This paper examines how asymmetries in digital power between multinational technology firms and small states constrain the exercise of sovereignty in the digital age. Drawing on a qualitative case study of New Zealand, selected as a least-likely case because of its strong public institutions and digital governance capacity, the research analyses government AI strategies, cabinet briefings, procurement documents, legislation, regulatory impact statements, and Official Information Act responses. The findings reveal a consistent pattern: while the state clearly identifies the risks associated with platform dependency, vendor lock-in, and concentrated digital power, its ability to act is constrained by reliance on the same corporations that underpin public administration and digital infrastructure. This dynamic is evident across cloud procurement, platform regulation, digital taxation, and AI governance. The paper argues that these findings are consistent with an emerging form of digital colonialism in which dependency is reinforced through infrastructure, economic asymmetries, and narratives of technological progress and partnership. It introduces two concepts to explain this dynamic: the digital sovereignty gap, describing the distance between a state's stated digital governance objectives and what it achieves in practice, and competent digital-dependency, describing governments that recognise the costs of platform dependence yet continue to deepen it.
