Artificial intelligence (AI) has morphed into a strategic asset whose evolution impacts diverse areas such as economic growth, warfare and national security, climate change, transportation, healthcare, and the labor force. Economy, politics, geopolitics and technology have become so intertwined that one can talk about the Tech Cold War or Cold War 2.0, an age-defining phenomenon. 

In early September 2017, Russian President Vladimir Putin brought AI from the lands of Silicon Valley, academia, and the basement of the Pentagon to the forefront of international politics. 

"AI is the future, not only for Russia but for all humankind", said Putin. "It comes with colossal opportunities, but also threats that are difficult to predict. Whoever becomes the leader in this sphere will become the world's ruler".

We are entering a new world order. This new order is marked by increased nationalism and greater geopolitical competition. While countries will not undo all the global economic systems that took shape under American unipolarity for the past three decades, specific critical sectors will become decoupled in a process we have previously called "re-globalization."

Most importantly, the technology ecosystem will be divided into two spheres dictated by the world's economic powerhouses, the US and China. Other states must decide which sphere they want to be a part of, putting pressure on the US and China to outpace the other and establish their technological dominance. Thus, unraveling in front of the world is a heightened form of economic competition we understand as the "Digital Cold War".

Digital Cold War and AI nationalism

"I first heard the Cyber Cold War concept applied to the Internet in the aftermath of the Dubai World Conference on International Telecommunications (WCIT, 2012), writes Milton Mueller. 

According to this concept, the world's nations seemed to split in half over the future of Internet governance. One writer called it the "Internet's Yalta". The concept gained momentum with the February 2013 release of a report attributing systemic cyber-espionage to a unit of the Chinese Peoples' Liberation Army. 

According to Ian Hogarth, Machine learning is an omni-use technology that will touch all sectors and parts of society. The transformation of both the economy and the military by machine learning will create instability at the national and international levels, forcing governments to act.

AI policy will become the most critical area of government policy. An accelerated arms race will emerge between crucial countries, and we will see increased protectionist state action to support national champions, block takeovers by foreign firms and attract talent. This arms race leads to the emergence of AI nationalism.

The arms race will potentially speed up AI development and shorten the timescale for getting to AGI. Although there will be many common aspects to this techno-nationalist agenda, there will also be critical state-specific policies. There is a difference between predicting that something will happen and believing this is a good thing. Nationalism is a dangerous path, particularly when the international order and norms will be in flux.

Technology and the Balance of Power

Emerging technologies primarily shape the balance through military and economic means. Technologies can directly influence countries' abilities to fight and win wars. They can also indirectly affect the balance of power by impacting a country's economic power. After all, countries cannot maintain military superiority over the medium to long term without an underlying economic basis for that power. 

However, it is not yet clear how the invention of specific AI applications will translate into military power. Despite continuing investment efforts, efforts to integrate AI technologies in militaries have been limited. Project Maven is the first activity of an "Algorithmic Warfare" unit in the US military designed to harness the potential of AI and translate it into usable military capabilities. Still, many investments in the US and elsewhere are in the early stages.

According to Missy L Cummings, autonomous ground vehicles such as tanks and transport vehicles, as are autonomous underwater vehicles, are developing worldwide. In almost all cases, however, the agencies developing these technologies struggle to leap from development to operational implementation. 

A need for collaboration

When it comes to AI — arguably the most decisive technology in this global contestation — we are heading toward two hermetically sealed ecosystems: one that supports open systems but is also associated with democracy, privacy, and individual rights versus one that supports state control, information-flow restriction, and politically imposed limits on openness.

For a future to prevail that prizes openness and individual rights, democratic nations need to be market leaders in AI. The only way to ensure this is by promoting international collaboration, especially between democracies and other defenders of the rules-based order.

In this era of nationalism and nations trying to be superpower, for AI to thrive in its ability to help us solve our most complex problems, we have to unlock the world's capacity — from French nuclear scientists to Korean philosophers, from Indian researchers to Kenyan artists, and indeed to Chinese researchers who choose to leave China and work and live in the West. Plus, the capital requirements for investments in the sector are so large that very few national markets are big enough to succeed with AI on their own.

At the center of this all, a disjointed approach with various patchworks of regulatory frameworks will harm any ability to compete and win against hostile AI systems. Furthermore, AI is becoming an integral part of the global infrastructure. According to the Harvard Business Review, the West must act swiftly and in a unified fashion to ensure the technology remains open and democratically controlled.

To develop the most powerful AI models across sectors, the United States will need to collaborate with other allied countries — to name a few, India, Singapore, Japan, South Korea, and European nations — by adopting data-sharing policies and encouraging the co-creation of technological innovations. The European Data Governance Act, approved by the EU in 2022, is a good learning tool that facilitates data-sharing across member countries to maximize benefits for citizens and businesses.

Innovation for transformation

While most of the current AI discourse focuses on large language models and other generative capabilities, AI's most significant long-term impacts will come from how it transforms industries and society. Already, we are seeing AI's transformative potential beginning to take shape. AI can massively level the playing field for those with access to information and insights.

We are at a fork in the road when it comes to AI. We can go down the path that leads to automation and destruction, replacing human work and meaning, or we can go down the path that leads to copiloting and enablement, making us more productive, helping us live more balanced lives, and becoming more excellent masters of our craft. Unlike the social media revolution, which, if regulators wanted to, they could have slowed or redirected, the AI revolution can only charge forward. Unlike previous platform revolutions, this is a technological revolution, and stakeholders across society have already picked up its mantle.

The most successful companies will embrace this forward-looking vision and build to endure by centering a core set of values that align with society and abide by self-regulatory mechanisms. 

Sources:

• Harvard Business Review
• Ian Hogarth Blog
• Milton Mueller, ‘Are we in a Digital Cold War’, Presented at the GigaNet workshop The Global Governance of the Internet: Intergovernmentalism, Multistakeholderism and Networks, Graduate Institute, Geneva, Switzerland.
• Is There an AI Cold War? By Joanna J. Bryson, Helena Malikova
• Artificial Intelligence: The New Tool for Cyber Diplomacy by Alina Bârgăoanu & 
• Bianca-Florentina Cheregi