Artificial Intelligence will be the axis upon which the world turns, according to one geopolitical expert.
“Geopolitics is on our horizon in less of a traditional way,” said Philippa "Pippa" Malmgren, co-founder and president of Canonbury Group and Principalis. “What is happening in AI is going to effect the geopolitical arena and where it’s sensible and smart to invest.”
Malmgren, who served as special assistant to the president for economic policy in the administration of George W. Bush, addressed attendees at the Investment and Wealth Institute’s Annual Conference Experience in Nashville on Monday.
Malmgren noted that countries like Saudi Arabia and China are rushing to build new data storage and processing capabilities driven by alternative energies. These facilities will be able to store and process all the information collected by the growing “internet of things” that links home appliances, cell phones, tablet and laptop computers, cars, and even clothes, giving governments and private entities new insights into the personal lives of millions of individuals.
“We can kind of imagine that everything in reality will be virtualized into many, many data points,” said Malmgren. “We’re creating a world that is almost like a holographic space full of data, more precise and realistic than reality itself. It’s something the human race has been dying for for generations: What we are about to get is an actual crystal ball. This is about total transparency.”
In some cases, governments may use the influx of data to help sort through and control their populations. For example, China is launching a “social credit system,” said Malmgren, a personal score based on an individual’s level of compliance with Chinese social rules. Individuals with low social credit scores may be prevented from travelling by plane or high-speed rail and limited as to what they can do socially and economically.
Private companies in the U.S. and abroad are already using similar systems, notes Malmgren. For example, Uber keeps score of driver and passenger behavior, and Amazon and Facebook track and rank their users.
Still, much of geopolitics is concerned with physical assets and locations instead of virtual ones, said Malmgren. For one thing, Mexico has become more competitive than China in manufacturing, she said.
“Wages in Mexico are now 20 to 40 percent lower than in China, and Mexican quality control is up to American standards, unlike in China,” she said. “The Chinese have sensed a tremendous change in the landscape and concluded that they are no longer competitive in manufacturing.”
In response, China is attempting to dominate global trade through its belt and road initiative, building road and rail connections to Africa, the Middle East and Europe through central Asia, and maritime routes including a system of ports around southeast Asia, India, the Middle East and East Africa. A second maritime route will encircle Asia via the Arctic Ocean, ending in Rotterdam, the Netherlands.