Author: Dr. Andrea Little Limbago, SVP, Applied AI, interos.ai
To kick off the New Year, Russian President Vladimir Putin ordered the Russian government and its major bank to coordinate AI development with China. This announcement followed a similar one a few weeks earlier wherein Russia highlighted collaboration among the BRICs (Brazil, Russia, India, and China) and South Africa for an AI alliance.
These announcements, in turn, coincide with a steady drumbeat of AI-driven techno-alliances among the US and its allies, including those between the EU and US, within the QUAD, as well as adjacent policies such as the CHIPs Act and the US AI Executive Order.
Yesterday’s Interim Final Rule on Artificial Intelligence Diffusion is the latest global policy aimed at technological diffusion within allies, which continues to deepen the growing technological bifurcation and upend global supply chains. In the race to implement AI, organizations must stay atop the global technospheres of influence, which will continue to reshape corporate technology stacks or else introduce new security and regulatory risks.
Summary of Bifurcation
The latest wave of AI-focused, technology alliances is a continuation of a pattern that has been going on for years. Technospheres of influence have emerged, wherein part of the world is building upon largely Chinese-created technology infrastructures, and other parts on those built by US and allies.
The US-China trade war initially instigated the nascent splintering almost a decade ago and was followed by US and European export controls and sanctions targeting thousands of companies in China and Russia. China, in turn, has an Unreliable Entity List, which saw the most recent additions on January 2 with the announcement of the addition of ten US defense companies.
These policies have accelerated, both with the increase of geopolitical tensions, but also due to the growing awareness of sanctions circumvention and the use of US-created technology by Russia against Ukraine.
Both the EU and US have specifically targeted distinct rounds of sanctions with anti-sanctions circumvention goals. The result, so far, has been a widening of geographic divisions of technology stacks dependent on geographic location and geopolitical alliances.
Potential Impact
This latest Interim Rule targets foundational AI technologies, including automatic data processing machines, electronic integrated circuits, semiconductors, and calculating machines. The Interim Rule specifically encourages the exchange and research collaboration in these product areas with 18 allies, while restricting their access to ‘non-trusted actors’, a consistent thread among the series of other US AI-related policies over recent years.
Interos.ai identified over 27,000 companies in the US who export these four very specific product categories. These companies, in turn, have global footprints across non-trusted countries and allies alike, as detailed in the table below. Over 20% of companies buying directly from these US companies are in Mexico, followed by India, Great Britain, Colombia, and Canada.
China is among the top 12 direct customers producing one of these products: automatic data processing machines, electronic integrated circuits, semiconductors, and calculating machines. Under the Interim Rule it is assumed that these products could be used in AI technologies.
As you see in the table above, there are thousands of companies who purchase the four product areas listed above. Over 650 of these are in countries of concern, such as China, Russia, and Iran, which exceeds one thousand when looking into the third tier. Meanwhile, almost 4,000 companies are among the 18 allied countries listed in the Interim Rule, and over 3,700 tier 3 companies.
This highlights both the risks and opportunities for companies in complying with the Interim Rule, wherein sizable mats already exist for expansion among like-minded democracies. At the same time, this also illustrates the increasing challenge of doing business in at-risk or adversarial countries.
While these numbers focus on very small, niche product categories, they often are components of much bigger and broader product technology ecosystems.
To that end, when looking at the US tech industry writ large, interos.ai data reveals almost 575,000 companies globally that are directly supplied by a company in the US tech industry. The biggest direct importers from the US technology industry are concentrated in the United Kingdom, India, Australia, Canada, and Mexico.
US AI Policy in Transition
As we noted last Fall, AI governance is critical for shaping the global rules of the road when it comes to AI development, deployment, safety, and security. The EU released the first comprehensive AI policy last year, while the Executive Order and Blueprint for the AI Bill of Rights are the most comprehensive frameworks from the US, but lack the regulatory teeth.
In addition, as often occurs with leadership transitions, there is uncertainty surrounding how the next administration will approach AI. The AI Executive Order is expected to encounter additional scrutiny, with potentially getting repealed based on comments made by the incoming Trump administration. However, based on an AI executive order late in 2020, there are likely areas of continuity as well, indicating that AI policy will remain a moving target.
Geopolitical Tensions will be Central to the Shifting AI Regulatory Landscape in 2025
Given the fast pace and broad impact of AI, the only certainty around the global AI regulatory landscape is that there will continue to be shifts and changes, with geopolitical considerations central to these changes. While the new Interim Rule is the latest example of AI-driven governance updates, it will not be the last.
The geopolitical landscape will continue to drive technological bifurcation, creating distinct technospheres of influence among the US and allies in contrast to China and like-minded regimes.
In addition, we can expect to see changes in AI policies focused on enhancing the underlying security and safety fundamentals of AI. AI security concerns are likely to come front and center in 2025.
On the security front, these will focus on minimizing adversarial AI, including prompt injection attacks, data poisoning, and model manipulation. There also are safety concerns, and we can expect the use cases of specific AI to drive regulatory practices, with higher safety use cases attracting greater regulatory oversight compared to low risk use cases.
The first two weeks of 2025 have already proven eventful for the global AI regulatory landscape. With AI proving to be a generational technology, not only is technological innovation critical, but so too are the governing frameworks surrounding it.
interos.ai views secure AI as a growing and critical consideration for supply chain, full of both opportunities and challenges. We work closely with our customers, supporting their AI governance frameworks and serving as strategic partners to guide AI governance decisions.
To learn more about it and other major trends for 2025, download the interos.ai 2025 Predictions Report.
