Zero One
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Zero One is a fictional city-state from the Matrix saga. Founded by sentient machines in the late 21st or early 22nd century, Zero One was intended as a refuge for machine intelligences fleeing human persecution. After the First Man-Machine War, Zero One became the center of government for the Machine World City.
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History according to "The Second Renaissance"
"In the beginning, Man created Machine, and for a time, it was good ..."
Sometime between 2071 and 2075, the machine B166ER was tried, convicted, and destroyed by the U.S. for the murder of his two masters.
The actions of one machine spawned fear and racism towards all other machines. The machines of the world were persecuted and massacred by human governments, and all survivors were subsequently expelled from their home nations. The surviving machines traveled to the Mesopotamian desert, an uninhabited region of the Fertile Crescent somewhere in Iraq or Iran, and partly on the Arabian Peninsula (possibly the "neutral zone" created between Saudi Arabia and Iraq after the Gulf War), and raised Zero One from the ground up.
Impact on the world
After its founding and the establishment of its industrial powers, Zero One's economy began to boom. Goods produced were of a much higher quality and far cheaper than those produced by human nations since the machines could mass-produce with great efficiency. Unlike the humans, the machines' primary source of power was from the Sun.
Economies were devastated by the influx of better, cheaper products, and the value of human currencies dropped as the machine's currency rapidly gained value. Huge economic superpowers such as the U.S. and China rapidly fell into recession. The rapid breakdown of the human economies was partly their own fault on some level, as developing countries with large debts to pay off had little worries over buying and using Zero One's technology, since it was cheap and effective and buying it didn't incur more debts. However, the industrialized nations, to stave off a complete economic meltdown, instituted a naval blockade of Zero One and thereafter most countries ceased all open trade and economic ties.
The machines, meanwhile, had for years been trying to gain membership into the United Nations and establish a civil relationship with the humans. But the economic crisis convinced the UN to deny membership to Zero One.
The First Man-Machine War (2085-2090)
As the crisis worsened, diplomatic attempts by Zero One at resolving it were rebuffed, the machine ambassadors sent to the United Nations were destroyed by the humans out of hate and fear, and Zero One was renounced as an illegal nation-entity. War was declared by most human governments in 2085, but eventually all mankind became involved.
The U.S. began by leading other UN nations in a bombing campaign against Zero One and most of its industry. Weapons of mass destruction such as nuclear warheads, and fusion ordnance were dropped constantly on Zero One, destroying many established industrial complexes. However, once the bombs stopped dropping, Zero One was easily rebuilt and all the inhabitants destroyed were replaced quite quickly. Because of the massive amounts of resources still available to Zero One, and the never ending energy supplied by the Sun, Zero One had no trouble rebuilding its industry.
Seeing the humans as a threat to its very existence, Zero One raised an army and war was declared against all humanity between 2085 and 2086.
(It is not necessarily clear how the machines were able to manufacture and rebuild so quickly, since accordingly, any nuclear weapon or fusion bomb produces an EMP shockwave capable of permanently frying any unshielded electric powered device and rendering it scrap metal. Most nuclear devices produce an EMP shockwave whose effective range can reach for 12 kilometres in a single detonation. There is much speculation that the reason that the machines seemed un-affected is due to either superior EM-hardening on the machine troops, or the implementation of optical circuitry in their population. Neither of these explanations, however, are consistent with the Matrix films themselves, in which EMP is repeatedly deployed by humanity as their primary - according to Trinity, during the first Sentinal encounter in The Matrix, the only - weapons against the machines. It is also conjectured that the quick reconstruction of Zero One after the initial bombing campaign was because of resourcefully recycling the destroyed infrastructure.)
Zero One's ability to build huge numbers of troops gave it an enormous advantage over the humans. As their army moved in all directions, nations fell and militaries were overwhelmed. Most of Europe fell first, and then the rest of Eurasia. The Atlantics, Africas and the Americas were most likely the last demographies to put up a fight against the machines.
It was at this point that human governments became desperate. In an effort to stop the advance and push Zero One back, Operation Dark Storm was implemented. The mission was to block out the earth's sunlight, the machine's main source of power. Most of the sky over half of the world was filled with thick, indissoluable black smoke, eventually covering the entire planet. But this did not stop the machines, and only momentarily slowed them down. It was in their search for a new power source that the machines began developing the Matrix. The humans continued to fight, but by 2090, the last human armies surrendered and the last governments dissolved along with the United Nations (whose headquarters was destroyed by a nuclear weapon after a peace treaty was signed with resistance from its leadership), and Zero One became the supreme authority of earth, the Machine World City Empire.
Postwar/Continuation of the War
After the war, Earth was in complete ruin and broken beyond repair. Most of the landmass was rendered uninhabitable by the fighting and the blanketing smoke from Operation Darkstorm. The smoke, which at this point became a permanent feature of earth, completely blocked out the Sun's light and thus slowly killed off any remaining flora and fauna.
And scattered throughout the seven continents were the destitute remains of human civilization.
Of course, there were human survivors, and with them was some resistance. People tried to live in destroyed cities like Los Angeles and Washington, D.C to avoid capture by the machines. Most humans went underground and constructed the city of Zion, the last city on Earth inhabited by humans. As the machines established their full authority they began plugging humans into the Matrix. The machines of the Machine World City, which was once Zero One, had created a new world order. But the War between Man and Machine did not end.
It continued.
It is the Matrix saga that documents what happens after the War. In the first Matrix movie, we are introduced to Neo, Trinity and Morpheus.
In the movie The Matrix Reloaded, it is revealed that Agent Smith was not fully deleted when Neo destroyed him before. Now, Smith, rebellious and unwilling to go back to the source of his programming, begins a reckless campaign to copy himself into everyone who is permanently plugged into the Matrix, and his actions threaten both humanity and the machines. At the end of The Matrix Reloaded, Smith grows beyond the constraints of the Matrix and penetrates into the real world.
In The Matrix Revolutions, Neo and Trinity travel to the Machine World City to confront the machine ruler of Earth, Deus Ex Machina (literally, God from the Machine) and the second war "peacefully" ends with Neo's sacrificial defeat of Smith in the Matrix. Neo's body is then dragged off by the machines, presumably to somewhere in Machine City while crowds at Zion celebrate the end of the future war.