As national security increasingly hinges on advanced technologies, governments face the complex task of securing these capabilities while fostering innovation within the private sector. This challenge is particularly acute for liberal democracies such as Japan, where critical technologies are developed not only by state entities but also by private companies and academic institutions.

Technologies with dual-use potential—applicable in both civilian and military contexts—have become pivotal in establishing strategic advantage. Yet, securing these technologies demands more than just state control or ownership; it requires effective governance mechanisms that can coordinate fragmented domestic capacities without stifling innovation.

The concept of technology sovereignty encapsulates this dilemma. Unlike traditional notions of state sovereignty, which primarily concern legal authority and interstate relations, technology sovereignty centers on whether a country possesses the capacity to secure and govern key technological assets. It involves balancing external autonomy—reducing reliance on foreign suppliers for strategically important technologies—with internal governance, ensuring effective oversight and integration of domestic technological developments.

Complete technological self-sufficiency, or autarky, is widely considered unfeasible in today’s interconnected world. Instead, states must determine the appropriate degree of autonomy necessary to safeguard national security interests. This balance is complicated by the fact that dependency on foreign technologies exists not only with potential adversaries but also among allied nations. For example, some European institutions aim to reduce dependence on American companies like Palantir, a data analytics firm involved in defense applications, highlighting that technological dependence can be a concern even within alliances.

Japan exemplifies these tensions as it seeks to incorporate artificial intelligence (AI) into its defense capabilities. Tokyo’s goal is not to achieve complete independence from foreign technology but to maintain sufficient control over sensitive data and critical systems while promoting domestic alternatives.

However, possessing strategically valuable technology within national borders does not guarantee governmental control over its use. Private-sector actors, including startups and universities, hold significant influence over the development and deployment of key technologies. Governments thus employ a range of tools—export controls, information security mandates, public research financing, and subsidies—to align private innovation with national security objectives.

Yet, heavy-handed regulation carries risks. Excessive constraints might isolate researchers from international networks, increase compliance burdens, and dampen innovation, ultimately weakening the technological foundations essential for security.

A recent dispute involving the U.S. government and AI company Anthropic underscores these challenges. After protracted negotiations over the use of Anthropic’s Claude AI models, the U.S. Department of Defense designated the company a supply-chain risk. Anthropic opposed certain applications of its technology, including mass surveillance and fully autonomous weapons, and challenged the designation in court. This case highlights the core issue underpinning technology sovereignty: the tension between government demands for access to critical technologies and private firms’ efforts to set ethical and operational limits on their use.

In contrast, the U.S. Defense Department has forged agreements with multiple technology firms—including Amazon Web Services, Google, Microsoft, NVIDIA, OpenAI, Oracle, SpaceX, and Reflection—to deploy AI capabilities on classified networks. These partnerships aim to diversify suppliers and mitigate reliance on any single provider, though private companies may still impose usage constraints that complicate national security objectives.

Japan faces a particularly delicate balancing act. Unlike authoritarian systems such as China, where governments wield extensive control over private technology sectors, liberal democracies must rely on voluntary cooperation and align incentives without compromising individual freedoms or disrupting innovation ecosystems.

To this end, Japan is developing institutional frameworks aimed at strengthening its technological base to support national security. Success depends not only on government policies but also on private companies and research institutions appreciating the broader implications of their technologies for national interests and ethical considerations.

Ultimately, the quest for technology sovereignty is a governance challenge: how to harness and mobilize critical technological capabilities needed for security while preserving the openness, autonomy, and innovation that characterize democratic societies. Achieving this balance remains a central priority for Japan and other liberal democracies navigating an increasingly complex global technological landscape.