The largest companies in the World are run by the Government
Most people never ask: “What role does this ticker play for the regime, for which factions, and on what horizon?”
I’ve already covered:
In this article I’ll explore state-embedded companies in a way similar to how the top 1% of hedge funds view them.
1. What is a “state-embedded company”
A state-embedded company is:
A nominally private corporation whose primary function is to extend, operationalize, or protect the Controllers’ power, and whose survival & growth are more dependent on regime utility than on “market competition”.
In other words:
It’s plugged into control rails (data, identity, payments, war, infrastructure, modeling).
It gets policy tailwinds: contracts, standards, index weight, legal shielding.
It’s designed to look like “just a company” for plausible deniability.
Think of them as:
Organs of the meta-state,
Wrapped in equity tickers so that:
They can raise capital without budget fights.
They can be explained to the public as “entrepreneurs” not “instruments”.
2. Why use companies at all if you control states?
The Controllers could just use ministries. Why companies?
2.1 Plausible deniability & narrative
“We bought this because Microsoft/Palantir/Lockheed had the best tech.”
“The market chose them.”
“Innovation from the private sector.”
This lets the Controllers:
Deny central planning while doing central planning.
Push blame:
If it works → “visionary entrepreneurs”.
If it fails → “corporate greed, not us”.
2.2 Budget & balance sheet arbitrage
Companies raise equity & debt from global markets.
The Controllers get:
CapEx in cloud, surveillance, AI, weapons, grid
without:putting every dollar through parliamentary fights
explicit taxes
So state power is scaled with other people’s risk capital.
2.3 Talent magnet & compartmentalization
Top engineers prefer high-stock-comp, prestige companies over “Ministry of Interior”.
Companies let you:
cluster top talent behind NDAs,
silo them in projects that are officially “commercial”,
swap personnel between “private” and “government” with less public scrutiny.
2.4 Global reach and treaty evasion
A “US company” can sell into Europe, Asia, etc., where a US ministry cannot.
Same Controllers, different costume → less suspicion.
Export-control theater is used to shape markets, not fully block them.
2.5 Insurance & sacrificial function
Companies can be:
Sacrificed in scandals,
Broken up, fined, restructured,
Without “the state” formally admitting wrongdoing.
That’s a pressure valve: you can “purge” sin by destroying a wrapper while keeping the function.
3. Core roles state-embedded companies play
Within the crisis priority stack:
FX/funding → collateral/money markets → banks → housing/pensions → control rails → indices → single names
state-embedded companies mostly sit in “control rails” and “consent rails”.
3.1 Control-rail companies
They run the operating systems of control:
ISR (Intelligence, Surveillance, and Reconnaissance) / warfighting / targeting
Defense primes, sensor networks, satellite constellations, missile systems.Decision OS / data fusion / AI
Foundry-like platforms, big cloud/identity stacks, analytic frameworks.Cyber & network control
Deep inspection, zero-trust identity, network policy engines.Financial rails
Payments, messaging (SWIFT-like), stablecoin/CBDC middleware, AML/KYC scoring.Identity & provenance
Digital ID, verifiable credentials, audit and chain-of-custody.
These are the companies that, if you turn them off, governments can’t see or act.
3.2 Consent-rail companies (“stonks must go up”)
They anchor retirement accounts, pensions, and the middle-class wealth illusion:
Index megacaps.
Main national indices (S&P 500, STOXX, Nikkei, etc.).
Local housing proxies, big banks, utilities.
These are the names where volatility must be managed, not because of the company itself, but because of what it represents:
“My savings are safe; the system works.”
The Controllers tolerate some drama, but they don’t want:
total collapse,
prolonged bear markets tied to boomer pensions.
So consent-rails get buybacks, index gravity, Central Bank puts, and are rarely allowed to fail catastrophically.
4. Traits that tell you a company is state-embedded
Concrete, “things to look for”:
4.1 Revenue & customer mix
High share from:
Defense/IC,
critical infrastructure (grid, telco, ports, banks),
healthcare/public health,
justice/policing,
sovereign or central-bank adjacent projects.
Revenue is sticky: long contracts, renewals, multi-year modernization programs.
4.2 Standards & accreditation
Deep involvement in:
security clearances,
FedRAMP / IL-levels / G-Cloud / NATO or equivalent,
national “approved vendor” lists,
committees defining ID, privacy, cyber, finance standards.
You want things like:
“Only a small set of vendors are allowed to touch data at this classification level.”
“This stack is written into the procurement standard.”
That’s hidden moat.
4.3 Legal/regulatory exceptionalism
Exemptions or special regimes:
export controls tweaked for them,
special liability shields,
tolerated mergers others would never get approved,
mild treatment in scandals.
Not “no scandal”, but scandals that end with a fine + more contracts, not existential destruction.
4.4 Index & flow importance
Heavy representation in:
flagship indices,
government retirement schemes,
SWF portfolios,
big ETF shelves.
That embeds them in autopilot flows (target-date funds, 60/40, 401(k)s), making them part of the consent machinery.
4.5 Narrative treatment
Portrayed as:
“national champions”,
“critical to security”,
“strategic AI / cyber / defense leaders”.
And yet rarely framed as:
“existential threats”,
“too dangerous to exist”,
in mainstream outlets — unless it’s controlled theater.
4.6 Competition that never quite bites
You see cool startups talking big,
but notice that:
they rarely displace core control-rail contracts,
they get acquired and disappear,
or they’re allowed to bite in superficial segments, not the kernel.
That pattern tells you:
“Competition is allowed on the edges, but the heart is protected.”
5. Typology of state-embedded companies
Type I — Core Control OS
Decision platforms, warfighting stacks, crisis OS, identity/provenance cores.
They are “meta-companies”: many other firms depend on their data, standards, identity.
Markers:
Used in multi-agency, multi-domain operations.
Cross-alliance usage (NATO, Five Eyes, etc.).
Deep ontology/workflow lock-in.
Type II — Sovereign Primes
Defense/aerospace primes, national cyber primes.
They:
bundle hardware + software + integration,
co-design strategy with the state,
have near-permanent seat at the table.
Type III — Consent Anchors
Big “safe” names that:
dominate indices,
are ubiquitous in retirement portfolios,
sit at the intersection of consumer + infra.
They are the poster children for “economy is fine”.
Type IV — Data Harvesters & Narrative Tools
Social networks, adtech, large media/platform ecosystems.
Main function: capture attention, preferences, networks, and shape the Overton window.
They may look like “consumer tech”, but for the Controllers they’re sensor arrays and narrative amplifiers.
Type V — Testbeds & Sacrificial Lambs
Companies used to:
test new regulatory ideas (sandbox),
explore new tech,
later be thrown under the bus in scandals.
You can often spot them because:
they’re loud,
messy,
tied to political experiments,
and then suddenly face harsh crackdowns that shift norms.
6. Lifecycle of a state-embedded company
A control-rail firm usually goes through:
A → B → C → (sometimes) D
Phase A — Error / Fringe
“Weird” company doing something only spooks/nerds care about.
Under-owned, misunderstood, mocked.
For the Controllers: cheap option. If it fails, no problem. If it works, they can scale it.
Phase B — Myth & Capital Formation
Narrative explodes: “AI”, “defense of democracy”, “securing the future”.
Avatar (Karp, Altman, Musk, Huang…) becomes famous.
Index inclusion, big secondaries, huge hiring.
Here, the Controllers:
get the tool they need,
paid for by outside capital,
and the public gets a hero story line.
Phase C — Utility Rail
The tech is now embedded into:
ministries,
militaries,
regulators,
critical infra.
Company behavior shifts toward:
slower, steadier growth,
lower realized volatility (by design),
more regulation & optics management.
At this point, it behaves more like utility infrastructure than a “startup”.
Phase D — Sacrifice / Reshuffle (optional)
If regime needs scapegoats, or wants to reshuffle rents:
antitrust show,
“nationalization” or golden shares,
forced spin-offs,
management purges.
Important: the function survives. Only wrappers and stake distributions change.
7. How to read a company’s role in the script
Use a simple diagnostic:
7.1 What rail does it touch?
Identity / data fusion / AI decision OS?
Communications / surveillance / ISR?
Payments / stablecoins / CBDC rail?
Grid / compute / logistics?
Narrative and data harvesting (media/platform)?
The more upstream it is in sensing and deciding, the more state-embedded it tends to be.
7.2 Who would panic if it vanished?
No one? → not core.
A group of developers? → minor.
Defense + treasury + regulators + big banks? → core rail.
7.3 Does policy keep tripping over it?
Appears in:
strategic documents,
“public-private partnership” announcements,
cyber or AI strategy papers,
trade/export fights.
That’s a tell: it’s part of the plan, not just an accident.
7.4 How is it treated in crises?
Real crises:
its stock gets supported indirectly (liquidity programs, contract accelerations),
its budget lines get protected or increased.
If multiple crises in a row lead to more money, more scope, and more integration, you’re looking at something state-embedded.
8. Investment implications
NOTE: I think we might be nearing the Great Taking, and we are in a liquidity under-injection phase, so multiples likely compress from here.
The point of the section below is to highlight how top hedge funds think about state-embedded companies.
8.1 What you care about is function, not story
Function questions:
Does this company run part of the control OS?
Is it becoming a standard?
Are multiple factions (security, treasury, regulators, asset managers) dependent on it?
Stories change; function persists.
8.2 Edge lives where role is clear but narrative is taboo
Early Palantir-style cases:
role: decision OS / crisis rail,
usage: defense, IC, health, finance,
but narrative: “controversial, creepy, spyware, fascist tool” or “overhyped analytics vendor”.
Institutional allocators can’t write:
“we are buying the governance substrate of a militarized technocracy”.
They must write: “AI-enabled data platform with growing TAM and strong gov/commercial traction.”
That narrative gap = mispricing.
This gap has already been filled in the Palantir case, mostly due to (1) index inclusion, (2) Karp being given a favorable platform on every news outlet, and trend following (successful institutional investors mostly buy what goes up and sell what goes down, they don’t do Warren Buffett-style value investing).
Michael Howell highlights that the real cycle is Debt/Liquidity, not Debt/GDP.
The Controllers repeatedly:
over-inject liquidity after crises (QE, ZIRP),
then under-inject to restore “discipline”,
then patch when something snaps.
This generates long, directional, policy-driven trends in:
interest rates,
FX,
commodities,
credit,
equity indices.
Trend following is basically a mechanical way to front-run the integrity of those policy vectors without needing to understand them.
This is a bit of a tangent, but mainstream media hates trend following. They’d much rather you value-invest and get wrecked (that’s why they push Warren Buffett the eugenicist so much).
Value is morally and politically comfortable, trend isn’t.
Value story:
buy cheap, unloved companies,
you’re patient,
you’re disciplined,
market eventually rewards prudence.
That narrative is:
Protestant, hard-work-coded, comforting to middle-class savers,
aligned with a sense of fairness (“cheap becomes less cheap”).
Trend story:
“We buy what’s going up and dump what’s going down.“
That is:
morally suspect in the public imagination,
caricatured as “momentum chasers” or “speculators”,
politically dangerous if you admit:
“Yes, many investors just piggyback on Central Banks and ride the herd.“
Regime optics:
They want people to believe:
prices mostly reflect fundamentals,
hard work and prudence pay,
markets are “fair-ish”.
Admitting trend following works because of policy waves and forced flows pushes people toward:
“It’s rigged".”
“You just front-run the Fed.”
“It’s all about insiders and pipes.”
This damages Gross Consent Product.
Trend forces you to talk about liquidity plumbing and the Controllers.
If you take trend seriously, you quickly get to:
why do trends exist?
why don’t they arbitrage away?
The honest answers:
Because policy changes, liquidity waves, and balance-sheet constraints create slow-moving, predictable flows.
Because big real-money players and Central Banks move in multi-year arcs, not instantaneously.
Because Value-at-Risk, regulations, and mandates force mechanical behavior.
This drags you into:
swap lines,
QE/QT,
ON/RRP and TGA,
bill vs coupon issuance,
bank capital rules,
Central Bank forward guidance.
In other words: into the plumbing and the Controllers.
Academia and mainstream media are not set up to teach:
“Here is how Fed/Treasury/CB/BIS, pension rules, and dealer balance sheets create multi-year trends you can profit from.”
They’re set up to teach:
“Markets are fair enough, fundamentals matter, if you work hard you can find mispriced cashflows.”
Trend exposes that “value” is sometimes a dumping ground.
If you show people:
For decades, “value factor” over-weighted sectors that were:
politically easy to punish,
structurally disrupted,
used in discipline theater,
while:
“Expensive but high momentum“ stocks often sat in:
quasi-monopoly platforms,
state-aligned cloud/ID/AI rails,
then people might ask:
“Wait, why is the ‘cheap‘ stuff structurally cheap? Who decides to crush banks/energy/telcos while letting platform tech and rails stay expensive?“
That again gets close to the meta:
certain sectors are designed to eat liquidity shocks,
certain rails are designed to be supported.
Trend exposes that retrieval.
Textbooks prefer to avoid all of that and keep the story at:
“Value works over the very long run, momentum is noisy, don’t worry.“
8.3 What to avoid / be cautious with
Companies that:
look important but are commoditized (no deep rail),
have high political optics but low functional indispensability,
are perfect scapegoats (big, hated, non-core).
These make great discipline theater when the Controllers need blood.
9. Non-investment implications
9.1 Don’t confuse ticker justice with system justice
A company being “caught” in scandal doesn’t mean “system fixed”.
Often:
function: stays,
company: pays a fee, maybe rebrands,
narrative: “we cleaned up this sector”.
From the system’s point of view, that’s maintenance, not reform.
9.2 Publicly-facing Elites ↔ Publicly-facing Companies
Humans and corporations are just two sides of the same interface:
Avatars (Altman, Karp, Musk, etc.) translate for people.
State-embedded companies translate for institutions and machines.
The real “Controller layer” is:
standards,
data ontologies,
identity rails,
model governance,
and procurement lock-in.
Personalities matter mostly in Phase B (myth & capital formation). After that, function dominates.
9.3 Your advantage
Most people never ask:
“What role does this ticker play for the regime, for which factions, and on what horizon?”
They stop at:
TAM slides,
P/E,
maybe “moat”.
Once you ask the right question, the rest is just plumbing, timelines, and reading bandwidth/legitimacy constraints.
For more context, read: