Private militaries are an older concept than even nation states.
At one point in the recent past, Chevron had the one of the largest Navies (with weapons) in the world.
At one point in the recent past, Chevron had the one of the largest Navies (with weapons) in the world.
Lets say, Facebook/Google/Amazon provides better infrastructure and security services to some community in India than the local municipality can, because it pays more for it, then the community might actually prefer them.
Now the corporation has a foothold, with armed security services, that are more powerful than the state security - and with the will of the people.
Alphabet is dipping it's toe into the water here with Sidewalk labs.
It's not state to state competition like you may be thinking. That's not how this happens. It's a slow creep/encroachment until you realize you're outgunned and the enemy owns the inside of the wire.