AI's Impact on Sovereignty | #AI23

February 2, 2023
As AI becomes increasingly crucial for national defense and energy independence, the pursuit of sovereignty constitutes a major trend in AI and highlights the interdependence of semiconductor technology, energy supply, and AI capabilities.

#AI23 is a series of articles highlighting what we believe to be developments that will be impacting AI in the coming year of 2023.
This series is co-written by
Dr. Johannes Otterbach, Dr. Rasmus Rothe, Eduard Hübner and Raphael Stücheli.

During the last years, especially since the Russian attack on Ukraine, sovereignty has moved to the center of national and regional attention. As the world moves away from the equilibrium of the post cold war era, EU, China and the USA are trying to consolidate their position in the upcoming world order. We are convinced that the pursuit of sovereignty constitutes a significant trend in AI for 2023 and the years to come, as AI is at the heart of the factors critical for national and regional autonomy. In this article, we want to argue that a country's sovereignty in the 21st century will, besides its military capabilities, crucially depend on semiconductor technology and energy supply. Moreover, we see AI technology as a keystone technology, creating a co-dependency between AI and sovereignty and translating the current state of the world order into a global AI trend. 

AI for sovereignty 

AI in and of itself is a keystone technology for our sovereignty, not only in terms of a country's economic success. As the Russian aggression has painfully taught us, we need to consolidate our defenses and our energy supply. Being dependent on countries like Russia is something we cannot afford if we want to maintain and advance our autonomy. Additionally, we are in the middle of a transformation towards a carbon-free economy. To make this transformation happen, we need innovations to improve our energy infrastructure and make our consumption more efficient. AI will play a crucial role in both the building up of defensive capacities and the transformation of our energy system. 

AI has the potential to assist in national defense by providing faster and more accurate analysis of data, such as satellite imagery and surveillance footage. These applications could help military commanders make more informed decisions and respond quickly to potential threats. AI could also be used to develop new technologies and systems for defence, such as advanced cybersecurity tools. However, the use of AI in national security also raises ethical concerns, such as the potential for AI to be used in ways that violate human rights or to make decisions that have significant consequences for human lives. Therefore, it's crucial for governments and military organizations to carefully consider these issues when exploring the use of AI in national defence. 

Regarding energy, AI has the potential to assist a country in achieving energy sovereignty by enabling more efficient and effective management of its energy resources. For example, AI could be used to optimize the operation of power plants, renewable energy systems, and energy storage systems, which could reduce energy waste and increase the overall efficiency of the country's energy infrastructure. AI could also be used to develop new technologies and techniques for generating and storing energy, such as advanced solar panels or innovative battery technologies. Additionally, AI could monitor and analyze energy consumption patterns to identify opportunities for conservation and demand-side management. Overall, using AI in the energy sector could help a country reduce its reliance on external energy sources and increase its self-sufficiency in this vital area.

Chips for AI

As argued above, countries need AI to secure sovereignty. But to become sovereign in terms of AI, they need to secure their supply of semiconductor technology. The chip industry is increasingly powering the global economy. Crucial to everything digital, semiconductor technology is frequently called the "new oil". For this reason, China and the US have entered a trade war over chips, with both countries investing billions in this technology. The conflict escalated in October 2022 when Washington announced export controls for the most advanced chips and the equipment necessary to make them. These chips are vital in building supercomputers, AI and the internet of things. But not only the US and China are competing. The EU has also made semiconductor technology a top priority through its Chips Act.  

Right now, the Chip industry is a $500bn industry. It's expected to double within this decade. However, the supply chains remain incredibly vulnerable, with the Taiwanese TSMC being the essential production facility, providing 37% of the world's computing power. Korea, another big player in the Chip industry, produces 44% of the world's memory chips, and Japan also adds 17% to our chip supply. On the other hand, California and the Netherlands produce the technology necessary to make the Chips. As many parts of the supply chain are involved in geopolitical conflicts or are vulnerable to earthquakes, this supply chain is very fragile, and a delay in production could cause a shock to the world economy.

Most importantly, the availability of chips is relevant for our ability to build AI because chips are an essential component of many AI systems. AI algorithms require a lot of computational power to run, and chips are the hardware that provides this computational power. Without a sufficient supply of chips, a country may not be able to develop and deploy advanced AI systems, which could limit its ability to use AI for various purposes, including defense, energy, healthcare, and more. A country's ability to produce its chips, or to secure a reliable supply of chips from other sources, is, therefore, an essential factor in its ability to achieve sovereignty in the realm of AI.

Whatever happens in the chip industry will heavily influence AI, and whatever happens in AI will majorly affect our sovereignty. This relation between AI and autonomy is why we believe that the rising concern for independence is one of the most critical trends in AI. The traction generated by the demand for chips, energy and defence will shape our road ahead for not only 2023 but for the whole decade.

Read more