Geopolitical

Artificial intelligence is increasingly being treated not simply as a technology sector but as a strategic capability tied to economic power, national security and geopolitical competition. Recent warnings from leading AI researchers and executives that increasingly autonomous systems could pose extreme risks have intensified debate over whether development should be slowed.

Yet the same warnings could make a slowdown less likely. If advanced AI can provide major military, economic and technological advantages, governments may view continued development as a strategic necessity. The result could be a paradox in which growing concerns about the dangers of AI encourage countries to accelerate the race to control it.

The United States and China are at the center of this competition. Both governments have strong incentives to maintain their technological advantage, while companies are investing enormous sums in data centers, chips and computing infrastructure.

The scale of investment shows why reversing course would be difficult. Goldman Sachs estimates that cumulative global AI spending through the end of the decade could reach as much as 5% of global GDP. At the same time, financial markets are increasingly sensitive to whether the extraordinary investment in AI infrastructure will ultimately generate sufficient economic returns.

Why it matters

The central question is no longer simply whether AI development should be regulated. It is whether governments can realistically agree to meaningful limits while competing for technological dominance.

A country that slows development unilaterally risks allowing competitors to move ahead. That creates a classic security dilemma: measures intended to reduce risk can themselves create strategic vulnerability.

The problem is particularly significant because AI has applications far beyond commercial technology. Advanced systems could affect cybersecurity, intelligence, military planning, financial markets, biotechnology and critical infrastructure.

That makes AI different from many previous technology debates. Governments may be willing to regulate individual applications, but they are less likely to accept restrictions that could permanently reduce their strategic advantage.

The investment dilemma

The AI boom has already become deeply connected to wider economic growth.

Companies are spending heavily on computing capacity and data centers, while investors have placed enormous valuations on firms expected to benefit from AI adoption. A significant slowdown could therefore have consequences far beyond technology companies.

Morgan Stanley has estimated that almost $200 billion in U.S. data center projects were cancelled or delayed amid political resistance to new infrastructure. The bank has also argued that capital expenditure linked to AI could account for roughly one third of U.S. GDP growth over the current period.

This creates another obstacle to restraint. AI investment is no longer only a corporate decision. It has become connected to employment, infrastructure, financial markets and national economic growth.

The longer the investment cycle continues, the more difficult it becomes for governments and companies to voluntarily step away from it.

Washington and Beijing

The geopolitical dimension makes a coordinated slowdown even harder.

U.S. policymakers increasingly view technological leadership in AI as an element of national power. China, meanwhile, sees AI development as part of its broader effort to reduce dependence on Western technology and strengthen its own economic and strategic capabilities.

That means Washington and Beijing have incentives to monitor each other’s progress rather than simply establish limits.

The political rhetoric surrounding AI increasingly reflects this competition. Trump has portrayed opposition to AI infrastructure as benefiting China, while Chinese state media has described warnings about AI as part of a broader geopolitical strategy against Beijing.

The result is a familiar strategic dilemma: if either side believes the other may continue developing advanced AI, neither has much incentive to slow down first.

Can international rules work?

Meaningful AI restrictions would ultimately require international cooperation.

Individual countries can establish domestic safety standards, require companies to conduct risk assessments or impose restrictions on specific applications. But those measures cannot fully address the geopolitical problem if competitors outside those jurisdictions remain free to develop more powerful systems.

The nuclear comparison illustrates the difficulty. The first nuclear weapon was developed in 1945, but the Nuclear Non-Proliferation Treaty did not emerge until 1968. Even after the treaty, nuclear proliferation continued beyond the five states formally recognized as nuclear-weapon states.

AI could present an even more complicated challenge because it is not confined to a small number of military facilities. Its development involves thousands of companies, researchers, data centers and computing systems spread across multiple countries.

Economic security could become the new arms race

The most important shift may be that AI competition does not need to resemble a conventional military arms race to produce similar strategic pressures.

Advanced AI could generate advantages in productivity, financial markets, scientific research, cybersecurity and military technology. Falling behind could therefore be perceived as an economic and national security threat even without the development of an explicit weapon.

This could produce what might be described as mutually assured economic dependence. Countries may recognize the dangers of uncontrolled AI while simultaneously believing that abandoning the technology would be even more dangerous.

That dynamic makes voluntary restraint increasingly difficult.

Implications and analysis

The growing warnings about AI may therefore have an unintended geopolitical consequence: they could accelerate the race they are intended to constrain.

If governments become convinced that highly capable AI could fundamentally alter national power, they are unlikely to leave its development to private companies or accept restrictions that allow competitors to gain an advantage. Instead, the technology could become more closely integrated with national security policy.

That could eventually mean greater government involvement in AI companies, computing infrastructure, semiconductor supply chains and access to advanced models.

The biggest danger is therefore not simply that AI becomes too powerful to control technologically. It may become too strategically important for governments to willingly slow down.

For meaningful safeguards to emerge, major powers would need to treat AI safety as a shared security interest rather than another arena of geopolitical competition. Without that shift, every warning about the potential consequences of advanced AI could strengthen the argument for moving faster.

The paradox is clear: the more dangerous AI becomes, the more governments may feel they need to control it. And the more they compete to control it, the harder it becomes to slow the race.

With information from Reuters.

Bishkek, Kyrgyzstan –  It was a round table of some of the most influential men in the world. Representing Russia, China, India, Iran, Pakistan – and when they extended to the Shanghai Cooperation Organisation Plus – Turkiye, as well as the United Nations Secretary-General, Antonio Guterres. Gathered here in Kyrgyzstan were countries at the centre of some of the world’s biggest geopolitical tensions.

What brings them together is not necessarily agreement on everything. It is the space to pursue their interests outside a Western-led framework. Moscow sees that space as evidence of a changing world.

“Over the 25 years since its inception, the Shanghai Cooperation Organisation has evolved into one of the independent and influential centres of the emerging multipolar world,” Russian President Vladimir Putin told the summit.

The organisation, he said, had grown from six founding members in 2001 into what he described as the world’s largest regional association.

Kyrgyzstan is a small, mountainous, landlocked country with Russia to the north and China next door. The calculation is more immediate: how do you balance between giants?

As Europe and the United States are increasingly looking towards Central Asia, Kyrgyzstan needs to balance relations with all of them.

Shairbek Dzhuraev, president of the Crossroads Central Asia think tank, said the timing of the summit is particularly important.

“The members in the room are precisely heavyweights that are directly involved in key geopolitical conflicts of the day,” he said.

That balancing act is not new. Since independence in 1991, Central Asian states have largely operated through what is known as a multi-vector foreign policy.

Bishkek – like other Central Asian nations – operates by keeping Russia close and building ties with China, while keeping open doors to Europe and maintaining healthy relations with Washington.

For Kyrgyzstan, it is less about choosing sides than keeping options open, underscored by its geography. Being landlocked means dependence on transport corridors and being mountainous makes infrastructure more difficult. Dependence on imported energy and external markets leaves the economy exposed to shocks beyond its borders.

“The biggest weakness of Kyrgyzstan, geopolitically and geographically, is the dependence in terms of transport routes, in terms of energy, in terms of economic relationships”, Dzhuraev puts it bluntly.

So diversification becomes more than an economic ambition. Kyrgyzstan, being one of the smaller members, cannot dictate the SCO’s agenda. But it helped to shape the language.

For decades, Central Asia was viewed largely through the prism of the powers surrounding it. But the wars in the region and beyond have changed that – Russia is under sanctions, so is Iran, China is looking west, Europe is looking east. Suddenly the geography has acquired new value with highways, railways, pipelines, trade corridors, power networks and the periphery is becoming a strategically important passageway. Dzhuraev said: “Kyrgyzstan wanted the summit declaration to recognise that transformation, Central Asia’s movement into the centre stage of international politics”.

The Shanghai Cooperation Organisation is increasingly seen as a counterweight to US influence — a grouping through which China and Russia can advance a different vision of the global order. But the SCO is too diverse for a simple East-versus-West confrontation. That description comes with a qualification that the SCO is not a unified anti-American bloc.

Its members have competing interests, different relationships with Washington and, in some cases, deep disagreements with one another. The question is not whether the SCO rejects the West, it is whether it can resist being defined entirely in opposition to it.

Iran brings that to the centre stage – where geopolitical theory meets a much more immediate crisis. Tehran and Washington have returned to confrontation after more than a month of relative calm. Iranian President Masoud Pezeshkian used the SCO summit to put the diplomatic question directly on the table.

“I state explicitly that if the United States returns to its commitments under the aforementioned memorandum of understanding, the Islamic Republic of Iran will immediately take reciprocal action,” he said.

The Islamabad MoU signed in June collapsed, with Tehran and Washington blaming each other for violating its terms. Iran’s Foreign Minister, Abbas Araghchi, also called on Washington to return to what its president signed under the MoU. “In that case, everything can be put back on the right track,” he said.

For the SCO, however, Iran is not simply a diplomatic issue – it is an economic one. Washington has renewed sanctions on Tehran and expanded the threat of penalties for those doing business with Iran. For Central Asia, that matters, particularly for countries whose economies are deeply intertwined with Russia and increasingly connected to Chinese trade networks. Dzhuraev is sceptical whether countries such as Kyrgyzstan comply fully with sanctions, “The declaration will most likely not match the reality,” he said. “China and other countries have already rejected what they describe as unilateral sanctions.”

The reality is that sanctions can hurt, as they have hurt Iran and Russia. Not as intended for economic collapse, but they brought pain for the masses and put a spanner in their economies. But enforcement across a region built around cross-border trade is another matter. For Central Asian economies, complete compliance is difficult because the economic relationships are too dense, which is quite different from Western compliance. Both with Iran and Russia, transport and trade links have been growing steadily, so countries are unlikely to simply switch them off overnight.

That makes the SCO summit an important political moment.

Not necessarily because its members can defeat the sanctions regime, but because they can collectively signal where they stand on unilateral pressure.

When you speak to delegates from the global south, there is also a broader message: that the SCO is becoming a forum where countries that do not necessarily agree on everything can nevertheless agree on one principle: they want room to manoeuvre.

Putin calls that the emergence of a multipolar world,  Pezeshkian is using the forum to keep diplomacy with Washington alive on Iran’s terms,  China is defending its economic relationships, India is pursuing its own strategic interests, and Kyrgyzstan is trying to make sure none of these relationships closes the door to another.

But there is a second question confronting Kyrgyzstan — and it is not sitting around the summit table. How much of its rise belongs to Kyrgyzstan itself?

As transit trade has risen, the economy has been growing rapidly, wages have increased, construction has accelerated and exports have increased.

There is visible momentum in Bishkek, with new roads and buildings appearing to fill the empty spaces. Extraordinary circumstances have generated a lot, such as the war in Ukraine, which has altered regional trade and expanded Chinese investment. When trade routes shifted, money and demand moved across borders. The government is proud that much of the recent development has been undertaken without the external borrowing that characterised earlier periods. But buildings alone do not create a productive economy. External momentum can be a dangerous foundation for long-term growth, as Dzhuraev points out. “Productivity is growing. Exports are rising. More goods are being produced domestically. But much of the momentum remains connected to external factors — particularly the Russia-Ukraine war and Chinese investment. One of the biggest drivers of poverty reduction has been rising salaries.”

The harder question is what comes next? Where are the productive sectors that will sustain those incomes? Agriculture could be an obvious answer as Kyrgyzstan is an agricultural country. But glaciers are melting and climate change is having an impact. Plus, its long-term capacity to generate higher-value growth remains uncertain. That may ultimately be the more important story behind this summit. Not the speeches, the flags, nor the declaration.

Kyrgyzstan wants to convert geography into leverage and its vulnerabilities into options. But the wider questions remain, whether Central Asia can move from being the space between Russia, China, Iran and Europe to becoming a centre of its own? As well as whether today’s economic growth can survive when the external forces driving it inevitably change?

Kyrgyzstan finds itself at the centre of a changing region that brings opportunity but also pressure. Between the giants, keeping every door open may be the most important strategy of all.