Should A Changing World Order Affect Our Investment Strategy?
The American Tailwind is no longer a simple, predictable force. Today, as we peer into the news articles of 2026, we see a world where strategic autonomy has replaced comparative advantage as the governing principle of global trade.
If you want to understand why we can no longer ignore politics when investing in U.S. giants, you needn’t look further than the struggles of our great technology and financial cathedrals as they try to keep their doors open in Europe and beyond.
I. The "Sovereign Cloud" and the Amazon Conundrum
Consider Amazon. For years, AWS was the gold standard, a utility so efficient and scale-advantaged that it seemed untouchable. But in the current political climate, efficiency is being sacrificed at the altar of sovereignty.
In 2025 and 2026, we’ve watched Amazon perform a fascinating, expensive dance to convince the European Union that its data centers are European enough. The EU, wary of U.S. laws like the CLOUD Act, which theoretically allows the U.S. government to subpoena data held by U.S. companies anywhere in the world, has effectively told Amazon: "We love your tech, but we don't trust your passport."
To stay in the game, Amazon had to launch the AWS European Sovereign Cloud. Look at the concessions they’ve made:
1) Physical Isolation: Entirely separate infrastructure from the U.S. regions.
2) Personnel Restrictions: Operated and supported exclusively by EU residents located in the EU.
3) Governance: A separate legal entity to buffer against U.S. judicial reach.
When you have to build a separate factory for every country just to prove you aren't a spy, it reduces your scale advantage. It’s a massive duplication of capital that would make a rational businessman wince. For the investor, this is a political tax on earnings. If Amazon has to build bespoke, sovereign silos for every major trading bloc, the margins of the cloud business will inevitably feel the squeeze.
II. The Revolt Against the Card Giants: Visa and Mastercard
This sovereignty movement isn't limited to data; it’s hit the very plumbing of global commerce. For decades, Visa and Mastercard (V/MA) enjoyed a duopoly that has benefited them immensely. They are the toll booths on the global highway.
But the politicisation of the U.S. dollar, specifically the use of financial sanctions as a primary tool of American foreign policy, has sent a chill through Brussels. The EU realised that if they are 95% dependent on two American companies for their daily bread and coffee transactions, they aren't truly a sovereign power.
In response, we are seeing the aggressive rise of the European Payments Initiative (EPI) and its digital wallet, Wero. Launched in late 2024 and gaining massive steam through 2026, Wero is the EU’s attempt to build its own "toll booth" and kill its reliance on V and Ma. We see major European banks like Deutsche Bank and BNP Paribas urgently migrating customers to these sovereign rails. Whilst Guanrui and I believe that the impacts are likely to be minimal on V/Ma’s business, it is undeniable that regulation support of wero will provide a headwind for V/Ma.
III. The AI Export Trap
The U.S. currently leads the world in AI models and hardware. Naturally, the current administration wants to use this lead as a geopolitical lever. However, given the current political climate, I highly doubt that countries in the EU are willing to embrace American AI as willingly as they did from embracing US tech. We can clearly see the pushback of the EU on big tech companies and the increases polarisation and tension between the EU and Trump further threatens the ability of US AI to diffuse internationally .
By tying AI adoption to U.S. political alignment, we are inadvertently encouraging the rest of the world to build Anything But American (ABA) AI stacks which will be detrimental to the Big tech companies should their 2nd largest market refuse to adopt their new AI tech stack for fear of being held hostage in the future due to their dependency as they are being held hostage now.
If a country in the Global South or even a close ally in Europe fears that their AI "brain" could be switched off by a U.S. export ban during a trade dispute, they will choose a slower, domestic alternative or a Chinese one.
By politicizing AI standards, the U.S. is fragmenting the global market. In business, you want your product to be like air, something everyone needs and no one thinks about where it comes from. The moment you make your product a political statement, you've given your competitors the best sales pitch they’ve ever had.
The U.S. is currently using its corporate champions as the front-line soldiers in a global geopolitical struggle. While this might be good for national security, it is poison for the shareholders.
When Amazon has to allocate extra resources for the EU and when Visa sees its rails being dug up by European bureaucrats, the intrinsic value of these businesses must be discounted. The American Tailwind is still there, but it’s now blowing through a series of political toll gates that didn't exist ten years ago.
We still love great businesses. But we love them even more when they don't require a diplomatic mission to access to European market. In an increasingly polarised world, we have to take into account the political risk in our evaluations instead of turning a blind eye and discounting them. The intersection of politics and the boardroom is the new high-wire act of the markets. Our advice remains the same: Look for the companies that can survive even if a moron (or a particularly misguided politician aka Trump) is running the country. At current valuations it might be wise to diversify and invest in other high quality companies across the globe or invest in companies that will benefit from this de globalisation, nationalistic trend.
Feel free to look at the writeup of Moutai as a potential candidate for a high quality business outside the US trading at a decent valuation.