figure is far below the $13 billion invested in deep tech in Asia, $14 billion in Europe, and the $52 billion in the United States as of September 2024, it represents significant progress for the region.
Investment in LATAM increased by nearly 600% between 2019 and 2023—rising from under USD 300 million to USD 2 billion in just four years. The sectors involved reflect a broad spectrum of critical technologies that are at the heart of competition between China, Europe, and the US. Biotechnology (61%) and Artificial Intelligence (11%) dominate LATAM’s deep tech sector; together they represent 72% of regional startups. This balance reflects the critical role these technologies play in tackling challenges like sustainable agriculture, food security, and healthcare.
Not coincidentally, research by Melguizo and Myers shows that:
"The number of Chinese projects in Latin America grew by 33 per cent from 2018-2023, compared with the previous five-year period of 2013-2017, even as the total value declined. In other words, Chinese companies are making more investments in the region but are pursuing smaller-scale projects on average. These investments are also more focused on what China calls “new infrastructure“ (新基建), a term which encompasses telecommunications, fintech, renewable energy, and other innovation-related industries. In 2022, 60 per cent of China’s investments were in these frontier sectors, a key economic priority for the country.”
Do not be fooled by the decline in total investment by China. In reality, the Chinese government and companies recalibrated the sectors in which they invest – from brick-and-mortar to high-tech. Chinese investments shifted from canals, rails, and energy infrastructure, to deep tech, “consistent with Beijing’s laser focus on its own economic upgrading and global competitiveness”. In fact, in 2022, China's Ministry of Science and Technology had explicitly committed to enhancing scientific and technological cooperation with Latin American and Caribbean countries, with specific emphasis on technology transfer and innovation in sustainable development.
Appropriation vs Autonomy – The Latin American Dilemma
The new Chinese Digital Silk Road to LATAM could find greater space in the emptiness left by crumbling multilateralism and traditional alliances being weakened by trade wars. The wave of export controls issued by the Trump administration is aimed at slowing China down on its path to Artificial General Intelligence. But will that be enough contingency?
First, DeepSeek has stunned techies and markets by releasing competitive AI models at a fraction of the cost of American rivals, showing that the Chinese model for top-down execution can be equally effective and more resourceful. Second, the battle for chips is crucial yet only in front of the war for technological supremacy. China has started building its policies of coercion and appropriation well before its rivals, anticipating that value-based alliances would be replaced by interest-based ones.
As Martin Wolf wrote in the Financial Times: "It is possible that some allies will decide that, although they prefer the US, China is at least more predictable. That would be an insane position for these countries to be in. But it would be the almost inevitable result of Trump’s gangsterish approach to international relations." In fact, the new Cold War is much hotter on more fronts and with more players than the US and China wanting to take the stage. Take India, which now ranks in the top 5 in 45 of 64 technologies that are deemed critical by ASPI. Take Saudi Arabia and the UAE, which are spending hundreds of billions of petro-dollars to become technological and geopolitical hubs.
This might change now, with geopolitics being more populous and driven by more selfish interests. Today, as Monica Duffy Toft aptly puts it: “regime type no longer appears to hinder a sense of shared interests. It is hard power only—and a return to the ancient principle that “the strong do what they can and the weak suffer what they must.” In such a world, multilateral institutions such as NATO and the EU would be sidelined and the autonomy of smaller nations threatened.”
With less West and more Rest contending for tech dominance, Latin America will surely be a new battleground for innovation. Who appropriates what remains to be seen.
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