How Techno Politics is Dismantling the Rules‐Based Order

By Andrew Horton

In late 2025, during a closed-door regional meeting, a senior Australian official posed a deceptively simple question: What happens if the rules stop working?

There had been no dramatic catalyst—no invasion, no treaty rupture. Only a steady accumulation of cases where the mechanisms Australia had relied on for decades were failing to deliver outcomes. Not because the rules had disappeared, but because power had shifted elsewhere.

For Australia, the rules-based order has never been abstract diplomacy. It has been a strategic defence mechanism. As a mid-sized, trade-dependent democracy operating on the edge of a volatile Indo-Pacific, Australia has relied on legal principles and multilateral institutions—from UNCLOS to the WTO—to ensure geography did not predetermine its fate.

That architecture is now under strain.

As 2026 unfolds, global power is increasingly determined not by treaties, norms or institutional consensus, but by control over foundational technologies. Semiconductors, software, data and digital infrastructure have become the new terrain of geopolitical competition. If this trajectory continues, Australia risks drifting from sovereign actor to downstream user—less a nation exercising agency than an “application” running atop someone else’s operating system.

From Legal Order to Technological Power

The post-war system rested on a simple conception of sovereignty: authority over territory, exercised through law. Power flowed from military capability, economic weight and diplomatic influence. Technology mattered but operated within the system—not above it.

That hierarchy has inverted. Semiconductors, cloud compute, AI models, subsea cables and satellite constellations now shape strategic outcomes more decisively than legal forums or arbitration panels. The question is no longer who governs land, but who governs the stack.

Mark Carney captured this shift at Davos earlier this year: “We are in the midst of a rupture, not a transition... When the rules no longer protect you, you must protect yourself.”

This rupture is evident in the way technology has moved from being a traded commodity to a governing framework. When the United States imposes extraterritorial export controls on advanced lithography equipment, or when China embeds its digital governance architecture across the Global South, these are not marginal disputes. They represent a new form of sovereignty—algorithmic, infrastructural and largely beyond the reach of 20th-century institutions.

Technology is no longer regulated by the rules. Increasingly, it is the rule.

The Weaponisation of Interdependence

For decades, policymakers assumed that economic integration would reduce the risk of conflict. Interdependence was expected to stabilise the system.

Instead, it has become a form of leverage.

Global supply chains are now assessed less for efficiency than for strategic vulnerability. Control over advanced chip fabrication, rare-earth processing or battery minerals can generate more influence than conventional military assets. Openness— once one of Australia’s greatest strengths—is increasingly a point of exposure.

The European Council on Foreign Relations has described this moment bluntly: technological sovereignty becomes existential “when markets are hijacked by state actors and interdependencies are turned into vulnerabilities.” The shift from offshoring to friend-shoring is not a policy fad. It is evidence of the global economy fragmenting into competing technological blocks—each with its own standards, exclusions and enforcement mechanisms.

For Australia, the irony is sharp. The very powers that built the rules-based order are now bypassing it in the name of national security. The shield Australia relied on is thinning at the moment it is needed most.

The Rise of the Tech-States

Perhaps the most under-examined element of this transition is the erosion of the state’s exclusive role in geopolitical influence. The old order was a conversation between governments. The new order includes platform companies and infrastructure custodians with quasi-sovereign power.

When a private firm can determine whether a country has access to satellite communications during a crisis, or when an algorithm can shape domestic political discourse more effectively than a foreign intelligence agency, the limits of traditional governance become impossible to ignore. The UN Charter was not designed for a world in which digital infrastructure is controlled by a handful of firms operating at planetary scale.

Three models of “sovereign infrastructure” are now emerging:

• The United States model: innovation-driven, commercially led, increasingly constrained by national security controls.

• The Chinese model: a state-integrated digital ecosystem that fuses infrastructure, data and governance.

• The European model: a regulatory pathway that attempts to shape global norms through privacy, data protection and AI governance.

Through AUKUS and its critical minerals diplomacy, Australia has aligned its hardware trajectory with the first model. But hardware alone does not constitute sovereignty. Without control over data flows, standards and digital resilience, sovereignty erodes quietly. A nation may remain formally independent while becoming functionally dependent.

Navigating the Age of Rupture

Australia’s challenge is no longer how to restore the old order, but how to operate effectively without it.

As Singaporean President Tharman Shanmugaratnam warned earlier this year, the world risks a “self-reinforcing decline into disorder” in which trust—the currency of the old system—is replaced by resilience. Sovereignty will increasingly be measured not by legal status but by technological capability.

Australia’s response should centre on three priorities.

1. Treat technology literacy as statecraft.

Diplomacy, defence and economic policy now require fluency in compute capacity, data governance and AI supply chains—not only trade rules and military posture.

2. Pursue selective sovereignty.

No country can control every layer of the technological stack. Australia should focus on sectors where it holds genuine leverage—critical minerals processing, quantum sensing, next-generation energy technologies.

3. Prioritise coalitions over institutions.

As global forums stagnate, minilateral groupings—AUKUS, the Quad and emerging tech alliances—will increasingly set the rules of the silicon age.

The rules-based international order is not dead. But it is no longer the primary engine of global history. Control over technology now shapes national destiny more decisively than legal principle. For Australia, the choice is clear: master the tools of the new order—or accept the rules drafted by those who already have.