The Digital Feudal Matrix: The Good, the Bad, and the Ugly of AI Age of Abundance

The Digital Feudal Matrix run by the US is not yet set in stone, but the Whitehouse dinner on September 4th shows the coordinated efforts of the tech cartel are at an advanced stage.

The quite frankly obscene amount of money and resources - remember our pensions are riding on this not the middlemen's money - being thrown at Artificial Intelligence, needs fervent debate about our collective future. On the one hand, the operating system's high priest (or chief Rabbi, Sam Altman promises an "age of abundance," a world where AI unlocks unprecedented productivity and prosperity.

On the other, I see a "digital feudal matrix," a stark future where the US tech cartel, in collaboration with its world policeman government, hoard resources and dictate terms to a dependent western global populace. China and the BRICS will go a different but in reality similar way.

The truth, rare as rocking horse manure in our daily feeds, lies in our collective ability to shape this unfolding threat to people and planet given the resources being thrown at Project AI. Our choices today – particularly regarding competition, taxation, and economic models – will determine whether we inhabit a fabulous, fair, free and opportunistic world, or one where an aspirational middle class is relegated to living under a rich man's table.

The Ugly: The Digital Feudal Matrix

The most pessimistic vision sees the current trajectory leading directly to a "digital feudal matrix." This theory posits that the symbiotic relationship between dominant tech companies and powerful states (as observed in various strategic alignments) will solidify the reset and a new form of global control.

• Tech Cartel Dominance: A handful of tech giants, leveraging their vast financial and data resources, would act as modern-day "lords." They would control the critical digital infrastructure, from AI models to the supply chains they optimise, effectively becoming gatekeepers and rent-seekers to the global economy.
• Hoarding of Wealth and Resources: The immense, often untaxed, wealth accumulated by "tech bros" would continue to consolidate. This wealth, rather than solving global problems, would be reinvested into ventures that further entrench their power – advanced AI research, space colonisation, and other futuristic endeavors – while neglecting immediate societal needs.
• Erosion of Competition and Employment: Small and Medium-sized Enterprises (SMEs) are already struggling to survive, crushed by the network effects and deep pockets of the tech behemoths. The rise of AI will lead to widespread job displacement across various sectors, creating a large, unemployed, or underemployed populace with no resilience to help our poor selves.
• Programmable Dependence: Faced with mass unemployment, Universal Basic Income (UBI) might be introduced, but within this "digital feudal matrix," it would not be a force for good. Instead, it could be tied to programmable digital money, allowing the ruling elite to dictate what can be bought, where it can be spent, and when. Citizens would find themselves living in co-dwellings "provided" by the cartel, consuming what and when they want us to, effectively becoming digital serfs. Our resilience would be gone, with the choice reduced to working for the cartel or existing only on their terms. This would clearly not be a fair or opportunistic world capable of supporting an aspirational middle class.

The Bad: Unchecked US Dominance With No UK or European Competition

Even if the Digital Feudal Matrix can still be avoided, the current trajectory points to a challenging landscape for UK and European competition. The United States has established a significant lead in AI, fueled by a private-sector-led cartel model, massive venture capital investment and a governmental view of AI as a national security imperative and global operating system.

This has several implications:

• Investment and Talent Gap: Europe lags significantly in private AI investment and struggles with a "talent drain" as top researchers and engineers are lured to the US by better salaries and resources.
• Regulatory Friction: While the EU's AI Act and Digital Markets Act (DMA) aim to foster fair competition and protect citizens' rights, they are often viewed by US officials as "economic lawfare." This creates transatlantic tension and the treat of withdrawing its role in NATO over Ukraine. We could end up with a fragmented global digital economy where European companies would struggle to scale internationally.
• Government-Industry Symbiosis: The visible alignment between the US government and its tech sector, exemplified by White House dinners and strategic collaborations, signals a clear intent to maintain and extend American AI dominance. This "bully its way" approach, aims to establish US AI as a world operating system primarily for the profit motive of US players at the expense of non-US entities.

This scenario suggests a world of highly concentrated power, making it exceedingly difficult for other nations and their businesses to genuinely compete.

The Good: An Age of Abundance for All Through Fair Competition and Sustainability

The "age of abundance" does not have to be a thinly veiled dystopia. A truly positive future, where the global community can compete and thrive, hinges on the implementation of three critical principles: fair market competition, fair taxation, and a circular economy.

• Robust, Fair Market Competition: This is the antidote to the "tech cartel." Strong antitrust regulations, like the EU's DMA and similar initiatives in the UK, are crucial. By preventing dominant players from stifling innovation, acquiring emerging competitors, or unfairly prioritizing their own services, we can foster a dynamic digital landscape. This allows SMEs to flourish, creating diverse opportunities and ensuring that the benefits of AI are distributed widely, rather than being hoarded by a few. Imagine a world where diverse AI applications emerge from every corner of the globe, rather than just a handful of Silicon Valley labs.
• Progressive, Fair Taxation: To combat the hoarding of wealth and to fund societal needs in an age of AI-driven productivity, a new fiscal paradigm is essential. This could involve significantly more progressive taxation on corporate profits, wealth taxes, or even taxes on automated labor. Such revenues could fund a truly empowering UBI – one that provides a genuine safety net, enabling individuals to pursue education, creative endeavors, or community-building initiatives, free from exploitative labor conditions. It would transform UBI from a tool of control into a foundation for human flourishing, without dictating consumption patterns via programmable money.
• Transition to a Circular Economy: Moving beyond the destructive "take, make, break, and waste" linear economic model is paramount. A circular economy focuses on designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. This approach not only addresses our planet's finite resources but also creates new, localized jobs in repair, remanufacturing, and sustainable resource management. It builds resilience in local economies, reduces reliance on complex global supply chains controlled by a few, and ensures that the "abundance" isn't merely consumable goods but also sustainable practices and environmental health.

The digital future is not yet set in stone but the Whitehouse dinner on September 4th shows their coordinated efforts are at an advanced stage. While the forces pushing towards a concentrated, potentially feudal, power structure are strong, the tools to counter them are also within our grasp. By championing robust competition, equitable taxation, and a regenerative circular economy, we can harness the immense potential of AI to create a world of genuine abundance – one that is fair, provides true opportunity for all, and revitalizes an aspirational middle class rather than making them dependent. The choice is ours: to passively accept a digital feudal matrix or actively build a truly fabulous and equitable digital age.