lipped from: https://www.thehindubusinessline.com/opinion/ai-regulations-the-newest-cold-war/article69189043.ece
The regulatory fragmentation is driven by the rise of techno-nationalism
The AI Action Summit in Paris on February 10-11, where Prime Minister Narendra Modi is co-chair, aims to foster international cooperation on AI governance.
But will it lead to a unified vision, or will it merely expose the growing fractures between nations fiercely competing for AI supremacy? AI has become the new Cold War battleground.
At the heart of this global contest are the US, China, and the European Union, each advancing divergent models of AI oversight that reflect their national priorities.
The US, historically a champion of laissez-faire technological expansion, has now shifted towards interventionism. Recognising the risks of unchecked AI growth, Washington is tightening export controls, restricting foreign access to its AI models, and considering licensing requirements for advanced AI systems. This shift signals a determined effort to safeguard America’s AI pre-eminence while curbing China’s AI ambitions.
In contrast, the European Union has taken the lead in regulatory foresight with its AI Act —the world’s most comprehensive framework for AI governance. By imposing strict compliance standards, the EU seeks to mitigate AI’s societal risks. However, as AI innovation accelerates globally, there are concerns that Europe’s regulatory rigour could dampen its competitiveness, leaving it vulnerable to faster-moving markets.
China, on the other hand, has adopted a radically different state-controlled approach. Unlike the West, where AI governance is shaped by corporate influence, legal oversight, and market forces, China’s AI regulation is centrally orchestrated to align with national security, surveillance, and military priorities.
AI is not just an economic tool for China — it is a strategic asset, deeply woven into statecraft and geopolitical ambitions.
Fragmented regulation
Nations and corporations will soon be forced to choose sides — aligning with either America’s selective restrictions, Europe’s stringent oversight, or China’s state-controlled model. The repercussions will be profound — fragmented AI safety standards, asymmetric barriers to cross-border AI collaborations, and competing governance models that further polarise the global AI landscape.
Instead of a cooperative AI future, the world is heading towards regulatory isolationism, which risks stalling progress, hindering collaboration, and entrenching power imbalances for decades.
This fragmentation is driven by the rise of techno-nationalism — where nations are prioritising their own AI ecosystems, securing intellectual property, and erecting regulatory barriers to protect domestic AI champions. The debate over open-source AI further deepens this divide. Adding to this complexity is the increasing corporate influence over AI governance. Tech giants are actively lobbying to shape regulatory frameworks in ways that serve their commercial interests.
The US is not just securing its technological dominance but also protecting its corporate AI giants.
The EU, despite its ethical regulatory stance, may unintentionally shield European companies from global competition, while in China, AI firms are deeply integrated into state policy, ensuring that their innovations serve national priorities.
A more troubling trend is the weaponisation of AI regulation as a tool for economic warfare. AI is now subjected to export restrictions, licensing regimes, and compliance barriers designed to suppress competition and limit adversarial nations’ AI capabilities.
For India, this is a critical inflection point. It must decide whether it will define its own AI path or risk being an observer in a game where others are setting the rules.
The writer is a corporate advisor
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