Banner: China’s President Xi Jinping walks on before his speech during the opening ceremony of the Forum on China-Africa Cooperation in Beijing, September 3, 2018. (Source: Madoka Ikegami/pool via Reuters)

Half the world remains without reliable, affordable internet—an untapped economic and strategic opportunity that will shape global power for the next century. China understands this. Through its Digital Silk Road Initiative, Beijing is investing billions in global internet infrastructure, securing a dominant position in the digital economy and advancing its strategic interests at the expense of the United States.

In his first month in office, President Trump signaled the need for an America First Investment Policy that focuses on curbing China’s influence, leveraging allied investments, and prioritizing US economic and national security. Similarly, Executive Order 14196 has authorized the study of a new sovereign wealth fund to “establish economic security for future generations, and promote United States economic and strategic leadership internationally.” The US Development Finance Corporation (DFC), which was created under first Trump administration in 2018, already has many of the tools that would be needed to counter China’s growing dominance of critical internet infrastructure.

However, structural reforms and a shift in priorities are required in order for DFC to be able to work with allies to build the pragmatic, catalytic, return-generating blended finance vehicle needed to connect the unconnected. The Trump administration’s policies emphasize US economic security as national security, arguing that foreign investment must benefit American businesses and workers. Financing the global expansion of internet connectivity aligns with America First economic principles by opening new markets for US businesses, generating revenue for American investors, and ensuring that American technological leadership—not China’s—shapes the future digital economy. Connecting the unconnected offers at least four massive financial opportunities for the US government, US businesses and investors, and allied governments and investors, including:

However, beyond the dollars, there is a significant strategic upside to dominating the buildout of internet infrastructure abroad. China’s government gets this, which is why they’ve made investments in internet infrastructure the signature part of their Digital Silk Road Initiative. To put the PRC’s investment into building internet infrastructure into context, on the African continent, China spends more money in this area than all African nations, G7 nations, and multilateral agencies combined. While the priorities of the Digital Silk Road Initiative have shifted over time, connectivity infrastructure is the one area that has seen consistent growth, with China Development Bank providing billions in financing to Chinese owned, backed, or affiliated companies to build the internet abroad. As a result, most new internet users will take their first online steps into a Chinese-controlled digital landscape. At each step in their digital journey — from the fiber they use to connect, to the network equipment that carries their data, and the mobile phones they use — their data will be collected by Chinese-owned or backed enterprises that feed directly into China’s military civil fusion programs, in service of providing China the technological advantage it is developing over the United States.

China’s control over global digital infrastructure poses a direct threat to US military operations and intelligence. In a conflict scenario, Beijing could leverage these structures to gain valuable intelligence on everything from ship movements to allied communications. In addition to surveillance, the PRC could shut down access communications, greatly impacting US ability to maneuver in the event of a conflict. In addition, China is also seeking to leverage its control over ICT infrastructure to gain access to critical data assets necessary to fuel its AI ambitions. Indeed, the PRC is already leveraging its control over digital infrastructure to conduct surveillance, gather sensitive data for use in influence operations against American interests, and exert pressure on governments to adopt policies that cater to Beijing’s will. In short, investing in secure, American-backed digital infrastructure isn’t just an economic issue—it is a national security imperative.

However, whereas China sees control over critical internet infrastructure as essential to its strategy for competing with the US, America and its allies are neglecting one of the most consequential fronts in the war for who will control the digital economy. Despite growing evidence of the centrality of investing in connectivity to China’s competitive strategy, so far, the US – and the West more broadly – has adopted a fragmented approach in response. The current state of the debate has focused largely on communicating potential security risks of relying on Chinese-financed, state-linked telecommunications technologies, such as 5G technologies provided by Chinese firms Huawei and ZTE, and efforts to promote open-source alternatives like Open RAN. While both of these lines of effort may be worthwhile, they do not provide a scalable, credible alternative for the vast majority of China’s telecommunications customers in the Global South – who are the targets of China’s investment efforts and key to China’s broader strategy for technological dominance. Ultimately, more than 50% of all network equipment in the world is made by Chinese companies.

As with much of China’s competitive strategy, its approach to investing in global connectivity is inherently state-led and finance-first. By providing financing for connectivity infrastructure projects, the PRC is able to exert substantial influence over what firms build the networks, the technologies they use, the selection of network operators, and are also able to shape the policy environment (e.g,. transferring ownership of critical infrastructure to the PRC in the case of loan defaults) all to suit their strategic interests at every step.

In contrast, existing US efforts are both under-resourced and perpetuating a status quo of investing in large telecoms which lack the incentives and capabilities to reach those who lack reliable, affordable access to the internet. The Development Finance Corporation (DFC), the US equivalent to the China Development Bank which was created during the first Trump Administration through the BUILD Act, reportedly has only three loan officers with expertise in ICT. While DFC can write nine figure checks to finance data centers across the African continent or the building of international submarine fiber optic cables, it lacks playbook, pipeline, partners, expertise, and vehicles to finance last mile connectivity in the areas where China has most focused its ICT investment strategy. In addition, the DFC has traditionally avoided offering concessionary capital, which is a powerful tool to attract private capital to invest in DFC-led deals. Meanwhile, USAID’s anemic signature attempt to catalyze blended finance investment in connectivity, Digital Invest, which provided just $500,000 in grant funding for capital providers who bring at least $500,000 of matching capital, is likely a thing of the past. Should China be allowed to continue unchallenged, US influence and power will be diminished, and the overseer of the world’s most heavily surveilled internet space will be able to harness the data from billions of the world’s people in pursuit of its efforts to gain a strategic technological advantage over the United States.

This does not mean that the United States should respond to China in-kind. While China relies on a massive state-led industrial policy, there are existing mechanisms that the US and allied nations already have in place that can be leveraged to gain back lost momentum and change the calculus for developing nations who often see Chinese financing as the only option for connecting their populations. More specifically, the US, potentially alongside other aligned actors, should leverage blended finance. In this model of investment, the US would provide concessionary capital with the explicit goal of catalyzing additional investment from the private sector and philanthropic organizations who would provide most of the capital. Blended finance not only brings far more resources to this capital-intensive challenge than any government – whether the US or PRC – could likely accomplish alone, but also helps to keep rates affordable for both ISPs and the communities that they serve while still enabling all investors to meet their return expectations.

This is not an untested concept. For example, in the recently launched SDG Loan Fund, the Dutch Development Bank FMO (Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.) (FMO) and the John D. and Catherine T. MacArthur Foundation (MacArthur Foundation) as part of the Catalytic Capital Consortium (C3) initiative, were able to catalyze $1 billion in capital from Allianz and other institutional investors. This fund offers investors multiple levels of risk protection, including FMO providing a $111 million first-loss investment which was further credit enhanced by a $25 million unfunded philanthropic guarantee provided by the MacArthur Foundation. This example shows how when governments provide concessionary capital (e.g., at below-market rates of return and/or by taking a subordinate or first loss position in the capital stack), this changes the risk-return profile of private sector investors making it easier to attract market rate capital.

DFC must be reauthorized this year, which provides an ideal opportunity to prepare the agency to finance a historic wave of transactions to connect the unconnected, bringing massive economic, strategic, and national security benefits to the US and its allies. DFC must be modernized to operate at the speed of China’s investment model. This includes removing bureaucratic delays, increasing investment caps, and allowing reinvestment of profits—all of which align with the White House’s America First Investment Policy, which calls for streamlining approvals for strategic investments that benefit US national security and economic interests. What follows are a series of initial recommendations on how to make DFC fit for this purpose.

With these reforms in hand, the US will be well-positioned to lead a credible alternative to Chinese financing and seize this historic economic and strategic opportunity. By leading global investment in digital connectivity, the US will not only counter China’s strategic influence but also unlock new markets for American telecom firms, cloud service providers, and technology innovators—creating high-paying jobs and reinforcing US economic leadership in the industries of the future. While the potential profits are substantial, the US Government need not do this alone. By bringing together capital partners with different risk-returns profiles and solving for specific credit risks, blended finance offers a pathway to leverage concessionary government contributions to catalyze substantial private sector investment, in ways that are both impactful and profitable for governments and other capital partners.

Especially when you consider the combined profits from the contracts for building the infrastructure, the returns from providing financing for those construction efforts, profits from providing internet service, and creating new potential customers for US businesses, financing the end of the digital divide could be the deal of the century. America cannot afford to cede control of the digital future to Beijing. By leading global investment in internet infrastructure, the US will secure its economic leadership, protect its national security, and expand opportunities for American businesses. This is the deal of the century—if we seize it.

Jochai Ben-Avie and Kenton Thibaut, “Connecting the other half of humanity is the deal of the century,” Digital Forensic Research Lab (DFRLab), March 17, 2025,