French President Emmanuel Macron and Indian Prime Minister Narendra Modi at the Grand Palais during the Artificial Intelligence Action Summit, Paris on Tuesday February 12th 2025, (AP).
AI is no longer just a technology—it is an instrument of global power, shaping who leads in the coming decades. The recent AI Action Summit in Paris underscored a new reality: alliances are shifting, and AI governance is fracturing along new geopolitical lines. The fundamental question today is not just how AI should be governed, but by whom, and in whose interests.
The fragmentation of global AI governance reflects wider geopolitical shifts. While multilateral cooperation on AI remains an ambition, differing regulatory philosophies—exemplified by the U.S., China, and the European Union—have made comprehensive agreements difficult to achieve. Instead, "digital minilaterals"—small, agile alliances of countries sharing common AI governance principles—are emerging as a pragmatic alternative. These coalitions, such as the Global Partnership on AI (GPAI) and regional AI regulatory frameworks, enable states to coordinate policies, establish norms, and manage AI-related risks more efficiently than cumbersome global negotiations allow.
The AI Summit, which just concluded this week in Paris, highlighted the potential fault lines in this approach. The U.S. and U.K. notably abstained from signing the declaration on ‘inclusive’ AI that emphasized ethical and sustainable AI governance, while China, India, and France joined forces to endorse it. This divergence underscores broader shifts in global alliances, reflecting the ongoing restructuring of technological influence.
These developments come against the backdrop of renewed U.S. tariff threats, including the latest announced tariffs on steel and aluminium imports, impacting European and Asian economies. AI governance seems to be increasingly tied to economic and industrial policy, raising important questions about how Trump-era trade policies might push European nations to hedge their bets, reinforcing new forms of governance and cooperation that do not align with US interests.
The next phase of this realignment remains uncertain: will France, China, and India, along with other nations seek to formalize a regulatory bloc to counter U.S. dominance, potentially extending AI cooperation into economic and industrial policy?
The rapid evolution of AI technology itself is exacerbating geopolitical fractures and rivalry. The introduction of new models like DeepSeek, an open-source AI model designed for accessibility and efficiency at lower costs, is forcing governments to rethink regulatory strategies. While such innovations hold transformative potential, they also intensify concerns over data security, computational power allocation, and the strategic positioning of AI infrastructure.
DeepSeek’s lower-cost model and open-source framework could also accelerate the timeline for achieving Artificial General Intelligence (AGI), bringing AI capabilities once thought to be decades away much closer to reality. This raises fundamental questions about governance, accountability, and who will control the next generation of AI breakthroughs. The U.S.-China AI rivalry is no longer just about who has the best models, but about who defines the rules of the AI economy.
AI development is also a question of energy. AI models require vast computational resources, and their rising energy demands are now an urgent policy issue. Goldman Sachs forecasts a 165% rise in global data center power consumption by the end of the decade, signaling that AI dominance is also about securing reliable energy sources.
Who controls the energy sources and materials that power AI? The U.S. and Europe, are trying to challenge China’s dominance over lithium and rare earth minerals needed in the manufacturing of AI chips as well as in the batteries, wind turbines and PV panels needed to guarantee long term energy resilience and security, rendered even more critical by AI’s energy needs. Some governments are now prioritising strategic energy planning to support AI capabilities while mitigating sustainability risks. The UK, for example, is debating zonal electricity pricing to encourage AI data centres to relocate to regions with abundant renewable energy. In this era of technological acceleration, access to sustainable and scalable energy sources will shape nations’ AI competitiveness.
The AI Action Summit in Paris made clear that AI is no longer just a technological issue—it is a structural force reshaping economic and political realities. As articulated this week in Paris, the challenge ahead is determining who will define AI’s future rules and how these frameworks will balance innovation, security, and democratic values.
AI is now a core element of global power competition. The rise of new alliances, the geopolitical impact of disruptive AI models, and the infrastructural demands of AI development are shaping a new global order. Policy and business leaders must not only anticipate these changes but actively shape them. This requires strategic investments in AI infrastructure, regulatory responses, and adaptive partnerships.
AI’s geopolitical order is taking shape, but it is not yet fixed. Nations that invest in AI infrastructure, secure energy security, and build strategic alliances will define the digital future. The time to act is now.
