The U.S. government has long looked out for U.S. companies, even to the point of staging coups (e.g. United Fruit Company). The Trump administration has been threatening
direct invasions while also levying tariff's and other actions when other countries try to enact taxation or legislation of American tech companies operating in their jurisdictions. U.S. tech execs have applauded and lined up to bend the knee. Now they're finding out that their products are replaceable.
The replacements aren't perfect, but an injection of new users and funding could allow them to improve rapidly. Meanwhile, American companies like MS and Google seem determined to enshitify their products and force AI adoption because they're financially entangled with OpenAI.
Is this bad for the U.S.? It depends on how fast Americans smarten up. MS needs to start putting their products first again. Meta needs to stop relying on their government links to coerce other jurisdictions into accepting utterly irresponsible products that cause social harm while producing no tax revenue to mitigate that harm. All Americans need to stand up to their government and force it to back down from imperialist aggression.
The U.S. and U.S. software have lost international trust and are now losing out to competitors because of it. Those competitors no longer need to be better or cheaper. Just trustworthy. It is possible to mitigate this loss of trust with prompt action, but every delay causes permanent harm. The world is watching.