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Geopolitical instability is increasingly affecting the development and deployment of artificial intelligence (AI) infrastructure by disrupting energy systems, semiconductor supply chains, and digital infrastructure networks. While existing research has explored geopolitical risk, digital sovereignty, and AI governance, little attention has been paid to understanding how geopolitical factors are integrated into the valuation and strategic allocation of AI infrastructure. This theory-building study introduces the concept of geopolitical repricing, defined as the process through which firms, investors, governments, and infrastructure operators revise their assessment of the economic value, risk profile, and strategic importance of AI infrastructure in response to geopolitical instability. Drawing on literature on geopolitical risk, AI infrastructure, digital sovereignty, geo-economics, and investment under uncertainty, the paper develops a four-stage analytical framework that links geopolitical shocks, transmission channels, revaluation, and strategic reallocation. The framework identifies three interconnected transmission channels: energy volatility, supply-chain disruption, and infrastructure vulnerability, and explains how their cumulative effects may influence valuation judgments, investment criteria, and infrastructure allocation decisions. The study further proposes a set of theoretically derived propositions and operational indicators to guide future empirical research. The paper contributes to the emerging political economy of AI by providing a conceptual explanation of how geopolitical instability may shape infrastructure valuation beyond the immediate effects of disruption. It lays the groundwork for future research on the connections between geopolitical factors, infrastructure strategies, and AI development.
Frimpong et al. (Thu,) studied this question.