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The New Cold War of Artificial Intelligence: Economic Power and Geopolitical Games in the Age of AI

Iakovos ( Jack ) Archontakis
Senior Maritime Strategy Consultant & Chartering Executive

Commercial Director

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Introduction

The 21st century is witnessing a radical shift in global power dynamics—not through military conquests or natural resources, but through algorithms, data, and computing power. Artificial Intelligence (AI) has emerged not only as a revolutionary technological advancement but also as the new battleground for global influence and economic dominance.

The race to control AI capabilities is transforming into a "new Cold War" between superpowers like the United States and China, with the European Union seeking relevance and smaller nations navigating their place in this shifting landscape. This article explores how the AI arms race is reshaping geopolitics, markets, and strategic alliances. 

1. The Rise of AI as a Geopolitical Tool

Artificial Intelligence is no longer confined to the tech industry. Its integration into defense systems, supply chain logistics, energy grids, healthcare, and surveillance has elevated it to a matter of national security. Governments now view AI as a means to enhance their economic output, safeguard their sovereignty, and project influence internationally.

AI technologies—particularly in language models, predictive analytics, and autonomous systems—are seen as force multipliers. Whoever leads in AI will likely lead the next wave of global innovation and influence.

2. US vs China: The Technological Tug of War

The United States and China are at the forefront of the AI race, each pursuing dominance through different strategies: 

The US focuses on private sector innovation, venture capital, and alliances with democratic nations. Sanctions on China regarding semiconductor technology and access to high-end chips (like those from Nvidia and AMD) are a key part of its containment strategy. 

China, on the other hand, combines state-led industrial policy with rapid implementation. Through companies like Huawei, Baidu, and sensetime, it aims for self-reliance in AI chips and software. The Belt and Road Initiative also exports Chinese AI surveillance systems to developing nations.

This is not just technological rivalry—it’s a battle of ideologies: open vs. Authoritarian models of AI governance.

3. Europe’s Strategic Dilemma: Player or Spectator?

The European Union has strong AI research capabilities and regulatory clout (e.g., the AI Act), but lags behind in hardware manufacturing and tech entrepreneurship compared to the US and China.

While the EU seeks to develop “ethical AI” and maintain digital sovereignty, its fragmented market and bureaucratic inertia hinder its competitiveness. Yet, its ability to set global standards—just as it did with GDPR—could still allow it to punch above its technological weight. 

4. The Economic Stakes: Chips, Data, and Innovation

Control over AI is increasingly defined by three critical assets:

Semiconductors (especially advanced gpus and asics)

Data (the raw material of AI)

Computing infrastructure (cloud platforms, data centers)

The shortage of chips, trade restrictions, and the global scramble for rare earth elements (used in chip production) make this a high-stakes game. Countries are offering massive subsidies to lure chipmakers and invest in local production.

Innovation ecosystems are also flourishing around AI applications—in biotech, finance, autonomous vehicles, and more—generating billions in potential value.

5. The Role of Big Tech: Nvidia, Huawei, TSMC & Co.

Some of today’s most powerful “admirals” aren’t politicians — they’re CEO's.

The private sector is driving much of the AI revolution, with tech giants playing pivotal roles: 

Nvidia has become a strategic asset, powering everything from chatgpt to military drones with its gpus.

TSMC (Taiwan Semiconductor Manufacturing Company) is a linchpin of global chip manufacturing—a fact that also increases Taiwan's geopolitical sensitivity.

Huawei represents China’s ambition for technological self-sufficiency, despite facing global sanctions. 

Their decisions are no longer just business moves—they influence geopolitics, trade policy, and national strategies. 

6. Opportunities and Risks for Smaller Countries

Nations outside the “tech superpowers” are not excluded—they can benefit by:

Attracting AI investments and cloud infrastructure

Providing talent (through education and training programs)

Specializing in niches (e.g., cybersecurity, medtech)

However, they also risk becoming digital colonies—consuming technology without influencing its direction. Cybersecurity threats, AI-driven surveillance, and economic dependency are growing concerns. 

7. Greece’s Position: From Digital Backwater to Strategic Hub?

Greece has a unique opportunity to reposition itself strategically in this new AI-driven world. With EU recovery funds, strong shipping and tourism sectors, and rising interest from big tech companies (e.g., Microsoft’s investment in data centers), the country can:

Develop a national AI strategy

Invest in STEM education and R&D

Attract regional roles in cybersecurity, logistics, and cloud services

Its geographic position—at the intersection of Europe, Asia, and Africa—offers potential as a digital and energy hub, provided strategic vision aligns with action.

8. Conclusions and Future Outlook

Artificial Intelligence is not just a technological leap—it’s a geopolitical revolution. The world is witnessing a power struggle that will define the next 50 years, not through armies or oil, but through code, chips, and computing power. 

While the US and China dominate the race, the rest of the world—including Europe and smaller states—still has strategic options. Those who invest wisely, regulate intelligently, and build strong public-private alliances can turn this moment of disruption into opportunity. 

The question is not who will build the best AI, but who will control what AI is allowed to do, and for whom.

 
Disclaimer
This report and the information contained herein are for general information only and does not constitute an investment advice