Funding Tech for the Many, Not the Few

How Public and Cooperative Capital Can Build the Technology We Need

The United States has never lacked for technological imagination. From the creation of the internet to the mapping of the human genome, public investment has been the force behind many of the breakthroughs that now define our economy. As economist Mariana Mazzucato has shown, the state has often acted not just as a fixer of market failures, but as the first mover—funding risky, long-horizon innovations that private capital wouldn’t touch.

But time and again, the financial rewards from those public investments have flowed in only one direction: toward private capital.

The internet itself was developed with billions in public research through DARPA and the National Science Foundation, yet today we pay monopolistic telecoms and rent-seeking platforms to access the digital infrastructure we already paid to build. The Human Genome Project cost U.S. taxpayers over $3 billion, but its breakthroughs were quickly privatized by biotech firms that locked up key tools behind paywalls and patents. Google’s original search algorithm was funded by a National Science Foundation grant. Tesla’s critical early years were underwritten by a $465 million Department of Energy loan. The U.S. government invested at least $31.9 billion— decades of foundational research, clinical development, manufacturing, and direct purchases—to make mRNA COVID-19 vaccines possible. Moderna alone received nearly $2.5 billion in direct public support, while building on NIH-co-invented mRNA science. Yet the company later quadrupled its vaccine price and declined to share patents, profits, or licensing rights with the public institutions that made its success possible—despite the potential of this technology to save millions more lives in future pandemics and beyond.

Venture capital (VC) and private equity (PE) have perfected a flywheel: a self-reinforcing machine that turns money into ownership, ownership into political power, and power into more money. Public institutions, by contrast, rarely keep a seat at the table once the innovation is proven. They fund the early risk, but when it comes time to scale, the work is sold, licensed, or spun out into private hands. The public takes the risk. The private sector takes the reward.

No company has embodied this strategy more fully than Amazon. It engineered it into the core circuitry of its empire. Amazon reinvested nearly all of its early profits into warehousing, logistics, infrastructure, and data capacity. This allowed it to offer low prices and fast delivery, out-competing rivals not just on convenience, but on sheer infrastructural scale. It then extended that model into cloud computing, building Amazon Web Services (AWS)—now the dominant cloud platform—on top of internal infrastructure, and turning that control into pricing leverage over the very startups and competitors it hosted.

Amazon’s flywheel wasn’t just financial. It was infrastructural and extractive. By controlling logistics, data centers, retail interfaces, and labor conditions, Amazon created a system where each layer reinforced the next—and where competitors found themselves trapped within an ecosystem they couldn’t escape. The more Amazon grew, the more power it accumulated over markets, labor, and even public policy.

And Amazon wasn’t alone. This model helped elevate a new class of billionaire–executives—Jeff Bezos, Elon Musk, Mark Zuckerberg, Peter Thiel—whose fortunes were built atop publicly seeded technologies but who now wield private sovereign power. They shape global labor markets, influence national elections, control satellite networks, manage internet infrastructure, and direct AI research at planetary scale. They answer to no electorate, no regulatory framework, and no democratic process.

Ironically, these titans of the “free market” operate more like central planners than capitalists. Amazon, Meta, and Google are not marketplaces—they are private command economies. They set prices, direct logistics, coordinate production, and manage labor at a scale that rivals state apparatuses. Their vast infrastructure is governed not by competitive dynamics, but by internal software systems, algorithmic control, and top-down directives. They have achieved what 20th-century governments only dreamed of: seamless, real-time coordination of information, goods, and labor across billions of users and millions of suppliers. But unlike public institutions, their planning capacity is used not to meet collective needs, but to extract value—enriching shareholders and concentrating control.

This is the power of the flywheel: each success makes the next one easier. But right now, it’s spinning in the wrong direction—concentrating wealth, eroding democracy, and enclosing the very technologies that were created with public resources.

If we want AI, cloud computing, broadband, and the rest of our digital foundation to serve the many rather than the few, we need to build our own flywheel—actually, we need two: one public, one cooperative. These funding engines, rooted in the principles of democratic ownership and reinvestment, can ensure that the next generation of infrastructure is not just publicly funded—but publicly owned, governed, and scaled.

The Public Funding Flywheel

To build a democratic digital economy, we must reclaim a simple truth: the state is not just a funder of innovation but a builder of it. As Mariana Mazzucato has shown, the public sector has long shouldered the highest-risk, longest-horizon bets in modern economic history—from aerospace to clean energy to biotechnology. What’s been missing is not ingenuity, but a way to retain the value those investments create.

Rather than handing off the most strategic breakthroughs to the private sector, the public can act as a long-term investor and partial owner—financing the scale-up of critical technologies and recycling the returns into future rounds of innovation. This is the heart of the public funding flywheel: a self-sustaining engine where public capital builds infrastructure, infrastructure generates revenue, and that revenue finances the next generation of public investment.

This concept is vividly illustrated in the television series For All Mankind, where NASA evolves into a self-funding agency. In an alternate history, the U.S. government allows NASA to retain and reinvest profits from its operations and license its technology. The revenue cycle not only finances further space missions but transforms NASA into a powerful, mission-driven institution capable of competing with privatized space ventures. While fictional, it offers a compelling blueprint: public ownership paired with reinvested returns can generate enduring capacity.

In the real world, one partial analog is the success of Norway’s Government Pension Fund Global. Financed by oil revenues, the fund was designed not just to hold capital, but to grow it over time in service of public welfare. Though its investments are primarily financial, the model demonstrates how publicly generated wealth can be institutionally recycled for long-term benefit—and how public entities can act as savvy stewards of capital.

Instead of relying on one-off appropriations, this flywheel can be fueled by enduring funding streams: a slice of spectrum auction proceeds, equity retention clauses in federal tech procurement contracts, redirected pension fund allocations, technology bonds, or windfall taxes on monopoly profits. These resources would flow into independent public investment authorities, guided by clear public-interest mandates, insulated from short-term political pressures, and governed with transparency and accountability.

The targets of investment are clear: general-purpose infrastructure that underpins the digital economy. National-scale AI compute clusters. Public broadband fiber. Semiconductor fabs with public equity stakes. Open-source cloud platforms. These are the railroads, power grids, and water systems of the 21st century. Building and owning them publicly ensures not just efficiency, but democratic control.

As these assets generate service fees, licensing revenue, and equity returns, those funds flow back into the public tech fund, which reinvests in new infrastructure. Over time, this compounds—mirroring the growth dynamics of private venture capital, but with the gains accruing to the public as a whole.

Crucially, this model does not require heroics each budget cycle. Once seeded, the flywheel can operate with institutional momentum, delivering long-term capacity with short-term accountability. As Carlota Perez has argued, every technological revolution needs a "Golden Age" of broad deployment. But such an age doesn’t arrive by accident. It must be built—and financed—on purpose.

To succeed, governance matters. Public investment must be shielded from capture, mismanagement, and short-termism. That means professionally managed funds with citizen oversight, open audits, anti-corruption safeguards, and democratic transparency.

Done right, the public funding flywheel can anchor a new era of mission-driven innovation. It can ensure that the rewards of public ingenuity flow not to monopolies, but to the people who made them possible. And it can give us the financial architecture to match our technological ambitions—not just once, but again and again.

The Cooperative Funding Flywheel

Running parallel to the public model, the cooperative funding flywheel offers a democratic, decentralized path to building and owning technology. While the state aggregates capital through taxation and public investment, cooperatives empower members—workers, users, and communities—to pool their own resources, govern collectively, and reinvest in enterprises that meet shared needs. This approach rejects the logic of speculative exits and external shareholders. Instead, it roots capital in participation, long-term benefit, and values-aligned stewardship.

Cooperative capital can come from many sources: worker-owners pooling savings, communities seeking digital sovereignty, anchor institutions such as universities and hospitals seeking stable, ethical service providers. These sources reflect the ethos of platform cooperativism, as advanced by thinkers like Trebor Scholz and Nathan Schneider: applying cooperative ownership and governance to digital infrastructure, data-driven services, and the platforms that increasingly mediate daily life.

This model is already visible across the technology landscape. Cooperatives operate movement-rooted digital infrastructure: for example, May First Movement Technology—a nonprofit, democratically governed cooperative—provides shared hosting, email, file-sharing (Nextcloud), and web services on infrastructure collectively owned by its activist members. Similarly, Webarchitects offers managed hosting under cooperative governance. Other examples include community broadband networks like RS Fiber and People’s Choice, federated platforms like Mastodon, ride-hailing cooperatives such as the The Drivers Cooperative, and emerging models for worker-owned AI/data-labeling collectives. These initiatives often emerge where traditional platforms exploit labor, neglect communities, or prioritize surveillance and profit over community, trust, and service.

The flywheel dynamic emerges through reinvestment and replication. Members invest to start or grow a cooperative; the enterprise generates revenue through platform fees, subscriptions, or infrastructure access; surplus is split between dividends to members and reinvestment into the enterprise or broader ecosystem. Over time, mature co-ops begin to seed new ones—offering mentorship, technical assistance, shared infrastructure, or cooperative capital. Organizations like Start.coop, Seed Commons, and The Working World already embody this cycle, operating cooperative loan funds and accelerators that mirror the support functions of venture capital—without the extraction.

To scale, the cooperative ecosystem needs more than idealism. It requires access to patient, non-extractive capital; open-source tools and federated identity systems that reduce duplication; legal frameworks that recognize and support cooperative governance; and cultural visibility that presents cooperation not as niche, but as a serious and strategic path for founders and funders alike. If the public flywheel builds fiscal capacity, the cooperative flywheel builds civic capacity—the ability of people to organize, govern, and sustain the digital systems they depend on.

The Moment of Choice

We are standing at a pivotal threshold. Artificial intelligence, cloud infrastructure, spatial computing, bioengineering, and other emerging technologies are still in their formative stages—technically, commercially, and politically. Standards are not yet fully set. Markets are not yet fully captured. Governance regimes are still fluid. This is the window in which foundational decisions are made, not just about how these technologies work, but who they work for.

But the clock is ticking.

Once private capital locks up the infrastructure—through exclusive data access, proprietary algorithms, intellectual property fences, and hyperscale compute monopolies—the combination of network effects, capital intensity, and vertical integration will make it nearly impossible to dislodge them. We've already seen how this plays out with social media, cloud computing, app stores, and broadband: early public support or open access gradually collapses into corporate chokepoints, extractive pricing, and winner-take-all market structures.

AI is already trending this way. The training of frontier models is dominated by just a few firms. The GPUs are cornered. The model weights are closed. The APIs are rented. Even open-source initiatives risk becoming dependent on infrastructure layers controlled by Big Tech. If we don’t intervene now—with public investment and cooperative ownership—the rules will be written for us, by others, in terms that cannot be easily unwound.

This is a narrow but decisive window: a moment to seed the public and cooperative flywheels before the gates close.

And the choice we face is not a caricature between state-run bureaucracy and corporate monopoly. It is something more fundamental: do we want the foundational tools of the 21st century—AI, broadband, cloud, chips, and digital services—to be owned and governed by the few, or by the many?

• Do we want infrastructure that reinforces monopoly and surveillance—or infrastructure that empowers creativity, community, and care?

• Do we want a digital economy optimized for quarterly earnings and speculative exits—or one grounded in resilience, equity, and democratic participation?

The two-flywheel strategy gives us a path forward. Public capital can build and sustain the core layers of our digital future—ensuring accessibility, openness, and durability. Cooperative capital can animate those layers with services and applications that are responsive to the people who use and depend on them. Together, these flywheels compound not just capital, but capacity: the ability to shape our technological destiny from the ground up.

The VC and PE ecosystems have already demonstrated what happens when you design institutions for compounding returns. The problem is not the flywheel—it’s the direction it spins. We need to reclaim that logic, retool it for public and democratic purposes, and build a parallel innovation economy—one that doesn't treat extraction as success and exclusion as innovation.

This moment won’t last. The power dynamics of the next fifty years are being shaped right now. We can choose to be passive observers—outsourcing our future to monopolies—or we can build the institutions, infrastructure, and ownership structures that ensure a digital economy by and for the people.

The flywheels are ready. The choice is ours.

---

CommonBytes

This column explores a central question: What should technology’s role be in a world beyond capitalism? Today’s technological landscape is largely shaped by profit, commodification, and control—often undermining community, creativity, and personal autonomy. CommonBytes critiques these trends while imagining alternative futures where technology serves collective flourishing. Here, we envision technology as a communal asset—one that prioritizes democratic participation, cooperative ownership, and sustainable innovation. Our goal? To foster human dignity, authentic connections, and equitable systems that empower communities to build a more fulfilling future.