Where is the AI Race Going?

We have already coined the term Geopolitics of AI and explored how nations are locked in a fierce contest to innovate and remain competitive.

By now, LinkedIn is flooded with posts about the latest AI tools, each promising to revolutionise industries, streamline operations, and redefine success.

But let’s be honest—most of this is noise.

This conversation has been hijacked by an endless chase for the latest tool, the newest revelation, and the next trend.

The bigger picture? It’s being ignored.

As someone deeply involved in due diligence and an investor in innovation, I see a major gap in how we discuss AI.

This piece is not just another take—it’s a must-read for those who want to cut through the hype. Investors, inventors, and SMEs alike cannot afford to waste time clicking on every LinkedIn post that dangles a shiny new tool or a free course in front of them.

The real question is not which AI tool will make your work easier tomorrow but

Who is shaping AI’s future, and what does that mean for you?

The AI Battleground: Shaping Global Power Dynamics

AI is fuelling geopolitical competition, fostering unprecedented innovation, and posing intricate regulatory challenges. It is reshaping every facet of modern life, from economic growth to national security and the reconfiguration of global alliances. The race to dominate this transformative technology has never been more intense.

Mastery of AI extends beyond technological success; it is about redefining global influence. Control over critical AI infrastructure, strategic alliances, and regulatory frameworks determines the future of power.

While the United States and China continue to lead, emerging players such as India, Russia, Europe, and the Global South are asserting their presence, adding new layers of complexity to the evolving geopolitical landscape.

AI as a Possible Geopolitical Battleground

AI is reshaping global power structures through a delicate balance of innovation, ethics, collaboration, and competition. Nations are engaged in a struggle for dominance across critical domains, including semiconductor manufacturing, data control, and talent acquisition.

The advantages gained in these areas will define the next era of global leadership, ushering in a multipolar AI landscape.

Regional hubs and shifting alliances will increasingly challenge the traditional centres of power, marking a departure from the once-monolithic structures of influence.

AI and National Security: A New Arms Race

The integration of AI into military and intelligence strategies is redefining global security.

Autonomous systems, cyber capabilities, and AI-driven surveillance tools are rapidly altering warfare and national defence. Autonomous drones, as demonstrated by Turkey’s Kargu in Libya, exemplify the next frontier of military technology.

The United States Department of Defense’s Project Maven is leveraging AI for enhanced drone targeting, while China is embedding AI capabilities into its hypersonic missile systems. These developments underscore the growing reliance on AI for strategic advantage.

The implications of AI-driven surveillance raise profound ethical and legal concerns. China’s social credit system exemplifies the tension between national security and civil liberties.

The intersection of AI and military power necessitates urgent international dialogue, yet debates at the United Nations over lethal autonomous weapons remain unresolved.

As nations continue to develop AI-powered defence mechanisms, the world faces a critical juncture: Will AI fortify global security, or will it usher in an era of unchecked military escalation?

AI and Economic Competitiveness

The economic implications of AI are equally profound.

Semiconductors form the backbone of AI advancement, and nations are investing heavily to secure dominance.

AI is shaping financial markets, healthcare, and manufacturing.

AI-driven automation is transforming financial technology, while advancements in medical diagnostics and drug discovery promise to redefine global healthcare.

In manufacturing, AI-powered smart factories are setting new standards for efficiency and production.

The divergence between the United States’ venture-driven innovation model and China’s state-led approach is fostering a divided technological landscape, a division that will define the future of global economic power.

Geopolitical Competition: The AI Standards Issue

AI is a technological race and a battle for influence in setting global standards.

The United States and China are competing to define AI governance, with the European Union advocating a regulatory framework that prioritises ethical considerations.

China’s Digital Silk Road is expanding its AI infrastructure into emerging markets, challenging the dominance of American cloud giants such as AWS and Google.

Meanwhile, smaller nations, including the UAE and Singapore, are positioning themselves as neutral AI hubs, attracting investment and fostering innovation.

India’s burgeoning IT sector further reinforces its standing as a significant player in AI’s global trajectory.

The Infrastructure Power Struggle: Data Centres and Sovereignty

AI depends on robust data infrastructure, yet this necessity presents geopolitical and energy challenges. The United States faces an ageing infrastructure that creates energy bottlenecks, while China is investing in mega data centres in Guizhou, harnessing hydropower to meet escalating demands.

The European Union’s Gaia-X initiative reflects the growing emphasis on data sovereignty, seeking to unify cloud governance under European regulatory oversight.

Sustainable solutions are emerging, with Iceland’s geothermal-powered data centres providing a model for energy-efficient AI processing.

Data localisation laws are introducing further complexities, as countries such as Vietnam and Indonesia enforce stringent regulations that require data to be stored within national borders.

These measures, intended to strengthen national control, simultaneously increase costs for global firms and disrupt international AI collaboration.

The struggle for data control underscores the geopolitical significance of AI infrastructure as nations seek to secure their digital sovereignty in an increasingly fragmented landscape.

Global Collaboration vs. Techno-Nationalism

The tension between global AI collaboration and rising techno-nationalism is shaping the future of innovation.

Regulatory divergence is becoming increasingly pronounced, with the United States prioritising innovation-first policies, while the European Union places ethical considerations at the core of its regulatory agenda.

Data sovereignty disputes, such as the invalidation of the EU-US Privacy Shield, are complicating international AI governance. Russia’s development of a sovereign internet and India’s enforcement of data localisation laws signal a broader trend of fragmentation in the digital world.

Despite these challenges, collaborative AI initiatives offer hope for a more cooperative future. Climate AI programmes such as AI for Earth exemplify the potential for shared goals to bridge geopolitical divides.

The question remains whether artificial intelligence will continue to fragment global governance or whether nations can find common ground in leveraging AI for collective progress.

The Role of the Global South in AI’s Future

The AI landscape is no longer confined to a binary struggle between the United States and China. Emerging powers are asserting their influence, reshaping the narrative around AI development and governance.

South Korea, Taiwan, Japan, and the Netherlands hold strategic positions in the semiconductor supply chain, granting them considerable leverage in AI geopolitics. India, Brazil, and South Africa are establishing themselves as AI innovation hubs, demonstrating the transformative potential of AI in addressing societal challenges.

The Future of AI Geopolitics: What Comes Next?

The world stands at a crossroads. Will artificial intelligence catalyse international collaboration, or will rising techno-nationalism deepen divisions?

The trajectory of AI geopolitics will define the balance of power in the twenty-first century.

Stay tuned for part 2.