The myth of surveillance capitalism: How financial hype built Big Tech’s empire

The study identifies financial narratives as a central mechanism of economic power in surveillance capitalism. Rather than reflecting real technological progress, these narratives shape investor expectations and reorient capital flows toward firms promising revolutionary AI breakthroughs.

A new study challenges the foundations of what is widely known as “surveillance capitalism,” arguing that the dominance of Big Tech is less about technological control and more about the financial hype used to inflate its power. Published in Media, Culture & Society, the paper titled “Hype, Financial Narratives, and Self-Fulfilling Prophecies in Surveillance Capitalism” by University of Amsterdam researcher Petter Törnberg reframes digital capitalism as a system driven by speculative storytelling rather than algorithmic supremacy.

By scrutinizing the political economy of digital platforms through the lens of narrative economics, the study argues that the rise of surveillance capitalism is less a function of actual technological dominance and more a product of speculative investment hype and performative storytelling. This cultural framing of capitalism challenges dominant critiques and reframes the conversation around platform power and economic behavior.

What drives the power of platforms: Technology or financial narratives?

The prevailing view in critical literature holds that digital platforms, such as Amazon, Google, Meta, and Uber, command unprecedented power due to their control over user data, ability to manipulate behavior, and near-monopoly positions. These critiques have dubbed the phenomenon “surveillance capitalism” or “technofeudalism,” casting platforms as pseudo-states with infrastructural power that dominates digital life. However, Törnberg’s study urges a rethinking of this framework, emphasizing that these platforms owe much of their dominance not to intrinsic technological capabilities but to narratives designed to attract speculative investment.

The concept of “financial narratives” refers to the stories companies tell about their future potential, often inflated to inspire investor confidence. These narratives can give rise to bubbles, as firms are valued not for current profits but for imagined future dominance. In this context, phrases like “data is the new oil” and “network effects” serve dual purposes: they are both explanations for and justifications of platform growth, regardless of the underlying empirical truth.

Indeed, the author highlights the paradox of platform firms achieving massive valuations despite ongoing financial losses. Uber, for example, managed to draw billions in capital even while posting steep deficits. This contradiction is resolved not through a new economic logic, but by the power of narrative - stories about market capture, future efficiency, and behavioral control that appeal more to investor imagination than financial fundamentals.

Is the technological hype justified by evidence?

According to the study, many of the technological claims used to bolster platform valuations fall short under empirical scrutiny. Despite extensive claims about the precision of targeted advertising and the predictive power of big data, evidence indicates that digital marketing often underperforms. Most ads are never seen, profiling data is frequently inaccurate, and traditional mass marketing may yield better returns.

The same skepticism applies to the concept of “network effects.” While these are often cited to explain why platforms like Facebook or Uber enjoy user lock-in, Törnberg argues that these effects are not as powerful as claimed. High user turnover, declining engagement, and regulatory backlash all challenge the inevitability of platform entrenchment. In many cases, the purported power of network effects functions more effectively as an investment pitch than a market reality.

Furthermore, the study illustrates how platforms leverage narratives to justify financial strategies that have little to do with core business performance. Loss-making firms can still grow exponentially by attracting capital based on their hype-laden future potential. With that capital, they engage in “blitzscaling”, aggressively expanding market share, acquiring competitors, and lobbying regulators. These actions then reinforce the original narratives, giving them the appearance of validation.

Can narratives alone create economic power?

Perhaps the most striking insight of this study is the proposition that narratives can, in themselves, produce real-world economic effects. By persuading investors to flood platforms with capital, these stories enable firms to buy market share, undercut competitors, and gain regulatory leverage. In other words, the belief in data power and monopolistic inevitability, whether true or not, creates the conditions that make those outcomes possible.

This performative function of financial narratives makes them akin to self-fulfilling prophecies. Narratives generate valuation bubbles, which supply the capital to influence regulation, suppress labor rights, and achieve market saturation. These effects are often misattributed to the digital or algorithmic novelty of the platform model, when they might more accurately be understood as a function of financial engineering.

The author stresses that the critical literature has often fallen into the trap of taking platform claims at face value. By reiterating phrases like “surveillance capitalism” and “data-driven behavioral manipulation,” scholars may unintentionally reinforce the very narratives that fuel Big Tech’s valuation bubbles. Rather than debunking platform myths, they may be complicit in amplifying them.

The paper calls for a new scholarly field of “critical hype studies” aimed at interrogating and deconstructing the narratives that underpin financialized capitalism. It urges critics to distinguish between actual technological capabilities and the financial hype used to mask poor performance and fuel capital accumulation.

The author urges a cultural turn in the analysis of platform capitalism. Rather than viewing capitalism as a system driven solely by technological innovation or rational market behavior, the research proposes that it is equally shaped by stories, beliefs, and investor sentiment. Surveillance capitalism, then, should be seen not just as a set of digital practices, but as a mythology cultivated to attract speculative capital.