How Artificial Intelligence is Shaping Global Power Balances and the Supply Chain
The global supply chain of artificial intelligence technology creates a complex network of geopolitical interdependence distributed across multiple countries in the chip, data, energy, and software layers.
The chip, data, and energy ecosystem behind artificial intelligence models is reshaping global power balances by establishing a mutual interdependence network among countries such as the United States, China, Taiwan, the Netherlands, Japan, and South Korea.
The Layered Ecosystem of Artificial Intelligence
Artificial intelligence systems are built upon a layered structure encompassing models, data, computing power, chip manufacturing, data centers, and energy requirements.
No single country can control all of these layers on its own, which causes critical capabilities to be concentrated in different regions across the world.
Global Distribution in Chip Manufacturing
On the hardware side, US-based companies design leading AI chips, while the manufacturing process is dominated by Taiwan Semiconductor Manufacturing Company (TSMC).
TSMC, in turn, establishes a global manufacturing chain by sourcing lithography machines from the Netherlands, pure chemicals from Japan, and memory components from South Korea.
Geopolitical Restrictions and Their Impacts
Restrictions imposed by governments on access to these technologies drive competitor countries to accelerate their own innovation processes and increase efficiency.
Measures such as export controls on advanced chips implemented by the US against China can trigger unexpected technological moves within the global technology structure.
Data Centers and Energy Needs
The massive data centers required to run generative artificial intelligence models necessitate huge energy and infrastructure investments.
While the US stands out in private investments and leading models, China holds a leading position in electricity generation, robotics, research outputs, and manufacturing capacity.