Digital Disintegration: Techno-Blocs and Strategic Sovereignty in the AI Era

States are reshaping the global digital economy to assert control over the artificial intelligence (AI) value chain. Operating outside multilateral institutions, they pursue measures such as export controls on advanced semiconductors, infrastructure partnerships, and bans on foreign digital platforms. This digital disintegration reflects an elite-centered response to the infrastructural power that private firms wield over critical AI inputs. A handful of companies operate beyond the reach of domestic regulation and multilateral oversight, controlling access to technologies that create vulnerabilities existing institutions struggle to contain. As a result, states have asserted strategic digital sovereignty: the exercise of authority over core digital infrastructure, often through selective alliances with firms and other governments. The outcome is an emergent form of AI governance in techno-blocs: coalitions that coordinate control over key inputs while excluding others. These arrangements challenge the liberal international order by replacing multilateral cooperation with strategic—and often illiberal—alignment within competing blocs.