“In the 21st century, whoever controls the flows of data controls the architecture of power.”
In public debate, submarine cables often appear as technical projects associated with connectivity, digital commerce or telecommunications modernization. However, behind these invisible routes under the ocean lies one of the most critical infrastructures of the 21st century. About 95% of global internet traffic, including financial transactions, government communications, and strategic business operations, travels through submarine cables. Without them, the digital economy simply does not work.
These cables aren’t just data conduits. They are arteries of the international financial system, electronic commerce, artificial intelligence and strategic communications between states. Its layout, ownership and control have implications that go far beyond engineering. They determine information routes, points of vulnerability and margins of influence in an increasingly interconnected and competitive world.
In this context, the project of a submarine cable that directly connects Chile with Asia, with the participation of a Chinese company, transcends the commercial sphere. The initiative was interpreted by some as an opportunity for digital integration with the Asia-Pacific. On others, as a move that alters the strategic balance in a region where competition between the United States and China has intensified in the technological field.
The U.S. diplomatic reaction, including the revocation of visas to officials linked to the process, made it clear that the debate was not merely technical. It was a clear political signal about the importance that Washington attaches to the control and security of critical infrastructures in its strategic environment.
The conflict, in short, is not just about a cable. It’s about who designs and controls the digital architecture of the South Pacific in an era where power no longer circulates solely through traditional trade routes, but through data flows that sustain the global economy.
- Digital infrastructure as a strategic asset
Submarine cables are no longer just technical infrastructure: they are critical arteries of global power. Whoever controls the flow of data controls information, commerce, and security. In the competition between the United States and China, digital connectivity is pure geopolitics
I.1 Submarine cables, the backbone of the global economy
More than 1.4 million kilometers of submarine cables run through the oceans, connecting continents, financial cities, and technology hubs. This invisible network forms the true backbone of the contemporary digital economy. Unlike satellites, which handle a tiny fraction of global traffic, these cables carry about 95% of the data that circulates on the internet. They are physical infrastructure, installed on the seabed, which supports a seemingly intangible digital architecture.
On top of this network rest trillions of dollars of financial transactions every day, sensitive government communications, global logistics operations, and interconnected defense systems. Stock exchanges, international payments, and digital platforms depend on their stability. So do military communications and strategic exchanges between states. The contemporary economy is not only digitized, it is wired under the ocean.
When a cable is interrupted by technical failures, maritime accidents, or natural events, the effects can be felt immediately in markets and regional connectivity. Delays in financial transactions, data traffic congestion and temporary vulnerabilities show that this infrastructure is not secondary. The digital economy depends on a physical network that, although invisible to most, constitutes one of the most sensitive strategic assets of the 21st century.
I.2 Security, data and Sovereignty
Submarine cables don’t just carry business information. They also move financial data, diplomatic communications and traffic linked to national security. The global market for data center services and international connectivity exceeds $300 billion annually, and a substantial portion of that flow depends on submarine networks. In this context, the possibility of data interception or privileged access to sensitive information is not an academic hypothesis, but a real concern in the strategic calculations of the powers.
Submarine routes also present physical vulnerabilities. Repairing a cable can cost anywhere from $1 million to $5 million per incident, depending on the depth and location. Even more critical is the financial volume that circulates through these networks. Global foreign exchange markets mobilize more than USD 7 trillion daily, while international payment systems and stock market transactions process additional trillions every day. A significant disruption at key nodes can lead to delays, volatility, and systemic risks in a highly interconnected financial ecosystem.
The dominance of strategic nodes and landing stations gives influence over the regional data architecture. In addition, this infrastructure is dual-use. It is used for e-commerce and videoconferencing, but also for intelligence, defense, and government coordination. The distinction between civilian and military becomes blurred in the digital age.
A wire is not neutral. It is a strategic infrastructure.
- II The United States and China, competition for digital architecture
The dispute is no longer only commercial; it is structural: who designs and finances the network that sustains the 21st century? The United States seeks to preserve its technological primacy; China expands its global digital influence. The architecture of connectivity has become strategic terrain.
II.1 China’s Technology Strategy
Over the past two decades, China has driven a sustained expansion of its technology companies beyond its borders. Telecommunications, digital infrastructure, and cloud services companies have been involved in strategic projects in Asia, Africa, and Latin America, backed by state financing and development banks. The Chinese digital sector mobilizes investments that exceed USD 50,000 million per year in international technological infrastructure, consolidating its presence in emerging markets.
The so-called Digital Route, a technological component of the Belt and Road Initiative, has channeled investments in fiber optics, 5G networks, data centers and satellite systems. It is estimated that commitments linked to this digital dimension have exceeded USD 20,000 million on different continents. Beyond connectivity, the objective has been to integrate infrastructure, technological standards and services under a coherent and competitive ecosystem on a global scale.
In Latin America, Chinese investment in telecommunications and energy has reached figures of more than USD 30,000 million accumulated in the last decade, including participation in mobile networks, fiber optic projects and financing of critical infrastructure. At the same time, China dominates about 70% of the world’s production of telecommunications equipment and a significant proportion of the manufacture of electronic components.
China does not only export goods. Export systems.
II.2 The American reaction
In the face of China’s technological expansion, the United States has responded with a combination of regulatory restrictions, industrial subsidies, and active diplomacy. Export limitations on advanced semiconductors and chip-making equipment are part of a strategy aimed at preserving critical technological advantages. The central argument has been national security, understood not only in military terms, but also in economic and technological terms.
The U.S. Congress approved incentives for more than USD 52,000 million aimed at strengthening domestic semiconductor production, along with tax credits that could exceed USD 100,000 million in associated private investments. This industrial policy seeks to reduce dependencies in key stages of the digital chain and ensure that critical infrastructure remains under reliable jurisdiction from Washington’s perspective.
In parallel, U.S. diplomacy has intensified its presence in digital infrastructure projects in strategic regions, promoting security standards and risk assessments in telecommunications, data centers and submarine cables. The protection of digital chains has become an explicit priority in bilateral and multilateral agreements.
From this perspective, digital infrastructure is not a purely commercial matter. It is part of an expanded strategic perimeter that includes networks, data, and technology platforms.
Washington interprets digital infrastructure as part of its strategic perimeter
- III Chile on the Pacific chessboard
Chile is not a spectator: it is a point of connection between South America and Asia-Pacific. Its geographical position and institutional stability make it an attractive node for digital infrastructure. In the global technological dispute, his decision will have strategic implications.
III.1 The cable project and its initial approval
The project of a submarine cable that directly connects Valparaíso with Asia was presented as a strategic initiative to strengthen Chile’s position in the digital ecosystem of the Pacific. The projected route sought to establish a direct link to Asian technology centers, reducing reliance on intermediate nodes in North America and improving latency for financial services, e-commerce, and data transmission.
The participation of Chinese companies in the study and eventual development of the route was part of a broader trend of Asian investment in Latin American infrastructure. At the regional level, Chinese cumulative investment in energy, telecommunications and mining exceeds USD 100,000 million in the last decade, consolidating a significant presence in strategic sectors. The cable was interpreted by some as a natural extension of that technological cooperation.
From an economic point of view, the initiative was justified in terms of competitiveness. A direct connection to Asia could reduce data transit costs, improve digital services, and position Chile as a regional connectivity platform, with potential impact on data centers, digital trade, and financial services that mobilize billions of dollars annually in the region.
Chile was looking for direct connectivity with Asia…
III.2 The diplomatic crisis and the revocation of visas
The U.S. reaction to the cable project was not limited to technical statements. The revocation of visas to officials linked to the process was a high-level political signal. In diplomacy, this type of measure is not adopted because of minor discrepancies. They represent formal warnings about matters considered sensitive to strategic security. The implicit message was that digital infrastructure is not a neutral field in global technological competition.
The episode opened a debate in Chile on sovereignty and decisional autonomy. Can a country define its critical infrastructure without considering the sensitivities of major powers? To what extent does digital integration with Asia imply political costs in the relationship with the United States, one of Chile’s main trading partners, with bilateral exchanges that exceed USD 30,000 million per year? The issue transcended the technical and settled in the geopolitical terrain.
Internally, the controversy generated political tensions and questions about the assessment of strategic risks. The discussion did not only revolve around connectivity, but also about international positioning. The cable became a symbol of a larger dilemma: how to balance relations with two economies that account for more than 40 percent of the world’s GDP.
Local infrastructure, global consequences.
- IV Geoeconomics and Digital Fragmentation
Connectivity is no longer neutral: it is inscribed in blocks of technological and regulatory influence. Competition between powers is pushing towards an increasingly fragmented global network. Geoeconomics redefines the digital map of the world.
IV.1 Towards two parallel technological systems?
Competition between the United States and China is not limited to one-off projects. It is configuring technological ecosystems with their own logics. On the one hand, the Western ecosystem, articulated around US and European companies, dominates the development of advanced software, cloud services and semiconductor design. The main technology companies in the United States concentrate a market capitalization that exceeds USD 10 trillion, which reflects their structural weight in the global digital economy.
On the other hand, China has built an integrated digital ecosystem that encompasses infrastructure, equipment manufacturing, e-commerce platforms, and digital payment systems. Its domestic market, with more than 900 million internet users, has allowed it to scale its own solutions and export them to third countries. The cumulative investment in 5G networks, fiber optics and data centers exceeds USD 150,000 million, consolidating standards and technologies that do not always coincide with Western ones.
The coexistence of these systems poses the risk of a progressive fragmentation of technical standards, regulatory frameworks and security protocols. If each bloc prioritizes its own digital architecture, data trading and interoperability could become more complex and costly, affecting global chains that move trillions of dollars annually.
The world could be divided into parallel technological blocks.
IV.2 Latin America between two architectures
Latin America has become a relevant space within China’s technological expansion. Over the past decade, cumulative investments by Chinese companies in energy, mining, telecommunications and transportation in the region have exceeded $140 billion. In the specific field of telecommunications, Asian companies have participated in 4G and 5G network deployments, fiber optic projects and provision of equipment for local operators. This presence is not marginal, but structural in several countries.
At the same time, the region maintains a historical dependence on financial, technological and commercial infrastructure linked to the United States and Europe. Trade with the United States exceeds USD 800,000 million annually considering the region as a whole, and a large part of the digital services used by Latin American companies operate on Western platforms. This double insertion generates a complex interdependence that cannot be resolved in binary terms.
The regional strategic dilemma is not to choose between two powers, but to manage a simultaneous relationship with both technological architectures. Every decision in digital infrastructure, data centers or submarine cables acquires a geopolitical dimension that transcends the commercial. The region is not a spectator. It is a field of dispute.
- V Beyond the cable, the control of the future
It’s not just about physical infrastructure, but about who defines standards, data, and technological sovereignty. The cable is the foundation; The real power is in the governance of the digital flow. The architecture of the 21st century is at stake in this dispute.
V.1 Data, data centers and digital sovereignty
Submarine cables are just the visible layer of a larger architecture. The real economic value is concentrated in the data centers that store, process, and distribute information. The global market for data center services exceeds USD 300,000 million annually and continues to expand at sustained rates. These facilities, which house servers and storage systems, have become critical infrastructure for governments, banks, energy companies, and digital platforms.
The operation of these centres requires significant energy consumption. A single large-scale data center can require investments of more than $1 billion and consume as much electricity as a medium-sized city. Globally, data centers account for a growing percentage of electricity demand, directly linking digital sovereignty to energy security and infrastructure planning.
Artificial intelligence depends on this integrated network of cables, computer centers, and energy. Training advanced models can cost tens or hundreds of millions of dollars in processing power. Without stable connectivity and access to critical infrastructure, the ability to develop and scale data-driven solutions is greatly reduced.
The cable is only the first layer of the system.
V.2 Cooperation or confrontation?
The growing digital interdependence between economies that together account for more than 60% of global GDP requires governance frameworks that transcend immediate competition. Global trade in digital services exceeds USD 4 trillion annually and depends on minimum rules for interoperability, data protection and technical stability. Without multilateral agreements, the fragmentation of standards could make transactions more expensive, limit investment flows, and generate systemic costs that affect both developed and emerging economies.
The risk of technological escalation is not hypothetical. Cross-restrictions on semiconductors, advanced software, or telecommunications infrastructure can trigger regulatory retaliation that affects supply chains worth hundreds of billions of dollars. Economic history shows that protracted trade wars erode growth and confidence. In the digital environment, where innovation cycles are accelerated, uncertainty can hold back strategic investments in critical infrastructure.
However, there are also spaces for coordination. Technical standardisation, joint protection of submarine cables, and cooperation in cybersecurity are areas where convergence is possible. Structural competition does not exclude mechanisms for shared management of global risks.
Competition does not have to become open conflict.
EPILOGUE
The debate over a submarine cable reveals a deeper transformation in the global power structure. The twenty-first century is no longer defined only by the control of territories or traditional energy resources, but by the architecture that sustains the circulation of data. Digital infrastructure, computer centers, fiber optic networks and technological platforms constitute the new material base on which contemporary economies operate. The competition between the United States and China is not a conjunctural anomaly, but the expression of a transition to an order where technology organizes the strategic balance.
For Latin America, this scenario calls for a rigorous cost-benefit assessment. The region maintains significant trade links with both powers and receives investments that together exceed hundreds of billions of dollars in key sectors such as energy, mining, telecommunications and manufacturing. Every decision in critical infrastructure, from a submarine cable to a data center, has implications that transcend the technical and are inserted into a broader geoeconomic context.
Sovereignty does not mean isolation or automatic alignment. It implies analytical capacity, diversification of relationships and institutional strengthening to evaluate technological risks and development opportunities. Digital integration can be a driver of growth, but it requires clear regulatory frameworks, transparency, and an understanding of the global balances at stake.
Technological competence is a structural reality. However, its management will determine whether it translates into fragmentation and escalation or into regulated innovation and coexistence. In a world where digital trade exceeds $4 trillion annually and the data-driven economy continues to expand, the stability of critical infrastructure is a shared interest.
In the digital age, power is not only exercised with armies or trade, but with the ability to decide where the world’s information circulates.
Bibliography
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