Experts warn global AI race could reshape economic and military power

Artificial intelligence is no longer a niche technology race. It is rapidly becoming a core determinant of which countries gain economic weight and military leverage over the next decade.

Experts now describe AI as national infrastructure, arguing that whoever controls the most capable systems and chips will shape global trade, energy flows, cyber power and even how wars are fought.

From code to core infrastructure

Strategists increasingly frame AI as a foundation of state power, not a gadget for tech firms. One analysis bluntly states that artificial intelligence is no longer a tool but national infrastructure that touches finance, healthcare, logistics, education, cybersecurity and manufacturing across borders.

This shift helps explain why the intensifying contest between the United States and China is increasingly described as an AI arms race that could reset the global balance of power.

Research on AI rivalries finds that the competition between China and the United States is already altering the global power structure and forcing smaller states to rethink alliances, industrial policy and security guarantees.

Economic stakes: growth, chips and energy

On the economic front, AI is driving a surge in capital spending on processing equipment and software, which one investment analysis treats as a proxy for overall AI investment. That report projects that over the next two years this wave of spending will reshape productivity growth and deepen the AI race, especially in China.

At the elite gathering in Davos earlier this year, one commentator argued that deregulation in the United States had helped push its economy to expand faster than China’s, with AI at the center of that acceleration. The same analysis warned that the most consequential shift was not simply faster growth but a widening gap between countries that can deploy AI at scale and those that cannot.

Energy markets are already feeling the impact. A recent market report linked a 14 percent sector gain to what it called Energy’s 2026 Surge, driven by AI’s Race to Power and Geopolitical Tension Drive. The author described data center buildouts, power grid upgrades and chip fabrication plants as the primary engine behind this surge, turning once-stable utilities into high-growth bets.

Middle powers are scrambling to adapt. Policy experts caution that states which fail to secure influence over AI development, deployment and governance risk permanent subordination in global value chains. That warning is particularly pointed for export-driven economies that depend on advanced manufacturing and services.

Countries such as India are trying to position themselves as alternative hubs for AI talent and infrastructure, betting that demographic scale and software expertise can offset late entry in chips and cloud capacity.

Geopolitics: alliances and open source gambits

Analysts tracking AI and geopolitics argue that rapid AI development has produced what they call a fragile equilibrium between leading powers. One influential assessment notes that the result is a fragile, contested and unevenly distributed AI order that is neither secure, equitable nor universally engaged, and warns that the coming year will test whether cooperation can catch up with competition.

Within that fragile order, China is expected to double down on an open source AI strategy to influence global infrastructure. According to that same analysis, Beijing sees open models and toolchains as a way to shape standards, embed its technology in foreign systems and blunt efforts to wall off its firms from advanced chips.

Another strand of research describes how China and the United States are using AI partnerships, export controls and standards bodies as levers of statecraft. Smaller countries are being pulled into competing ecosystems of cloud providers, chip suppliers and data rules, a dynamic that resembles earlier eras of telecom and nuclear competition but with far more diffuse civilian uses.

Middle powers are not passive. A recent policy paper argues that middle states can still shape AI governance if they coordinate on procurement rules, safety benchmarks and cross-border data norms. Without that coordination, the paper warns, they risk becoming mere rule takers in a world defined by two AI superpowers.

AI on the battlefield

Security experts are increasingly blunt about the military implications. One Canadian-focused broadcast framed the shift starkly, saying experts warn that we have moved from AI that talks to AI that ACTS, with autonomous AI Agents now executing hacks and probing critical infrastructure in ways that could rival the impact of a traditional attack.

A separate video report on targeting systems described what one critic called an unprecedented and unlawful acceleration in AI-driven military targeting, linked to a high-stakes battle between an AI firm and the United States military over the use of such systems in live operations and domestic surveillance.

Concerns are not limited to Western programs. An Instagram analysis that drew significant attention stated that Analysts are warning that China is making rapid progress in developing autonomous military systems, with 46 separate test platforms reportedly experimenting with AI that can make real-time combat decisions.

Strategists worry that as more countries deploy AI-assisted command systems, the risk of miscalculation or accidental escalation will rise. Automated decision support can compress reaction times and flood commanders with synthetic intelligence, which may encourage faster moves in crises and leave less room for diplomacy.

Cyber conflict and AI agents

Cybersecurity specialists are already seeing AI reshape digital risk. A global outlook on cyber trends describes how AI is accelerating both offense and defense, and labels one section 3.1 AI is reshaping risk, accelerating both offence and defence. Together with the spread of generative and agentic systems, the report highlights the dual-use nature of AI, which can harden networks and simultaneously empower attackers.

That duality is visible in the rapid rise of autonomous agents that can scan, exploit and pivot across networks with minimal human supervision. The Canadian broadcast on sovereignty warned that AI Agents are now capable of executing hacks, rewriting code and probing industrial systems, raising the prospect of automated campaigns that move faster than traditional defenders can respond.

Some governments are investing in AI for defensive cyber operations, training models to detect anomalies, synthesize threat intelligence and simulate attack paths. Others are experimenting with offensive AI that can identify zero-day vulnerabilities and generate custom malware, a trend that alarms regulators and civil society groups.

Societal pressure and governance gaps

Public anxiety is rising alongside these technical shifts. A widely shared Instagram reel argued that artificial intelligence is rapidly becoming one of the most important drivers of global power and claimed that the most important global arms race right now is not nuclear, it is artificial intelligence.

Think tank analysts echo that sentiment, warning that the current AI race between China and the United States is transforming the future of international relations faster than institutions can adapt. One research note stresses that this transformative power is already pushing smaller states to choose sides on data flows, supply chains and security cooperation.

Yet global governance remains patchy. The same geopolitical assessment that described a fragile AI order also pointed to a gap between the speed of deployment and the maturity of safety rules. It called for a more secure, equitable and universally engaged approach but acknowledged that commercial and strategic incentives still point toward rapid scaling.

At the corporate level, chipmakers and cloud providers are racing to meet demand. A recent report on semiconductor valuations highlighted how one leading AI chip firm was poised to reach a 5 trillion dollar market value, a figure that illustrates how central AI hardware has become to market expectations and state industrial strategies.

What comes next

Experts broadly agree on three trajectories. First, AI will entrench itself as economic infrastructure, rewarding countries that can combine data, talent and energy into competitive ecosystems. Second, military organizations will continue to experiment with autonomous and semi autonomous systems, from targeting to cyber operations, even as legal and ethical debates intensify.

Third, the rivalry between the United States and China will keep radiating outward, forcing middle powers, from Europe to Asia, to decide how deeply to integrate with each camp’s technology stack. Whether that rivalry produces a more fragmented digital world or a negotiated framework for shared safety standards remains unresolved and, based on available sources, unverified.

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*This article was developed with AI-powered tools and has been carefully reviewed by our editors.