The Age of AI Nationalism and Its Effects

We live in a time when many nations have deemed artificial intelligence (AI) an economic and national security imperative. has become a priority for many nations. Instead of working collaboratively to develop AI, many countries have adopted AI industrial policies. Policymakers are working to nurture sovereign AI. However, with and without deliberate intent, some nations are acting in ways that —-- with or without direct intent —-- discriminate among foreign market actors. For example, many countries forbid the sale of the latest high-speed chips to China. The US has banned venture capital investments in Chinese Chile and Canada, among other nations provide significant incentives for skilled immigrants to move to, work in and or invest in their AI sectors. Some countries such as China and Russia require foreign suppliers of data driven technologies to reveal their source code –which is often proprietary information.Herein the author makes a distinction between policies designed to advance domestic AI and policies that with or without direct intent Herein, the author describes hamper the production or trade of foreign produced AI or such policies as “AI nationalism.” AI nationalist policies in one country can make it harder for firms in another country to develop AI. If officials can limit access to key components of the AI supply chain such as data, capital, expertise, or computing power, they may be able to limit limit the AI prowess of its competitors in country Y and/or Z. Moreover, if policy makers can shape regulations in ways that benefit local AI competitors, they may also impede the competitiveness of other nation’s’ AI developers. AI nationalism may seem appropriate given the import of AI, but this paper aims to illuminate how AI nationalistic policies may backfire. This paper proceeds as follows. First, the author describes key terms. Next, the author provides background into the roots of AI nationalism. The report paper then follows with examples of national policies designed to promote AI in the AI supply chain that appear to have trade- distorting effects. The author first discusses what scholarly literature teaches us about the potential spillovers of such policies, and then moves towards what the findings may tell readers about these spillovers. Finally, the author makes some conclusions.