The rapid evolution of generative artificial intelligence is reshaping the contours of global geopolitics. Power stakes are concentrating around superpowers, notably the United States and China. Scrutinizing this dynamic, the study conducted by Boston Consulting Group reveals profound implications for multinational corporations and emerging nations. The colossal investments in AI present opportunities as well as risks in the face of growing geopolitical tension. The increasing importance of technological innovation is aligned with strategies of national sovereignty, thus redefining the rules of the global game.
A complex dynamic
The global competition around generative artificial intelligence is emerging as a landscape with deep geopolitical ramifications. Influential figures from Boston Consulting Group (BCG) and its technology department, BCG X, have highlighted the crucial stakes of this AI race. In this context, superpowers, especially the United States and China, are distinctly standing out. The rise of countries considered as “intermediate powers” adds an additional dimension to this dynamic.
Geopolitical risks for businesses
Sylvain Duranton, global leader at BCG X, emphasized the considerable geopolitical risks that companies must face. Currently, about 44% of large companies have teams distributed around the world, surpassing the simple framework of their country of origin. These companies, by operating across multiple territories, expose themselves to varying regulations and sovereignty issues. These teams were formed well before the emergence of current geopolitical tensions.
During his discussions, Duranton mentioned a blatant imbalance in the AI race, particularly concerning investment. By comparing the market capitalization of tech companies, it becomes evident that the United States surpasses Europe by a factor of 20 and the Asia-Pacific region by a factor of 5.
Assessment of national AI capabilities
Nikolaus Lang, global leader at the BCG Henderson Institute, presented a thorough analysis of the AI capabilities of nations. The team focused on the development of large language models (LLMs) and identified six determining factors: capital, computing power, intellectual property, talent, data, and energy.
This study was based on concrete data, thus increasing the relevance of the results. The United States and China stand out as the uncontested leaders in the sector, bolstered by their lead in geopolitical and economic domains. Uncle Sam’s country holds the largest reserve of AI specialists, with approximately 500,000 qualified individuals.
The superpowers in AI
The massive investment in the AI sector by the United States is expressed through venture capital funding reaching $303 billion, complemented by $212 billion dedicated to research and technological development. The enormous computing power, estimated at 45 GW, reinforces their dominant position.
Lang specified the historical predominance of the United States, stating that since 1950, the country has been responsible for 67% of notable AI models developed, a trend that continues to reflect today. This strength is accentuated by considerable capital and strategic restrictions regarding access to advanced chips.
The case of China
China, positioning itself as the second superpower in AI, demonstrates notable strengths in data. It ranks among the best in e-governance and mobile broadband subscriptions, while presenting significant data center capabilities estimated at 20 GW. Massive investments in academic institutions focused on AI propel its growth in technology.
Despite restrictions on access to the latest generations of chips, Chinese AI models manage to bridge the gap with those of the United States. Examples of models like DeepSpeech illustrate this upward trend, where smaller teams and previous resources translate into significant advances. Lang anticipates that government support will continue to play a fundamental role in financing AI-related work.
Emerging intermediate powers
Beyond the superpowers, countries classified as “intermediate powers” are asserting themselves. The European Union, although behind the United States and China, occupies a promising position with a data center capacity of 8 GW and a talent pool of 275,000 AI specialists. This region also shows leadership in terms of leading scientific publications.
Middle Eastern nations, such as the United Arab Emirates and Saudi Arabia, leverage their capital power through sovereign funds to attract talent and develop computing capabilities. Asia, particularly Japan and South Korea, relies on already existing technological ecosystems while investing in research and development at a steady pace.
Geopolitical strategies around generative AI
The new dimensions of the geopolitics of generative AI are characterized by four fundamental dynamics. The United States continues to maintain its lead, aided by an unparalleled technological ecosystem. China, responding to this challenge, is making rapid progress and closing its gap. The intermediate powers find themselves forced to choose between developing supply and accelerating technological adoption.
As geopolitical tensions mount, companies are considering diversifying their AI supply chains to minimize associated risks. The emerging competition will depend on how nations and companies navigate the intersections of innovation, politics, and resilience.
Frequently Asked Questions about BCG and the geopolitics of generative artificial intelligence
What are the main geopolitical challenges related to generative artificial intelligence?
The challenges include competition between superpowers like the United States and China, the risks associated with divergent regulations between countries, as well as unequal access to resources and talent necessary to innovate in the field of AI.
How do investments in AI impact multinationals?
Multinational corporations are exposed to increased geopolitical risks as they depend on international cooperation and regulations that can vary significantly from one country to another. This can influence their investment and technological development strategies.
What is the position of the United States and China in the race for generative AI?
The United States currently dominates the production of AI models, representing about 67% of notable models since 1950. China, while second, is making rapid progress, particularly thanks to its extensive access to data and significant investments in the AI sector.
Which intermediate countries are emerging on the AI scene?
Countries such as those in the European Union, the United Arab Emirates, and Saudi Arabia are positioning themselves as emerging powers by creating niches in the field of AI through strategic investments and developing technological infrastructure.
What infrastructures are essential to support generative AI?
Essential infrastructures include computing power, access to quality data, talent development in the field of AI, as well as adequate governance to frame the use of these technologies.
What is the importance of government funding in the AI sector?
Government funding plays a crucial role in the research and development of AI, especially as costs rise and commoditization sets in. It supports innovative projects and attracts talent.
What does BCG’s comparative analysis of national AI capabilities entail?
This analysis assesses the capabilities of each nation based on key parameters such as the development of language models, availability of financial resources, data infrastructure, and talent provision to determine the AI leaders on the global stage.
How do geopolitical tensions influence companies’ AI strategies?
Companies tend to diversify their AI supply chains to minimize risks associated with geopolitical tensions, seeking to establish partnerships in regions less likely to be affected by international conflicts.
