When Innovation Becomes Infrastructure

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Public systems are under strain. Federal IT infrastructure, built decades ago, struggles with modern demands while budgets tighten and expertise migrates to higher-paying private employers. Into this gap, private technology firms have stepped with solutions that work. Today, SpaceX satellites relay communications for federal facilities, Amazon

Web Services stores classified intelligence data, and Microsoft cloud platforms run core government operations. What was once supplementary has become essential. The line between public infrastructure and private innovation has quietly dissolved.

In August, Amazon Web Services agreed to provide federal agencies with up to one billion dollars in cloud services savings through 2028, consolidating data storage and modernization efforts across government departments. The following month, Microsoft offered similar terms, with potential savings exceeding six billion dollars over three years for services including Azure cloud infrastructure and cybersecurity tools.

The transformation is most visible in communications and data management. Starlink, SpaceX's satellite internet service, began testing terminals at Federal Aviation Administration facilities in 2025 to modernize air traffic control systems. In September, SpaceX completed a seventeen billion dollar acquisition of wireless spectrum from EchoStar, expanding its direct-to-cell network capacity more than one hundredfold and positioning the company to eliminate mobile dead zones across the United States. The federal government is simultaneously exploring how Starlink might improve connectivity in Alaska, where weather disrupts aviation communications.​

Cloud computing has become equally critical. Amazon launched its second Secret Cloud Region in 2025, providing defense and intelligence agencies with infrastructure to support classified workloads up to the Secret level. Microsoft's Azure Government platforms similarly host sensitive federal data, with both companies offering specialized sovereign cloud environments designed to meet stringent security and compliance requirements.​

These private networks now underpin government functions that were historically managed internally. The expertise required to maintain these systems resides primarily in private companies, not civil service.

This consolidation creates systemic vulnerabilities. When critical infrastructure operates under private control, accountability becomes ambiguous. Government agencies can set contractual terms, but they cannot dictate internal company priorities or engineering decisions. During crises, the question of who directs resources and how quickly they respond depends on private executives, not elected officials.

Data sovereignty presents additional concerns. Even with contractual protections, sensitive government information now resides on infrastructure owned and operated by private entities. As of 2025, Amazon reported no disclosures of enterprise or government content stored outside the United States to the US government since tracking began in 2020, but the technical capability to access such data remains.​

Resilience in crisis is perhaps the greatest unknown. Private companies optimize for efficiency and profitability, not redundancy at government scale. During natural disasters, cyberattacks, or geopolitical conflicts, the continuity of essential services depends on corporate decisions about resource allocation, backup systems, and operational priorities. Unlike publicly managed infrastructure, where oversight is direct and accountability is clear, private providers operate with less transparency.

Conflicts of interest compound these challenges. When company executives hold government advisory roles while their firms compete for federal contracts, the boundary between policy influence and business advantage blurs. Public trust depends on visible separation between commercial interests and public decision-making.

Innovation has delivered undeniable benefits. Cloud computing offers flexibility and cost savings that rigid government IT systems cannot match. Satellite networks expand connectivity to underserved regions faster than terrestrial infrastructure could.

Yet resilience requires more than capability. It requires oversight mechanisms that ensure private infrastructure serves public interests, particularly when continuity matters most. Governments must establish clear authority over critical systems, maintain backup capabilities, and enforce transparency requirements that preserve accountability. Contracts should mandate resilience standards, independent audits, and guaranteed government access during emergencies.

The era of purely public infrastructure has passed. The question now is whether public oversight can keep pace with private power. Progress depends on innovation, but survival depends on control.

Deniss Slinkins,
Global Financial Journal