Why Big Tech Matters for National Security

America's national security increasingly depends on maintaining technological superiority in artificial intelligence, quantum computing, semiconductors, and other advanced technologies. So, as geopolitical tensions rise and technological competition with China intensifies, one fact becomes clear: America's leading technology companies are not just economic actors-they produce strategic national security assets.

The top five U.S. technology companies invest over $150 billion annually in research and development-more than any country except the United States and China. This massive private-sector investment directly strengthens America's national security by advancing our technological capabilities, which will determine military and economic power in the coming decades. Breaking up these companies or otherwise weakening them, as some advocate, would splinter this crucial R&D capability precisely when America needs it most.

Critics of big tech argue that breaking up or weakening these companies would make space for others and somehow lead to more innovation and R&D investment. They claim that the resulting smaller firms would generate more patents and technological breakthroughs. This argument fundamentally misunderstands the economics of R&D and the specific requirements of advanced technology development critical to national security.

Large technology companies achieve crucial economies of scale and scope in their R&D efforts that smaller firms cannot match. They can spread massive research costs across larger output levels, enabling investments in high-risk, high-return projects that would be economically unfeasible for smaller companies. While critics focus on raw patent counts or total R&D dollars, they miss a crucial point: Not all innovation is equal when it comes to national security. The advanced technologies that matter most-quantum computing, next-generation semiconductors, advanced AI systems-require the large-scale, sustained investment only big tech can provide.

America's technological edge has historically come from its private-sector dynamism. Unlike China, which injects massive state funding into its national champions to go out and take U.S. global market share, the United States relies heavily on private-sector R&D for technological advancement. Our leading tech companies, driven by market incentives and competitive pressures, make long-term investments that government spending alone cannot match. This private-sector-led model has been America's strength, but it requires companies operating at sufficient scale to make these investments.

Consider advanced technologies like artificial intelligence and quantum computing-capabilities with critical implications for national security. In AI, developing frontier models like GPT-4 requires investments far exceeding $100 million in computational costs alone. The scale of infrastructure needed is so massive that OpenAI, Oracle, and SoftBank just announced a new partnership to invest up to $500 billion in AI data centers and energy generation. In quantum computing, Google's achievements-from demonstrating quantum supremacy in 2019, to its Willow chip's breakthrough in quantum error reduction in 2024-show what's possible when companies can sustain massive, long-term R&D investments. With a few exceptions, such as D-Wave, smaller firms might collectively invest similar amounts in R&D, but they have a hard time pooling resources effectively enough to make the massive, concentrated investments needed for breakthrough advances. Both AI and quantum computing require specialized facilities, rare materials, and elite research teams. While China can funnel state resources into quantum research, the United States needs companies with huge resources to make long-term, high-risk investments that could deliver quantum breakthroughs. Big tech companies are the best candidates.

Big tech companies play an essential role beyond their direct R&D investments-they demonstrate what's possible, catalyzing investment across the entire technological ecosystem. Google's quantum breakthroughs didn't just advance its research; they also sparked increased investment across the whole quantum computing landscape. Smaller companies and researchers suddenly found it easier to attract funding because Google had demonstrated the technology's viability. This ecosystem development strengthens America's overall technological capabilities.

The current structure of the tech industry promotes innovation through intense competition among large players and a vibrant start-up ecosystem. Amazon, Microsoft, and Google fiercely compete in cloud computing, and Meta and Google vie for leadership in AI. Social media companies such as Meta, Google, X, LinkedIn, and, of course, TikTok all compete intensely for "eyeballs." This competition drives innovation while allowing companies to achieve the scale needed for massive R&D investments.

The argument for targeting Big Tech ignores these fundamental realities of advanced technology development. While a larger number of smaller firms might generate more patents in aggregate, they would lack the concentrated R&D capability needed to compete in the most strategically important technologies. In a world where China can direct enormous state resources toward technological development, maintaining strong private-sector leaders isn't just an economic preference-it's a national security imperative. The efficiency gains from economies of scale and scope in R&D, combined with the ability to make massive, concentrated investments, make big tech companies crucial assets in America's technological competition with China.