How a surge in defence and dual-use technology investment could reconfigure the global AI race
AI Analysis
Increased defense and dual-use technology investment is driving a shift towards a more fragmented, multipolar AI landscape, challenging the dominance of the US and China. This trend is fueled by concerns over technological dependencies and a desire for national security and tech sovereignty. Companies are advised to prepare for increased geopolitical risk and potential 'tech decoupling'.
Key Takeaways
- Rising geopolitical tensions are driving countries to develop independent AI capabilities.
- A surge in defense-driven innovation is accelerating the development of AI technologies.
- Concerns over reliance on foreign AI technologies are prompting nations to pursue 'tech sovereignty'.
- The AI market is becoming more securitized, potentially leading to instability and reduced interoperability.
- Companies are advised to establish geopolitical risk functions, conduct 'tech decoupling' stress tests, and develop infrastructure compatible with sovereignty requirements.
Why It Matters
This fragmentation of the AI landscape has significant implications for defense and security, potentially hindering international cooperation and increasing the risk of incompatible systems. The need for robust cybersecurity and crisis preparedness is heightened in this more contested environment, particularly regarding critical infrastructure. This shift will require defense organizations to adapt procurement strategies and prioritize resilient, diversified supply chains.
How a surge in defence and dual-use technology investment could reconfigure the global AI race | Chatham House – International Affairs Think Tank
Published: 2026-04-27T23:00:00+00:00 Type: Non-news
Summary
The rise in defence and dual-use technology investment could disrupt the global AI race, which is often seen as a competition between the US and China. This could lead to a more secure and fragmented industry, making it difficult for the current leaders to dominate either the value chain or the technology's wider rollout. The research also highlights four important trends that have been observed in the past year, including the rise of defence-driven innovation and technological advancements.
Story
How a surge in defence and dual-use technology investment could reconfigure the global AI race | Chatham House – International Affairs Think Tank Skip to main content Fund for the Future - Support independent thinking in a changing world. Donate now # How a surge in defence and dual-use technology investment could reconfigure the global AI race Research paper Published 28 April 2026 ISBN: 978 1 78413 681 9 Image — HX-2 AI strike drones by German defence technology company Helsing are displayed at the Bundeswehr Innovation Centre in Erding, Bavaria, 2 February 2026. Photo: Copyright © Michaela Stache/AFP/Getty Images. ### Katja Bego Senior Research Fellow, Europe Programme The AI race is often presented as one between the US and China, with other countries having little to no chance of catching up. Geopolitical tensions and recent trends towards defence-driven innovation and tech sovereignty may soon challenge that assumption. As the global security order deteriorates, countries worldwide are becoming increasingly concerned that, in a more hostile, transactional world, overreliance on others for pivotal technologies like AI is a source of troubling vulnerability. This fear has led to a growing number of countries seeking alternatives with greater urgency, even if these solutions do not always perform at the cutting edge. This research paper argues that these dynamics may lead to a more securitized and fragmented global AI industry, which will make it more difficult for the two current leaders to dominate either the value chain or the technology’s wider rollout. To understand how this scenario may come about, the paper explores four important trends that have accelerated in the past year, and which could start a shift towards a multipolar AI market. The paper concludes by outlining the main implications of these trends, before providing recommendations for private actors on how to prepare. Summary How a surge in defence and dual-use technology investment could reconfigure the global AI race Hide contents ## Summary - While the US and China still dominate AI development, rising geopolitical tensions, a growth in dual-use AI and increasing concerns over technological dependencies are pushing more countries to develop their own AI capabilities