The Dangers of AI Nationalism and Beggar-Thy-Neighbour Policies

As they attempt to nurture and govern AI, some nations are acting in ways that – with or without direct intent – discriminate among foreign market actors. For example, some governments are excluding foreign firms from access to incentives for high-speed computing, or requiring local content in the AI supply chain, or adopting export controls for the advanced chips that power many types of AI. If policy makers in country X can limit access to the building blocks of AI – whether funds, data or high-speed computing power – it might slow down or limit the AI prowess of its competitors in country Y and/or Z. At the same time, however, such policies could violate international trade norms of non-discrimination. Moreover, if policy makers can shape regulations in ways that benefit local AI competitors, they may also impede the competitiveness of other nations’ AI developers. Such regulatory policies could be discriminatory and breach international trade rules as well as long-standing rules about how nations and firms compete – which, over time, could reduce trust among nations. In this article, the author attempts to illuminate AI nationalism and its consequences by answering four questions: – What are nations doing to nurture AI capacity within their borders? – Are some of these actions trade distorting? – Are some nations adopting twenty-first century beggar thy neighbour policies? – What are the implications of such trade-distorting actions? The author finds that AI nationalist policies appear to help countries with the largest and most established technology firms across multiple levels of the AI value chain. Hence, policy makers’ efforts to dominate these sectors, as example through large investment sums or beggar thy neighbour policies are not a good way to build trust.