AI Revolutionizes Geopolitics: A New Era of Global Politics

AI has opened a new geopolitics, according to Abishur Prakash, founder of The Geopolitical Business. As AI technology advances, it is expected to have significant geopolitical implications, including shifting power dynamics and changing relationships between nations. The author of "Go.AI" argues that AI has the potential to reshape the global order and create new opportunities and challenges for countries and businesses.

The advent of artificial intelligence (AI) has ushered in a new era of geopolitical shifts, transforming the landscape of power dynamics and international relations. According to Abishur Prakash, founder of The Geopolitical Business, AI technology is expected to have profound implications for nations and businesses alike [1]. As AI continues to advance, its potential to reshape the global order is becoming increasingly evident.

One of the most significant geopolitical impacts of AI can be seen in the ongoing rivalry between the United States and China. In 2025, the resumption of Nvidia's H20 AI chip sales to China, following a six-month export ban, highlights the complex interplay between geopolitical tensions and market opportunities [2]. The H20's re-entry has reignited debates among investors about the company's ability to balance geopolitical risks with the rewards of the world's fastest-growing AI economy.

The regulatory environment in China remains fraught, with authorities scrutinizing Nvidia over alleged "backdoors" in the H20 chips. This regulatory scrutiny underscores a broader push for self-reliance in AI infrastructure, as seen in Beijing's 2023 cybersecurity review of Micron Technology [2]. The message to Nvidia is clear: its presence in China is contingent on navigating a dual challenge of U.S. export restrictions and domestic regulatory skepticism.

The financial implications of Nvidia's re-entry into China are significant. The H20's temporary absence created a vacuum that Chinese firms exploited, capturing market share with homegrown alternatives. However, the resumption of H20 sales has injected optimism, with analysts projecting $19.5 billion in 2026 revenue from China, driven by pent-up demand and pre-ban orders from major Chinese tech companies [2].

The competitive landscape in China's AI chip market is rapidly evolving. While Nvidia's CUDA software stack remains a key differentiator, Chinese firms like Huawei and Cambricon have surged, capturing market share with homegrown alternatives. The U.S. export restrictions have forced Chinese firms to innovate rapidly, with Huawei investing $25 billion annually in R&D to close the gap [2].

The geopolitical implications of AI are not limited to the U.S.-China rivalry. The revelation of DeepSeek's R1 AI tool, which rivals the latest version of ChatGPT but at a fraction of the cost, has shattered the myth of American AI supremacy [3]. This development underscores the shifting power dynamics in the global AI ecosystem, with China rising as a major player.

For investors, navigating the volatility of geopolitics while capitalizing on the inexorable march of AI innovation presents a unique challenge. Nvidia's story in China is a microcosm of this broader dynamic. The company's ability to leverage its CUDA software advantage and existing customer relationships offers a path to recovery, but the rise of Chinese AI chipmakers and the shifting geopolitical landscape mean that investors must weigh the potential for $20 billion in 2026 revenue against the possibility of a prolonged decline in market share [2].

In conclusion, AI has opened a new geopolitics, reshaping power dynamics and creating new opportunities and challenges for countries and businesses. As we look ahead, the key for investors will be to navigate the volatility of geopolitics while capitalizing on the transformative potential of AI.

References:
[1] https://asia.nikkei.com/opinion/ai-has-opened-the-door-to-a-new-geopolitics
[2] https://www.ainvest.com/news/nvidia-tenuous-entry-china-balancing-geopolitical-risk-ai-market-opportunity-2508/
[3] https://www.phillyvoice.com/ai-power-shift-trade-war-reshape-global-economy-investment-personal-finance-bryn-mawr-trust-0599988/