The emergence of artificial intelligence (AI) is poised to create both winners and losers. While this outcome is evident, it is the secondary aspects that hold the most intrigue.
To grasp the implications, we must consider two premises. First, AI services will consume a substantial amount of electricity, which may not always be sourced renewably. Second, many nations will either regulate the use of AI or its derivative goods and services, such as pharmaceutical innovations or new educational technologies.
AI-powered queries, like those made through “ChatGPT,” are energy-intensive, surpassing estimates of Google searches by over tenfold. Currently, the limited scale of large language models may not significantly impact total electricity consumption. However, as AI services’ usage increases, the energy burden will rise.
Countries with high energy prices or those unable to tolerate significant energy consumption due to climate or regulatory constraints will seek to import AI services from energy-rich nations.
Potential energy-rich regions in the future may include Spain and Morocco, known for solar energy, South Korea due to its reasonably priced nuclear energy, and any nation excelling in nuclear fusion technology.
These countries might become key exporters of data generated by AI, potentially drawing input from the United States but specializing in cost-effective calculations and data transfer.
Energy Dominance
Certain regions in the United States could also enter this list, especially if they are suited for electricity generation from solar and hydropower sources. The United States is set to export a considerable volume of AI services through companies like OpenAI, Google, Meta, and Anthropic.
However, the U.S. may not excel in building cost-effective infrastructure, potentially placing it in an unfavorable position in the AI revolution, resulting in diverse benefits to other players.
The critical question remains: will profits from selling the original source code outweigh the revenues generated from AI infrastructure and electricity-dependent calculations? Nonetheless, this poses a potential economic and national security risk for the US, as it may excel in source code but lag significantly in producing final AI outputs.
Flexibility is Key
To avoid this potential problem, facilitating the licensing and construction of energy generation facilities while reducing their costs is essential. Any U.S. state that accomplishes this, and some may, could become a genuine economic force. Many American institutions may prefer to purchase AI accounts locally rather than from foreign entities, driven primarily by data security concerns.
Regarding international trade, local regulatory frameworks related to potential AI service products play a pivotal role. Consider this scenario: AI services propose numerous pharmaceuticals that could be effective in treating various diseases.
However, the United States imposes stringent regulations on approving such pharmaceuticals. This opens up a business opportunity, with some nations specializing in testing AI service products.
Currently, there are major pharmaceutical companies conducting trials in Africa due to lower costs and more lenient regulatory requirements. The scope of this regulatory arbitrage is likely to expand significantly, attracting more foreign investments to nations embracing regulatory opportunities.
Furthermore, advanced AI may outperform certain educational technologies. Many bureaucratic countries might struggle to swiftly adopt these innovations, whereas smaller nations with fewer regulatory constraints could implement them more swiftly.
What if Singapore were to embrace these educational innovations before they spread to Western Europe or California?
Not only would education improve in Singapore, but it could also develop exportable products derived from these innovations, such as interactive online education. Countries that develop or accommodate innovations generated by AI will become more important as exporters.
A Shifting Landscape
Can you imagine a future where the United States leads in AI innovation, while the world relies on Singapore or Uruguay for many tangible products and energy sources? Over time, these countries could become critical allies, depending on one another for various aspects of AI technology.
In general, many major countries may look to partner with smaller, more institutionally flexible counterparts as part of a new wave of economic and perhaps even military alliances driven by AI. The outcome and reliance on different players remain uncertain.
Nevertheless, as with many other human endeavors influenced by AI, international trade will never be
