Generative AI is transforming global competition and geopolitics, presenting both challenges and opportunities for nations and businesses. Senior leaders from Boston Consulting Group (BCG) and its technology division, BCG X, recently engaged in discussions about the complexities of the AI race.
This race is particularly characterized by the dominance of superpowers like the US and China and the emerging roles of various middle powers, which carry significant implications for multinational corporations. Sylvain Duranton, Global Leader at BCG X, emphasized the substantial geopolitical risks businesses face.
He noted that nearly half of large companies operate on a global scale, making them susceptible to varying regulations and sovereignty issues that arise in different countries. Many organizations developed their AI teams before current global tensions escalated, creating vulnerabilities amidst a climate of uncertainty.
Furthermore, the discussion highlighted a stark disparity in AI investment across global regions. The US outpaces Europe, boasting a market capitalization that is 20 times larger, while also exceeding the Asia Pacific by a factor of five.
This inequity is mirrored in overall investment figures, showcasing a disproportionate distribution relative to the size of economies. The research led by Nikolaus Lang, Global Leader at the BCG Henderson Institute, sought to benchmark national generative AI capabilities based on various factors such as capital, computing power, and talent.
The analysis indicates that the US and China remain at the forefront of AI advancements, with the US maintaining a historical edge in producing notable AI models. In contrast, China is making impressive strides, particularly in data accessibility and AI patent applications.
As these superpowers dominate the landscape, several middle powers—such as those in the EU, Middle East, and Asia—are beginning to carve out significant niches. The dynamics of generative AI will continue to evolve, and companies must navigate the intersection of innovation and policy to mitigate risks in a rapidly changing geopolitical landscape.