How AI will change the rules of international trade

Oct 13
AI will produce winners and losers in international trade and investment. Perhaps more interesting are second-order effects.

There are two underlying assumptions: first, AI services will require a significant amount of energy, not all of it green; and second, many nations will control either the usage of AI or the sale of AI-based products and services, such as the development of novel drugs or educational technology.
According to one estimate, posting a query to ChatGPT uses 10 times as much energy as using Google. Large language models now have enough limitations that they do not significantly affect total power usage.

However, as demand for artificial intelligence services grows, so will the energy strain. Energy-poor nations will choose to import their AI services from those that have cheap energy or nations that will not permit a major increase in energy usage due to environmental concerns or legal restrictions.

Future energy-rich areas may include solar-powered Spain and Morocco, reasonably priced nuclear South Korea, and nations that have pioneered nuclear fusion. These nations might start exporting a lot of data produced by AI.

Some locations in the Americas might also be added to the list, particularly if they are well-adapted to solar and hydroelectricity. These countries could become major exporters of AI-generated data and could draw AI resources from the US.

Through businesses like OpenAI, Google, Meta, and Anthropic, the US will export a lot of AI services; yet, because the US is less adept at developing accessible infrastructure, this will place it at a disadvantage in the AI revolution and spread many of the advancements abroad.

It is unclear whether selling the source code or more derivative AI computations based on infrastructure and electricity will result in greater financial gains.

It could end up being a strong leader in the initial product but lagging far behind in creating the final AI results, which poses a risk to the US economy and national security.
The US will probably continue to lead innovation in artificial intelligence, but it might have to rely on other nations to produce and market AI goods.

Created with