The New Tech Nationalists: Silicon Valley’s 2025 Power Play

In September 2022, Ukrainian officials made an urgent request for Elon Musk’s Starlink to extend satellite coverage to Sevastopol. Their plan: to launch a surprise drone attack on Russian ships. Musk declined, claiming he didn’t want his company implicated in acts of war, even though Starlink, a vital internet service provider to the war-torn nation since the Russian invasion in February 2022, had already been used extensively in combat. This rejection raised urgent questions for the Pentagon, which relies on Starlink not just in Ukraine but across multiple operational arenas.

Since the Iraq War, the U.S. has outsourced most logistical and support functions. Today, it spends more on third-party contracts than on government employees. Agencies within the National Intelligence Program—including the CIA, NSA and NRO—rely on contractors for over 70 percent of their workforce. This privatization has hollowed out public expertise and handed sensitive infrastructure to corporations that answer not to voters, but shareholders. Unelected and profit-driven, tech corporations aren’t bound by democratic accountability. When governments outsource core infrastructure, they surrender operations and agency, and, as states lean on Silicon Valley, they lose the leverage to regulate it. While Silicon Valley’s entanglement with government isn’t new, over the past year, it has graduated from backstage influence to front-row power, shaping not just services but policies.

The European Union has fought back. In April 2025, the European Commission fined Apple and Meta €700 million under the Digital Markets Act (DMA), and continues to pressure X and Google. American firms still dominate the lobbying ecosystem in Brussels, accounting for over 20 percent of influence. The U.S., by contrast, operates on court precedent and antitrust compliance. When billionaires control the satellites, surveillance, speech platforms and A.I. systems used by both citizens and states, who governs? And if the government can’t regulate them, who can?

The Billionaire Who Became the Bureaucracy

Musk began as the scrappy co-founder of Zip2 and PayPal. Now, he presides over satellites, speech platforms, space exploration, neuroscience and transportation. In 2022, he closed a $44 billion deal to acquire Twitter, vowing to “restore free speech.” Within weeks, journalists were banned, fact-checking was dismantled and the platform’s algorithm began amplifying right-wing content. During the 2024 election, Musk pledged $45 million per month to a pro-Trump super PAC. Not surprisingly, both Musk’s and Trump’s posts surged in visibility.

On his first day in office, President Donald Trump announced the creation of the Department of Government Efficiency (DOGE), appointing Musk to lead it. DOGE’s mission: gut federal bloat. The result? Almost 60,000 federal workers laid off, DEI programs dismantled and critical contracts slashed across FEMA, FAA and the National Weather Service. In February, delayed FEMA contracts slowed the recovery response after wildfires in Los Angeles. In April, Senator Chuck Schumer blamed FAA layoffs for the Newark Airport security breach that grounded hundreds of flights. In May, cuts to NWS overnight storm coverage staff preceded 42 tornado-related deaths in Kentucky and Missouri, just weeks after five former NWS leaders signed an open letter warning that “weather forecast offices will be so understaffed that there will be needless loss of life.” Earlier this month, as flash floods ravaged Texas, killing hundreds and displacing multiples more, Trump’s cuts to FEMA dropped the agency’s call response rate from 99 percent to just 15.9 percent, leaving thousands of pleas for help unanswered. 

Meanwhile, Musk’s companies are thriving. Last week, just days after his A.I. chatbot Grok drew backlash for generating Neo-Nazi content on X, the Department of Defense awarded the platform a $200 million contract. The deal came less than 10 days after Musk launched The America Party, with an ethos, in part, shaped by Curtis Yarvin, the neo-reactionary blogger whose post-democratic writings have gained traction among Silicon Valley technocrats—and, of course, his very public breakup with President Trump. In April, one month before Musk’s stint in the White House soured, a $5.9 billion contract from the U.S. Space Force locked in 28 SpaceX missions. In early May (on National Space Day!), the administration proposed 24 percent budget cuts to NASA’s moon program, Artemis, eliminating climate-monitoring satellites and redirecting $1 billion to Mars, which Musk has been vocal about colonizing since 2001. As Musk dominates satellites and rockets, Peter Thiel’s empire operates closer to home—embedding itself in the systems that decide who gets policed, who gets watched and, increasingly, who gets to live.

The Surveillance State 

Thiel’s surveillance software, began in 2004 with CIA seed money and a Tolkien reference. Its Gotham platform, capable of hoovering up vast swaths of government and private data, now powers predictive policing, immigration raids and battlefield targeting. Since 2013, it’s been used by the DHS, CBP, the Pentagon and LAPD. Last month, Palantir’s role in ICE raids and predictive patrols in Los Angeles drew public ire. Mayor Karen Bass called L.A. a “test case for what happens when the federal government moves in and takes the authority away from the state or local government.” It was not, however, the first time a major U.S. city piloted surveillance programs for private contractors. From 2012 to 2018, Palantir partnered with the New Orleans Police Department to test its Gotham software, generating “heat lists” of individuals deemed high-risk for violent crimes. Around the same time, the LAPD launched Operation LASER using similar predictive logic. A report from Stop LAPD Spying flagged algorithmic bias and over-policing, disproportionately affecting Black and Latino communities. 

On an international scale, governments across Europe turned to American firms during the 2015 refugee crisis to manage migration flows and counter terrorism. Several countries, including Germany and France, adopted Palantir’s Gotham software. While at least four contracts were canceled less than five years later, citing flawed analysis, racial profiling and privacy violations, Palantir remains embedded in military operations worldwide, raising sharp questions about its accuracy and bias. Both Ukrainian and Israeli forces reportedly use Gotham to process real-time battlefield data from drones, satellites and soldiers on the ground. According to The Nation, Israeli forces have used Palantir’s A.I.-assisted targeting in Gaza, intensifying scrutiny as humanitarian workers, journalists and medical personnel are killed in strikes. 

Thiel believes technology will one day replace human judgment entirely, in everything from governance to warfare. Gaza shows what’s at stake when life-or-death decisions are outsourced to an algorithm, but war zones aren’t the only testing ground for tech-run governance. Billionaires are building cities.

Privatizing Power, One City at a Time

In 2009—a year before co-founding the Seasteading Institute on aspirations of autonomous, floating city-states beyond government reach—Thiel declared he “no longer believes that freedom and democracy are compatible.” Though Seasteading faded, the institute seeded a vision of privatized governance, inspiring such neolibertarian manifestos as Patchwork, Yarvin’s 2017 outline of a political system that imagines a post-democratic world ruled by corporate-owned “patches,” published under the pen name Mencius Moldbug. Former Coinbase CTO and Silicon Valley futurist Balaji Srinivasan expands directly on Yarvin’s vision in The Network State, advocating for digital-first communities that organize online to raise capital, define shared goals and acquire land. Srinivasan calls this approach a form of “Tech Zionism,” drawing on the idea of diaspora-fueled state formation, but with corporate land buys instead of territorial conquest.

Próspera, a privately governed startup city on Honduras’ Roatán Island, is Silicon Valley’s sovereignty experiment in miniature. Backed by U.S. venture capital, including Thiel and Srinivasan, Próspera operated under the ZEDE framework, levying its own taxes, enforcing corporate-friendly regulations and establishing private courts with little national oversight. But the initiative drew fierce opposition: human rights protests, environmental concerns and, in 2021, the abolishment of ZEDE zones under new Honduran legislation. Próspera responded by suing Honduras for $11 billion—nearly one-third of the country’s GDP.

This push for privatized governance isn’t limited to Honduras. In Texas, Musk has ramped up political spending, hiring more lobbyists than ever this year and lavishing state lawmakers with tens of thousands in meals and gifts. In May, residents of Boca Chica—many SpaceX employees—voted to rebrand the Texas city as Starbase: a de facto company town with full control over development and zoning. Environmental groups, Indigenous communities and non-SpaceX residents warned it would restrict access to sacred sites and accelerate damage to protected lands. The same logic now extends to public land. Trump’s Big Beautiful Bill, debated this spring, aimed to allow privatization of federal land for corporate development. After a last-minute push by environmental advocates, the bill was rewritten to exclude the sale of nearly 300 million acres. 

However, the broader vision remains alive: privately owned “Freedom Cities,” floated during Trump’s 2024 campaign as low-tax, corporate-run enclaves—supported by the same investors behind Próspera (Thiel and Marc Andreessen, through their firm Pronomos Capital). From government surveillance to private cities, the line between state and startup has all but dissolved. Over the past decade, tech corporations have embedded themselves in public infrastructure. Today,  government agencies depend on them for essential operations, from disaster response to national security. But public skepticism is growing as costs become visible: delayed recovery efforts, mass surveillance and widening accountability gaps, all while taxpayer dollars flow into private contracts. As digital ethics scholars Nick Couldry and Ulises Mejias argue in their book, Data Grab, today’s tech monopolies treat public infrastructure, privacy and personal data as a digital terra nullius—colonial no-mans-land. But they aren’t satisfied with power in the cloud. Like traditional colonizers, they want land, too.