China’s Metaverse Advantages: How the West Could Lose its Digital Supremacy

When Facebook bought Oculus in 2014 for over a billion dollars, it was an investment ahead of its time. For years virtual reality remained an interesting novelty and little more.However, as investment in AI has skyrocketed in the last eight years, web 3.0 has similarly become a behemoth of funding. Silicon Valley hardly looks the same as it did a decade ago: Facebook completed its rebrand to Meta, and Apple, Alphabet and Microsoft each have their own virtual reality platforms and business goals. Virtual worlds are back on the radar in a big way. VR will be about more than gaming, and will likely become an integral part of our daily lives. McKinsey estimates that VR worlds could generate $5 trillion in economic activity by 2030. The virtual world will not only be where we live and work it will be where social, economic, and military power is exercised. In this article, we’ll explore China’s power advantages — and the West’s potential responses to this power.


In the following sections:

1 – Virtual Worlds as a New Theater of War: The increasing importance of virtual worlds and communication channels as a means of covert and overt influence.

2 – China’s Metaverse Advantages: Distinct advantages that China’s authoritarian regime has in wielding influence in virtual worlds, and how our open systems remain vulnerable to that influence.

3 – Evaluating “Western Values” in a Virtual World: A frank assessment of how our Western values may need to be manifested in new ways in order to prevent exploitable weaknesses.

4 – Policy Considerations, The West Looking Forward: What the West should consider as next steps as China’s metaverse advantages mount, and as the virtual world becomes predominant. Throughout this article, I’ll be drawing directly from quotes from leaders in business, policy, and defense – some of which have been pulled directly from recent interviews on The AI in Business Podcast.1 – Virtual Worlds as a New Theater of WarFifteen years ago, most economic “value” was found in the physical world. Today, value is changing with where we spend our time — and increasingly starting in earlier stages of life. According to a 2020 study conducted by Dr. Michael B. Robb of the nonprofit Common Sense Media: Children and young adults aged 8-18 spend 9 hours per day in front of screens, an increase of 1.5 hours on average from studies taken in 2010. The same 2020 study found that, from birth to eight years old, children spend an average of 2.28 hours per day in front of screens. The shift into the virtual world is simply an extension of our current transition into the digital world.

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