Is the future federated? Or, why the hyperscaler are here to stay

2026-08-07T19:00:00Z

Sovereignty in the EU is now the trend, at least as a conceptual idea. Someone finally discovered that most of the Western world is dependent on a few US big companies, and the current status of Geopolitics is quite confusing, causing stomachaches and concerns among multiple governments.

Under these conditions, it is a good idea to understand the status of the mainstream internet services, including the so-called cloud and social networks. As explained in a past post, for some of these services, the EU situation is not so bad. We have many good companies that offer hosting and cloud services at a good level, and we have all the skills in-house. Therefore, at least for basic services, including distributed storage, email systems, and computing resources, we are in a position to be independent within a reasonable time frame. Of course, the number and extent of our data centers are not comparable, but if we do not have ambitions of offering such services worldwide, they can be enough for European use.

About social networks and instant messaging systems, among others, the situation is more concerning. While some alternatives exist, in many cases the network effect and first-mover advantage are strong and heavily weigh against building any real alternative. The tragic reality is that a pure distributed network of peers, which has been the core of the Internet since its birth, has been disrupted by the imposition of concentrated, single-company, non-standardized services. Think of WhatsApp, Facebook, LinkedIn, X/Twitter, Instagram, YouTube, or even the so-called alternative like Telegram or Bluesky. Most of the concrete alternatives are simply regional or restricted, simply a different incarnation of the walled garden concept. Think of TikTok, WeChat, Sina Weibo, and other regional services; they are simply different, isolated networks that do not communicate with others.

Like it or not, the only true alternatives for such systems are the fully federated services, such as Mastodon, Matrix, DeltaChat, or Peertube. There are literally dozens of such independent services based on open protocols, and they fully reflect the original idea of the Internet networking. Problem solved? Unfortunately, no, because the scale of such implementations is far from being comparable. We talk about thousands (about 1,5 million monthly active users in the luckiest case) of users against billions: a full order-of-magnitude difference, which causes evident network-effect problems. Common users are simply not incentivized to participate in such alternative services unless strongly motivated.

But imagine for a moment that all Internet users would like to enter the federated worlds.

In most cases, the typical federated server hosts a few hundred to a few thousand users. For such numbers, very small management teams and even small budgets could be viable and easily covered through crowdfunding. The most populated Mastodon instance (Mastodon.social) counts less than 1 million accounts with less than 300,000 daily active users currently. In a different service context, Codeberg supports less than 400,000 users and 700,000 projects, through 1,700 active members for its association (numbers of 2026). This is perfectly viable for a small-scale service and also the ideal situation with a good tradeoff between quality of service and efforts/size.

In our hypothesis, such servers would probably be subject to an average load multiplied by 1000 times, even in the case of fully working federated mutual help by smaller instances. In order to avoid service collapse, such instances would require an intensive architecture improvement and a significant increase in human effort for management. In other words, big money and the spreading of efforts among many individuals and organizations. Finding a tradeoff to avoid a new concentration and consolidation of services in the hands of very few actors would be the next challenge.

Again and again, my consideration is always the same: it is not only a matter of open protocols, mutual peers, and technicalities; it is a matter of governance and sustainability. The crude reality is that concentration among a very few active parties (just another oligarchy of service providers) could be unavoidable as the number of participants scales up. Of course, the only possibility of avoiding such evil concentrations is to ensure sufficient fragmentation by conception, for example, by imposing a maximum number of users per instance, or by maintaining small worlds of strictly thematic/regional instances.

So, federated services could be the answer for the future, but only by ensuring enough diversification of equal-weight instances, which could not scale at the same rate as the number of active users. Small is nice and safe, and this is the natural scale of federated servers to retain. In the opposite case, that would only become the next large walled garden, with serious sustainability problems and the constant temptation of having a new king of the realm. The obvious implication is that the mainstream bigco services will not be threatened by such alternatives, even considering that a lot of people are simply not aware/interested enough in privacy and digital rights. I think the only true limitation to well-known hypertrophic services can and should be found in international and national regulations, implemented with a grain of salt to avoid excessive problems and management load for federated services. Such a grain of salt and reasonability could be the key for the future, or, in the opposite case, establish the end of the Internet dream, which is already threatened by hyperscalers.

To understand the matter, think of Gmail, which is probably the most common email service worldwide. The most credible estimate is that almost 40% of email traffic is managed there, making the whole email thing a fully federated service with a few dominant providers. Most users do not search for alternatives, and many may have multiple alternatives and Gmail in use for different purposes. Even in these conditions, email is an example of a successful federated service. I would be happy if social networks moved in such a direction, frankly.

A completely different matter is the AI drama, where I see most of the risk for the future, for both Europe and most of the free world. Incredibly enough, the only current concrete alternative to the hypertrophy of less than a handful of US giants is represented by the open-weights, Chinese models. They could also be used at a reasonable scale locally, even if not for personal use. Unfortunately, the finest models are also extremely demanding for computing resources (both in terms of memory, storage, and GPUs) and out of reach for individual use. They can be considered for business investments, but it is already evident that a lot of effort is required to create an effective harness, where most of the value is currently present. The whole framework of agentic software and the capability of aligning models to goals will be the challenge of the future, but that will be out of reach for most users (including most companies), who the limits of general providers (OpenAI, Anthropic, Google, or anyone else) will constrain.

More and more, I see personal computing in the AI context will consist of running software on someone else's cluster, with all obvious implications for privacy and security for the average user. We will live sad times about that, with personal computing becoming managed computing, and users reduced to customers. Of course, the biggest problem is the awareness of users in such conditions, which appears more and more complicated due to the absence of a fully independent alphabetization policy in this new(?) digital world.

But maybe this is matter for another post...

frankie-tales

Is the future federated? Or, why the hyperscaler are here to stay