How US and Chinese tech companies thrive on surveillance economy

If there was ever a reason to be bullish on Chinese technology stocks then the revelation of a massive digital dossier of Australia's good and great would be it.

The accumulation of a database rich with details on luminaries spanning politics, business and technology testifies to China's emergence as a power player in the global surveillance economy, one in which the spoils go to those who can collect, collate and analyse at scale and speed.

Zhenhua Data's ability at scraping the web on an industrial scale serves not only as a wake-up call to Australia's cyber-sentinels in government and business, it also demonstrates China's closing of the technological capability gap at a time when the ascendance of the digital economy – and the ability to adapt to it – is viewed as a source of national competitive advantage.

For investors scouring the rapidly evolving technology landscape for opportunities, Silicon Valley is no longer the be-all and end-all as Chinese companies embrace elements of its capital-light and "fail fast" culture.

And that's why as more global capital flows into China's financial markets it is being allocated into the nation's technology stocks, even as policymakers grow increasingly squeamish about Beijing's wolf warrior diplomacy and economic coercion.

While the Nasdaq has dominated the headlines with its record-breaking run, its 21 per cent gain this year lags the 52 per cent rise in the Hang Seng Technology Index and the 41 per cent rise in the mainland's ChiNext Index, a gauge laden with small technology companies.

Global technology investors are being spoiled for choice as both US and Chinese companies pursue initial public offerings that open opportunities to access hot areas such as software, cloud and payments.

Hong Kong has stolen New York's thunder after payments giant Ant Group, owner of Alipay, picked the financial hub for a possible $US30 billion ($41 billion) IPO that could value it at $US300 billion – the same size as JPMorgan.

Other upcoming IPOs include virtual goods platform Fulu and Ming Yuan Cloud, a provider of software to the real estate industry.

Meanwhile, this week will be massive for US software IPOs headlined by Snowflake, a cloud-based data warehousing platform that last week scored a $US250 million investment from Warren Buffett's Berkshire Hathaway.

Other IPOs include gaming software provider Unity and data software platform Sumo.

The rise of cloud and data companies is partly a function of the surveillance economy, one where spooks, social media or everyday companies collect info for national advantage or to make money.

Amid the hand-wringing about Zhenhua Data's data collection, it's the prospective IPO of one US company – Palantir – that showcases a raw fact: the surveillance economy is a money-making opportunity.

Palantir is unashamed about the work it does. Its Gotham and Foundry platforms help militaries and intelligence agencies to collect and process data as a key element in enhancing national security.

"Software projects with our nation’s defence and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace," Palantir CEO and co-founder Alex Karp said.

"For many consumer internet companies, our thoughts and inclinations, behaviours and browsing habits, are the product for sale. The slogans and marketing of many of the Valley’s largest technology firms attempt to obscure this simple fact."

Data is the currency and source of power in the 21st century. The battle for supremacy has just started and is driving the growth of companies with the technology to corral the information that you, me – all of us – give away for free. We're complicit.

But don't say you weren't warned.

Sun Microsystems founder Scott McNealy quipped in 1999: "You have zero privacy anyway. Get over it." How right he was.