The Bundling Effect: Why Hedging Between US and China Is Dying
During hyper-globalization, you could pick and choose: military alignment with the US, economic integration with China, financial ties with Europe, tech partnerships wherever optimal. Now it's bundled. If you pick one domain, you increasingly get locked into that bloc across all domains.
Key Components
The ASML Case
The ASML case illustrates this perfectly: if you want to remain in the US tech ecosphere and under the US defense umbrella, you comply with technology export restrictions to…
What This Means Practically
During the unbundled era, a European company could:
The Corporate Dilemma
Companies that built strategies around arbitraging between blocs face a reckoning. The arbitrage opportunities are closing as alignment in one domain forces alignment in others.
Key Takeaway
As the Economics of Lithography shows, technology chokepoints are where bundling becomes visible. ASML can't be neutral because its technology is too strategic.
Real-World Examples
Target
Key Insight
As the Economics of Lithography shows, technology chokepoints are where bundling becomes visible. ASML can't be neutral because its technology is too strategic.
Exec Package + Claude OS Master Skill | Business Engineer Founding Plan
FourWeekMBA x Business Engineer | Updated 2026
During hyper-globalization, you could pick and choose: military alignment with the US, economic integration with China, financial ties with Europe, tech partnerships wherever optimal. Now it’s bundled. If you pick one domain, you increasingly get locked into that bloc across all domains.
The ASML Case
The ASML case illustrates this perfectly: if you want to remain in the US tech ecosphere and under the US defense umbrella, you comply with technology export restrictions to China. You can’t have US security guarantees while selling cutting-edge lithography equipment to Chinese chip โ as explored in the economics of AI compute infrastructure โ makers.
The unbundling that enabled hyper-globalization is reversing. Hedging is dying. Bundling is back.
What This Means Practically
During the unbundled era, a European company could:
– Rely on US military protection
– Source manufacturing from China
– Access capital from London and New York
– Partner with whoever offered the best technology
In the bundled era, these choices become linked. Tech alignment follows security alignment. Financial access follows political alignment. Manufacturing location signals bloc membership.
The Corporate Dilemma
Companies that built strategies around arbitraging between blocs face a reckoning. The arbitrage opportunities are closing as alignment in one domain forces alignment in others.
The strategic question isn’t “how do we optimize across both blocs?” It’s increasingly “which bloc are we in, and how do we maximize within that constraint?”
Key Takeaway
As the Economics of Lithography shows, technology chokepoints are where bundling becomes visible. ASML can’t be neutral because its technology is too strategic.
What is The Bundling Effect: Why Hedging Between US and China Is Dying?
During hyper-globalization, you could pick and choose: military alignment with the US, economic integration with China, financial ties with Europe, tech partnerships wherever optimal. Now it's bundled. If you pick one domain, you increasingly get locked into that bloc across all domains.
What is the asml case?
The ASML case illustrates this perfectly: if you want to remain in the US tech ecosphere and under the US defense umbrella, you comply with technology export restrictions to China. You can't have US security guarantees while selling cutting-edge lithography equipment to Chinese chip โ as explored in the economics of AI compute infrastructure โ makers.
What is the corporate dilemma?
Companies that built strategies around arbitraging between blocs face a reckoning. The arbitrage opportunities are closing as alignment in one domain forces alignment in others.
What are the key takeaway?
As the Economics of Lithography shows, technology chokepoints are where bundling becomes visible. ASML can't be neutral because its technology is too strategic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
