> On sufficiently long time scales, the internet will not tolerate states, and states will not be able to withstand the influence of the internet
To the extent that this is correct, it means states cannot tolerate the internet, and will transition to not using or allowing it.
> these are qualities that make what are today fundamental aspects of statecraft, such as state secrets, intellectual property, control over money supply and trade, surveillance, and censorship, impossible.
State secrets are primarily voided by cheap surveillance, e.g. that a laser microphone is now a high school project.
IP is covered by international agreements, though may be voided by AI.
Control over money is done by requiring residents pay taxes in whichever currency, nothing about the internet changes that.
Supply and trade correspond to people with guns on the borders, that's only going to change with personal nanoscale 3D printing and delivery by orbital bombardment, not the internet.
Surveillance is likely to get much more prevalent rather than become impossible, e.g. aforementioned laser microphones.
Censorship might become impossible. Or perhaps we'll find new ways to do it. Jamming works by increasing the noise so you can't get a signal, GenAI may do that easily.