Dr Mark Nasila | Chief Analytics Officer | Chief Risk Office | FNB | mail me |
Artificial intelligence (AI) is reshaping global power dynamics, economic frameworks and security considerations. While it offers immense opportunities, it also raises significant concerns. These include governance, ethical standards and its potential use in both civilian and military contexts.
AI has become a pivotal factor in global geopolitical competition. Leading nations recognise its potential to reshape power dynamics. In 2017, Russian President Vladimir Putin said, “Artificial intelligence is the future not only of Russia but of all of mankind.”
Five years later, Chinese Communist Party General Secretary Xi Jinping also emphasised the importance of AI. He stated, “We will focus on national strategic needs, gather strength to carry out indigenous and leading scientific and technological research, and resolutely win the battle in key core technologies.”
In 2023, then the United States (US) President Joe Biden echoed similar sentiments. He said, “We’re going to see more technological change in the next five to ten years than we’ve seen in the last 50 years … artificial intelligence is accelerating that change.”
These statements underscore the intensifying race among nations. They seek to harness AI for strategic, economic and military advantages.
The evolution of sovereign AI
AI’s rapid evolution brings significant implications. These include its potential to redefine global supply chains and grant strategic leverage to countries with advanced AI capabilities.
AI is also set to revolutionise warfare through autonomous systems, enhanced intelligence analysis and sophisticated battlefield management. However, this advancement raises concerns about escalation risks and the erosion of human oversight in critical decisions.
Two prevailing narratives shape current debates about AI’s influence. First, some see it as inevitable that AI will lead to global competition in technology, leadership and economic power. Second, others argue that AI disruption is so far-reaching that it might give machines control beyond human oversight. However, critical questions remain. Who benefits from these developments? How do they shape technological and political realities as well as public opinion?
Amid these developments, major powers are competing not only in technology but also in setting norms, standards, and governance frameworks. For instance, the European Union (EU), through initiatives like the AI Act, seeks to navigate this complex landscape. It promotes a human-centric and responsible approach to AI. At the same time, it aims to bolster European technological sovereignty and reduce strategic dependencies.
The US AI industry
The US AI industry is growing rapidly, though it remains in its early stages and has limited scope. AI-related projects now account for a larger share of federal research and development (R&D) spending at universities. Additionally, AI startups have grown significantly. They now represent over 5% of all tech startups, up from less than 1% a decade ago. Despite this progress, the field is still considered emergent.
Anupama Vijayakumar’s study examines the potential impact of AI on the emerging world order. It focuses on how major powers, including the US, China and Russia, invest heavily in AI R&D to strengthen their geopolitical status.
Scholars argue that these nations engage in a global AI race. They aim to use this technology to increase economic productivity and military strength, positioning themselves ahead of others.
For the US, which is already a global superpower, AI offers a tool to maintain or reinforce its dominant status. This technology may compensate for the perceived decline in US global influence. This perception has grown especially after its costly involvement in Afghanistan and China’s rising economic power.
Meanwhile, according to Mark Craddock (2025), China views AI as a tool to enhance national strength. China aims to challenge US supremacy and emerge as a global superpower in the coming decades. Russia shares a similar perspective. It hopes to use AI, alongside cyber tactics and space weaponry, to elevate its military. In doing so, Russia aims to negotiate on more equal terms with the US and regain some global influence lost since the fall of the Soviet Union.
The global AI race, marked by competing technological capabilities, could significantly influence the global power structure. Vijayakumar draws from historical trends to argue that advanced capabilities alone do not guarantee increased power. Nations must align their institutions and policies to manage technological disruption. At the same time, they must take advantage of AI’s potential.
The American and Chinese advantage
In the same week President Trump announced plans to invest up to $500 billion in AI, a Chinese AI model called DeepSeek was unveiled. This model cost a fraction of what OpenAI spent developing ChatGPT.
The semi-open-source DeepSeek is also far less computationally intensive. As a result, chipmaker Nvidia’s share price fell 17%. This decline sheared $600 billion off the company’s market capitalisation. It marked the largest single-day loss Wall Street has ever seen.
Investors are now beginning to question whether US big tech companies’ AI spending is excessive. They are also exploring whether alternative means of achieving AI dominance can be harnessed.
As the US and China continue to dominate AI development and tighten control over its necessary inputs, companies will face significant challenges. These challenges arise from differing regulatory and commercial approaches between the two powers.
Governments are pressuring traditional globalised business models. They emphasise the need for geopolitical and ideological alignment when selling AI services.
Businesses in the AI supply chain, and those in industries heavily impacted by AI advancements, must confront several key strategic issues. These include restrictions on global customer bases, intensifying corporate espionage, and emerging opportunities in third-country markets.
AI competition also involves other geopolitical swing-state players. These include the United Kingdom (UK), Canada, United Arab Emirates (UAE), France, Singapore, India, Russia, South Korea and Israel. These nations, particularly the so-called “middle powers”, are leveraging strong AI capabilities. They aim to maintain economic competitiveness and geopolitical influence in a world increasingly dominated by US-China rivalry.
Establishing sovereign AI systems in Europe
The EU is focusing on establishing technological sovereignty, especially in AI systems, as part of its broader goal of achieving strategic autonomy in defence.
Through initiatives like the European Defence Fund, the EU supports emerging defence technologies, including AI. It fosters innovations from non-traditional sources. These technologies contribute to both civilian and military domains. In these areas, they play a key role in developing cutting-edge defence systems.
The EU also seeks to assert its position in the global AI race through its European AI Strategy. This strategy promotes AI leadership while ensuring development remains human-centric and trustworthy. The EU is implementing this strategy across Europe. It focuses on increased innovation, development, and the creation of a unified legal framework for AI, as outlined in the AI Act.
Unlike the US and China, which rely on large-scale tech companies and state-backed initiatives, the EU leans on its research capabilities and regulatory strength. It oversees AI development within a democratic governance framework and under the rule of law.
While individual nations often see AI as a tool for geopolitical influence and national security, the EU approaches the technology differently. It emphasises economic, social, and regulatory perspectives. However, in recent years, the EU has adopted a more geopolitical stance. Leaders like Thierry Breton and Ursula von der Leyen stress the need for Europe to master key technologies. These include AI, quantum computing, and critical chips. Their goal is to secure Europe’s place in the emerging global order.
The rise of the digital empire through sovereign AI
AI’s rapid advancement is unfolding at such a pace that predicting its future implications is difficult. However, its influence already spans technology, commerce, and geopolitics. As we navigate this inter-AI period, humanity holds the power to shape the AI-driven future.
In 2024, major democracies such as India, the U.S., and Indonesia held elections. These events revealed how AI can both strengthen and undermine democratic processes. AI’s role in warfare will also become clearer. It is transforming military strategies, including the development of autonomous weapons that may operate without human input.
In the medium term, AI will revolutionise various sectors. These include scientific discovery, healthcare and global industries. Sovereign AI has already sped up vaccine development. It is poised to accelerate innovation in drug discovery and disease detection. However, this progress carries potential dangers. These include AI’s application in biological and other forms of advanced weaponry.
Moreover, AI’s rise may intensify geopolitical competition. This is especially likely between the US and China. As a result, other nations may feel pressured to align with one of these powers to secure their digital sovereignty. AI’s impact will be felt across society. It raises concerns about job displacement as automation takes over many labour tasks.
While job losses are expected, history has shown that technological revolutions often create new industries. These new sectors typically offer opportunities that improve overall social welfare. As we move forward, the key challenge will be shaping this new technological era responsibly. We must integrate human-like intelligence – or future artificial general intelligence – into society in ways that uphold ethical principles and promote global collaboration for the common good.
Sovereign AI and Africa’s potential
African countries have the potential to play a pivotal role in shaping the global AI landscape. They could position themselves as swing players, similar to countries like Norway.
With strategic planning and focused investment, African nations can use AI to drive economic growth, social development and innovation. At the same time, they can influence international AI standards and practices. Achieving this requires a multifaceted approach.
African governments must learn from nations that have successfully integrated AI into their economies. This includes crafting comprehensive national AI strategies. These strategies should prioritise innovation, funding and collaboration with private enterprises, universities and research institutions.
Talent development is another cornerstone of success. By investing in education and training programs across all levels, Africa can cultivate a skilled workforce. This workforce will be capable of driving AI innovation.
Africa must also prioritise data infrastructure and governance. This ensures the ethical and effective use of AI. Encouraging data sharing between public and private entities, while enforcing robust data privacy and security laws, can foster trust and innovation.
Open data initiatives, modelled on those in countries like Estonia and Denmark, can further accelerate research and application across sectors. Coupled with strong ethical frameworks and measures to reduce algorithmic bias, these efforts can position Africa as a leader in responsible AI development.
Finally, African countries should focus on AI applications tailored to the continent’s unique challenges and opportunities. This approach will maximise the regional impact of AI.
