The geoeconomic stakes and challenges of artificial intelligence
Nadia ANTONIN
Power factors have changed in the contemporary period. Recent examples of power politics reveal that economic means have become essential in the exercise of power by states. This paradigm shift is summarised by the term “geo-economics”. Economic interests take precedence over political interests.
While in classical geopolitical analysis, it was in the territory and military means that the State found the basis of its sovereignty, geoeconomics assumes that power and security are not only linked to the physical control of the territory. Today, the objective is to acquire or maintain a dominant economic position on the international scene, in particular by mastering innovation. This is the thesis defended by the economist and historian Edward Luttak. In the early 1990s, this economist analysed how the decline in the importance of military power led to a shift from geopolitics to geoeconomics, “States and economic entities replacing the armed forces as the main actors (“From Geopolitics to Geo-economics. Logics of Conflict, Grammar of Commerce”, The National Interest, Summer 1990).
Among the new instruments of economic and geopolitical power, artificial intelligence is today a major lever, an instrument of strategic competition and a factor in the reconfiguration of global industrial power relations in the same way as energy, finance or armaments.
Analysis of the geoeconomics concept
For Professor Antto Vihma, geoeconomics “consists […] in shaping and managing the strategic environment in which states operate for the pursuit of their national interests by economic means“ (2018).
The concept of “geoeconomics” was developed in the United States by Edward Luttwak and in France by the political scientist Pascal Lorot, who created the journal Géoéconomie in 1997. It covers the study of the relationship between the economy and the political geography of a territory. A branch of geopolitics, geoeconomics is at the crossroads of economics and international relations.
Luttwak (1990) highlighted geoeconomics as “a modern form of rivalry between international powers for which the role of the State and its financial capacities constitute the foundations of diplomacy and the “economic” deployment of nations“. As for Lorot (1999), he sees in geoeconomics “an instrument for analysing the economic and commercial strategies determined by the policies and diplomacy of national governments seeking the reciprocal international influence of these national enterprises and the State“.
Block strategy for a dominant position
A global struggle for artificial intelligence has entered the international arena. In other words, as artificial intelligence has become a major geoeconomic issue, the major powers of the United States, China and the European Union (EU) are engaged in a technological and economic race to carve out the lion’s share. Each is seeking to master the technologies, infrastructures and standards that will shape the economy of the 21st century.
AI is redefining the global hierarchy: the United States dominates through innovation, China through state strategy, and the European Union through standards.
– At present, only the USA holds a monopoly on AI and has managed to rise to the rank of leader in the AI race, despite China’s rise in this field. China is the main rival of the United States. The US’s supremacy in AI innovation is based on three pillars: 1) academic excellence: 2) Silicon Valley, which remains the heart of the technology and innovation industry; 3) significant public and private funding.
– China is accelerating the integration of AI in all sectors. In addition, a major revision of the Chinese cybersecurity law (October 2025) reflects the state’s desire to technically and ethically regulate the meteoric growth of artificial intelligence in various applications. By updating its legislative framework, China is seeking not only to assert itself on the world stage as a leader in cybersecurity, but also to better manage the risks associated with AI and infrastructure.
- The European Union has chosen the standard as a strategic and competitive weapon in order to impose its vision and conquer new markets. Wanting to become a pioneer in “a field that fascinates as much as it worries“, the European Union has taken the lead over the USA or China, to regulate AI. Thus, on 14 June 2023, the European Parliament largely approved the draft regulation on artificial intelligence, the Artificial Intelligence Act, which entered into force in 2025.
The geoeconomic challenges of artificial intelligence
The deployment of AI raises geoeconomic issues, particularly in terms of resources, ethics, employment and regulation.
- Artificial intelligence depends on three essential resources: data (“new black gold”), semiconductors and computing power. The battle for these resources is at the heart of current geoeconomic tensions.
- In addition, given the biased algorithms, the discrimination that AI can generate, security issues and data protection, etc., the adoption of this technology raises ethical questions. The AI economy must be based on trust.
- The rise of artificial intelligence is profoundly transforming global geoeconomic balances, in particular through its effects on employment. Three major issues can be identified: 1) first, global competition for talent is intensifying; 2) second, AI is causing a recomposition of global value chains; 3) finally, AI is destroying intermediate jobs, while promoting the creation of highly skilled jobs, requiring a set of advanced technical and cognitive skills.
- With regard to regulation and digital sovereignty, countries are seeking to regulate AI to protect their economic interests and values.
In conclusion, the countries that succeed in innovating quickly, while ethically and legally regulating the uses of AI and preserving their technological sovereignty, will be the big winners of the AI revolution.