Artificial intelligence may feel like the ultimate digital frontier, yet it’s driving one of the most profound physical transformations in business today. Digital-native companies are investing billions in physical infrastructure and diversifying beyond software, while traditional retail businesses are embracing digital-first strategies, rolling out subscription models and mobile commerce apps.
The line between “tech” and “retail” is vanishing, creating a hybrid landscape where success demands mastering both the digital and physical realms. For finance leaders, this convergence brings new opportunities—and risk.
Digital companies get physical
AI-driven businesses can’t run complex neural networks on cloud alone. They need specialized hardware and data centers purpose-built for intensive workloads. Leading frontier labs like Open AI, Anthropic, and xAI are all making heavy infrastructure investments, while so-called “hyperscalers” such Google, Amazon and Meta are expected to invest more than $1 trillion between 2024-2027, according to S&P Global. Echoed Ethan Choi, a partner at leading venture capital firm Khosla Ventures “In over a decade of investing in software, I have never seen capital expenditure on infrastructure so crucial. As we embark on a fundamental reformation of the technology stack, from new chip technology to massive multi-year real estate developments, software now takes physical form.”
For other companies, the question of digital or physical evolves by the day. Take Planet Labs, for example—a satellite imagery company that primarily sells data subscriptions to governments and multi-national corporations. This year started with an announcement that anyone could buy on-demand satellite imagery by simply adding it to their cart and paying $300 through Stripe checkout. Within a couple weeks they announced sales of physical satellites to the tune of $230 million. Their finance teams must manage intricate compliance across multi-year, government contracts while making sure to get the sales tax right at your home address.
Traditional companies embrace digital
Conversely, “traditional” commerce continues to evolve and adapt. The rise of headless commerce and seamless payment integrations means customers can purchase anything, anywhere, using any device. Yet each innovation brings new questions: If you buy online and pick up in-store, how is that sale categorized? Where did it occur? If you buy your kid a pink guitar for their birthday and it comes with an instructional app subscription, did you buy a physical product or a digital one?
Brands like Nike and Walmart illustrate this evolution, investing heavily in digital platforms and technology-driven logistics to meet consumers wherever they shop. Traditional brands are modernizing their backend operations and hiring finance leaders equipped to manage this new paradigm.
In a world of change, taxes remain certain
While AI and digital transformation create an increasingly unpredictable business landscape, one thing remains constant: Tax obligations will follow your business everywhere.
The Supreme Court’s 2018 South Dakota v. Wayfair decision marked a watershed moment, allowing states to collect sales tax from remote sellers even without physical presence. This fundamentally changed the game for digital companies who previously operated with minimal tax concerns across state lines.
We’ve continued to see this evolution accelerate as governments worldwide determine the taxability of digital goods and company sales cross borders long before a business considers establishing a physical presence –its not uncommon to discover you have an international tax liability before you realize you have an international customer. Whether your company has just reached its first growth inflection point or is preparing to go public, increasing regulatory pressure means no one can afford to ignore tax compliance anymore.
A forward-looking approach to financial uncertainty
When I speak with forward-thinking finance leaders, they view uncertainty as opportunity. They recognize that most companies will continue to react to changes while they gain an edge from proactively anticipating them. By reframing financial compliance from a reactive necessity to a proactive strategic lever, these leaders drive growth while competitors struggle in regulatory quicksand in the dozens of jurisdictions they operate in.
Not sure where you stand? Ask yourself:
- Do compliance considerations accelerate or hinder our product roadmap?
- Can we enter new markets swiftly without regulatory surprises?
- Is our finance team focused more on forward-looking growth or bogged down by monotonous tasks that AI promised to solve?
Then consider some key steps:
1. Approach tax compliance like a risk-leader
According to a recent KPMG study, risk leaders view financial risk as the #2 business risk behind only cyber security, but it moves into the #1 spot when you ask about their level of preparedness. Build financial risk assessments and compliance planning into your expansion roadmap.
2. Bring your global picture into focus When you’re expanding internationally, piecing together tax information across multiple systems creates blind spots. Having a single view of your global tax footprint helps you make confident decisions faster and allows you to expand without worrying about implementation times, engineering resources and inevitable connectivity challenges that come from managing multiple solutions
3. Free up your team’s strategic brainpower Your finance team’s expertise is wasted on repetitive tax calculations and paperwork. By streamlining these routine tasks, you unlock their potential to focus on what really matters—supporting your company’s growth and finding new opportunities.
These approaches don’t just solve day-to-day headaches—they transform how you lead your finance function, turning tax from a roadblock into a strategic asset.
What’s next for Anrok
At Anrok, we’ve witnessed this evolution firsthand since our start in 2020. We’ve supported software companies like Anthropic, Notion, and Vanta as they transformed from startups into global brands. We’ve also heard from businesses across diverse industries—from compute servers to dog food—that seek strategic guidance in managing their growth and compliance risks.
Starting today, Anrok is broadening our platform to support all modern businesses. Over the coming months, we’ll continue to strengthen our capabilities so your business can thrive, no matter what you sell or where you sell it.
Ready to simplify your global expansion and harness tax as a strategic advantage? Learn more..
