Technology rivalry instead of collaboration: the race for AI supremacy
China’s AGI supremacy divides blocs; U.S. struggles, Europe stagnates, instability.
In 2040, the global order is shaped to a significant extent by the technological race between the US and China. This is driving the unchecked development of AI. This rivalry intensified after China developed the first AI systems capable of independently generating and validating complex scientific theories in 2035. This breakthrough in research efficiency ushered in a phase of accelerated technological progress, which in turn saw China gain significant competitive advantages in key industries such as energy technology, pharmaceuticals and materials science.
As well as competing economically, technologically and militarily, the US and China now also export their political and regulatory models to other regions of the world. This rivalry has divided most of the world into two competing blocs. The US bloc is focused on market-driven AI development, in which private companies such as Google, OpenAI and Microsoft play a central role. The market’s power to innovate is determined by companies that simultaneously exert considerable political influence. In the China bloc, on the other hand, the state pursues a centralised model, in which AI is comprehensively integrated into all areas of society in order to expand state influence. The government controls the infrastructure and strategically directs the use of technology.
Many countries join the bloc that equates to their political structures. The democratically governed countries of Europe, South and Central America are aligned with the US-led bloc. Despite its close economic ties with the US bloc, India is trying to pursue an independent AI strategy in order to preserve its technological sovereignty in the long term. Nations such as Israel, South Korea, Saudi Arabia and the United Arab Emirates are making targeted use of their specific expertise in areas such as AI security and specialised AI applications to position themselves as key partners for both blocs. China is expanding its influence in Africa, the Middle East and parts of South America through strategic infrastructure projects and investments. The resulting techno-strategic partnerships are further consolidating global power structures: like the US, China benefits from favourable production locations and preferential access to raw materials in its partner countries.
AI governance also takes place largely within the two blocs. International organisations such as the UN became less and less important in AI governance during the 2030s due to geopolitical fragmentation. While political agreements like the GDC, and formats and initiatives such as the Scientific Panel on AI and the Global AI Fund, initially served as a basis for international cooperation, rivalries between the blocs forced them to limit their areas of work to humanitarian aspects and AI-based climate protection solutions. The Organisation for Economic Co-operation and Development (OECD) acts as the main platform for AI governance in the US-led bloc. The Global Partnership on AI (GPAI) is focused in particular on research and development. China uses the Shanghai Cooperation Organisation to define political guidelines and AI standards for its partner countries.
The military dimension of AI development escalated in 2036 with China’s annexation of Taiwan, which was officially ordered to protect strategically important semiconductor production. This conflict was the first example of the large-scale deployment of autonomous weapons systems. The resulting control China gained over a large part of global chip production and increased efficiency in Chinese research led to accelerated, AI-supported armament in both blocs. This massively heightened global tensions.
By 2030, the EU had established itself as a global pioneer in safe and transparent technologies thanks to its strong internal market and effective regulatory measures. But while China and the US made rapid technological progress as a result of significant investment in AI and less comprehensive regulation, European companies increasingly fell behind. Strict regulation and limited capital flows inhibited innovation in the EU, causing more and more start-ups and corporations to shift their research and development to more flexible markets. From 2035, the European economy stagnated as AI-dependent industries were no longer able to compete internationally. The economic crisis exacerbated geopolitical tensions within the EU. As a result, some countries turned their backs on the US bloc and instead embraced China and its regulatory approach. In 2040, Europe is effectively split into two camps and the EU is decisively weakened as an independent player. The rules-based approach has given way to market-libertarian and centralised governance models. While the US and China continue to expand their dominance, Europe struggles with economic stagnation, internal differences and the loss of global technological relevance.
The integration of AI into business and finance by 2040 has further strengthened the power of the major tech companies, presenting international governance mechanisms with challenges in terms of market regulation, data control and technological standards setting. This not only contributes to the fragmentation of global markets, but also increases social inequalities, since access to advanced AI technology and the resulting economic benefits are increasingly subject to uneven distribution. These technological and economic developments heightened social tensions in both blocs and their centres, leading to an intensified regulatory debate in the US by 2040. In China, meanwhile, there are growing protests against the comprehensive integration of AI into almost all areas of society. Despite this, the quest for technological progress remains undiminished – the economic and geopolitical competitive pressure is too strong.
WILD CARD: The AGI breakthrough – China achieves technological supremacy
After decades of state-funded quantum research, Tsinghua University, in partnership with the company Baidu, succeeds in developing the first Artificial General Intelligence (AGI) in 2039 with the aid of quantum computers. This achievement heightens geopolitical tensions, as China now controls a key technology of the future. Despite massive investment, the US is initially unable to make up lost ground technologically. The ramifications of this development are far-reaching. China’s AGI is rapidly advancing innovation in science, business and the military. With the US bloc struggling to keep pace, China is investing in the application of AGI to critical areas such as energy and biotechnology. Countries that had previously been manoeuvring between the blocs are coming under pressure to side with China’s technological leadership.