The outcome of the geopolitical struggles between silicon empires is uncertain, but some features are becoming clear. At its limits, this competition would entail a breakdown into fully decoupled hemispherical stacks: a bipolar (or perhaps tripolar) digital world. America and China already seem intent on doing this domestically. China’s ‘Delete A’ project, for instance, aims to remove American technology from the supply chains of Chinese firms. This has meant a number of government directives and regulator encouragements for Chinese companies to avoid using American technology. In 2022, for instance, state-owned companies were told to replace foreign software, and in 2023 domestic semiconductor firms came “under increasing pressure to favor domestic firms and develop alternative supply chains.” The United States has similarly blocked Huawei infrastructure from being deployed domestically and is making new efforts to prevent the use of Chinese open AI models from being used by American organizations.
There are also efforts to enforce this decoupling abroad, sometimes by making countries choose between the United States and China. As OpenAI’s chief global affairs officer has said, “These countries know this is nation building. They have to pick between one of the two.” In this vein, the U.S.- led Clean Network initiative is a prime example of what may happen. Responding to the surprising success and rollout of HuaweiHuaweiHuawei is a Chinese technology company focused on mobile phones and telecommunications, and is seen as a poster child for China’s global tech ambitions.READ MORE’s 5G infrastructure, the first Trump administration launched the Clean Network as an alliance of countries who resisted incorporating Chinese infrastructure across the technological stack: telecoms networks, fibre-optic cables, cloud computing, app stores, and mobile apps. While the official branding and diplomatic efforts behind the Clean Network programme disappeared under Biden, the broad strategic focus continued. China, for its part, responded with the launch of its Global Data Security Initiative (GDSI) that sought to allay European fears over data security and to build a counter-network to the Clean Network project.
The case of G42 foreshadows how AI companies around the world may be treated by the U.S. in this geopolitical conflict. G42 is a UAE holding company backed by a prominent member of Abu Dhabi’s ruling family and focused on the development and application of AI. In April 2024, Microsoft announced a $1.5 billion investment into the company on the back of G42’s encryption technology that had been developed to maintain countries’ data sovereignty even when the data was hosted on American cloud infrastructure. The investment was illuminating, however, as the company had been the focus of policymaker concern about its relations to China. G42 had made previous investments into Chinese AI companies, and there was worry that this could be a path for U.S. intellectual property and technology to be transferred to China. Illustrating how hemispherical stacks may be formed, though, it was revealed that the company had already divested itself of these relationships in November 2023, after secret discussions with U.S. officials where the company was told they would have to choose either the United States or China.
The near-term future appears to be a world of overlapping networks — digital, production, financial, logistical, and so on — that are unlikely to all align with one particular great power.”
The United States also agreed to allow advanced Nvidia chips to be sold to G42 — a major achievement for the UAE company given the sensitivity of these chips and the prior U.S. concerns about the company. The requirements placed on the data centers to make them secure are extensive, including the complete absence of any Chinese technologies — to the extent that “older data centres have been stripped of any parts with ties to China, even if those parts are unplugged and not being used.” Military-grade encryption, physically separated compute units, intense security screening of personnel, real-time monitoring of compute usage, and a Department of Defense group that red-teamed possible attacks were all part of the security requirements as well. This may end up being a template for hosting American data centers in foreign countries.
However, far more likely than full decoupling into hemispherical stacks is something like the growing prominence of digital sovereignty efforts combined with the continued layering of U.S. and Chinese technological stacks. Digital sovereignty has been the subject of mounting interest in recent years — from regional entities like the EU to activist groups in countries like Brazil — but it remained mostly marginal in the face of overwhelming acceptance of American digital infrastructure. The second Trump administration has dramatically changed the calculus of digital sovereignty, though. Watching the open willingness of the United States to use its control over satellite infrastructure as leverage in negotiations over Ukrainian critical minerals has been just one of many actions that have made countries have second thoughts about their dependency on America.
Balancing between the United States and China will remain a viable but difficult strategy for countries.”
The reaction in Europe has been surprisingly swift. Alongside the well-publicized efforts to build up European defence forces, there have been equally significant efforts to build European digital sovereignty. In April 2025, Christine Lagarde, the president of the European Central Bank, argued that Europe “can no longer be sure that we will have friction-less access to new technologies developed overseas’ and that it must ‘establish itself at the technological frontier.” As part of this effort, Europe has begun a push for large-scale AI-focused data centres that will be “a service accessible to all.” A group of investors have set aside €150 billion to put into European AI, and the European Commission has added a further €50 billion to that effort. France, meanwhile, announced that €109 billion of private funding was set to be invested into the country for AI — largely focused on building data centers. These investments are indicative of a remarkable shift in Europe’s stance towards control over its AI infrastructure. In other ways, European politicians may end up forced to establish their own digital autonomy. For instance, the rules that enable the transfer of data from the EU to the United States are looking increasingly creaky under the weight of Trump’s behavior. Court decisions may make it so that Europe has to build its own digital infrastructure. In any case, digital sovereignty is likely to be a major focus in the coming years.
Working alongside such digital sovereignty efforts is the continued layering of different geopolitical stacks on top of each other. This marks a notable change from the Cold War period of territorial blocs, where allegiances were far more mutually exclusive. By contrast, the near-term future appears to be a world of overlapping networks — digital, production, financial, logistical, and so on — that are unlikely to all align with one particular great power. It also means that countries other than the United States and China are able to have more agency over their choices. In what has been called “omnialignment” or “polyalignment,” countries are able to partner with multiple great powers at the same time. The emerging geography of AI data centers is illuminating here, with Southeast Asia a particular hot spot as major investments flow into Indonesia, Malaysia, Thailand, and Vietnam. In an effort to attract this investment, countries are offering incentives like tax breaks, subsidies, data trade agreements, and fast track approvals. Many of these countries are also experiencing investments from both American and Chinese firms, an expression of their physical proximity to China and the global reach of American firms. The territorial logic of containment in the Cold War is diminished, replaced by a struggle for control over key network hubs. Decoupling pressures remain here, though, and may intensify in the years to come. For instance, when Malaysia launched a prominent AI infrastructure project featuring Huawei chips, the claims about Huawei’s involvement were soon rolled back and scrubbed from official documents. Balancing between the United States and China will remain a viable but difficult strategy for countries.
