From Technological Rivalry to Global Governance: The path forward

Emerging technologies like AI and advanced semiconductors are likely to follow a similar path.

The current geopolitical landscape is increasingly tense, with nations viewing technological supremacy—particularly in semiconductors and artificial intelligence (AI)—as essential to both national security and economic dominance. The United States and China are aggressively decoupling, while regional powers like India, Japan, and the European Union are strengthening technological sovereignty through protectionist policies. This has created a world dominated by zero-sum thinking, where nations seek to secure technological futures at others’ expense. However, historical patterns and systems theory suggest that technological nationalism is not an endpoint, but a transitional phase toward more sophisticated global governance mechanisms.

Game Theory and Homeostasis

Game theory helps explain why nations may eventually move beyond the current tech wars. Nations are currently locked in a "Prisoner's Dilemma," where each believes protecting its technological assets is the best strategy, even though cooperation would yield greater benefits for all. The Nash equilibrium favours non-cooperation, manifesting in export controls, investment restrictions, and technology indigenisation. However, this leads to negative consequences for global innovation and economic growth. For example, a study by the Semiconductor Industry Association suggests that fully self-sufficient local supply chains would raise semiconductor prices by 35%-65% due to lost economies of scale.

Game theory also suggests that in repeated interactions, cooperation often emerges through strategies like "tit-for-tat," where players reward cooperation and punish defection. The increasing economic costs of technological isolation—such as the IMF's report that fragmentation could lead to a 5% GDP loss for many economies—create incentives for nations to seek cooperative frameworks. Nations are realising that complete technological self-sufficiency is neither achievable nor desirable. Even tech companies like TSMC and ASML influence these outcomes, complicating traditional game theory assumptions. However, rational actors tend to recognise that cooperation is the better game-theoretic approach.

Homeostasis from biological systems offers another useful lens. Just as organisms maintain stability through negative feedback loops, the international system develops mechanisms to restore equilibrium when threatened by instability. Technological nationalism deviates from the stable, globalised system of the post-Cold War era. The resulting inefficiencies and vulnerabilities will likely drive the system back towards a new equilibrium that balances national security concerns with global technological cooperation.

This process is already visible in some technological domains. For example, in quantum computing, nations collaborate on scientific advancements despite geopolitical tensions. The European Union's International Cooperation on Quantum Technologies (InCoQFlag) project involves countries like the US, Canada, and Japan, highlighting the necessity of collaboration. Similarly, space exploration rivals cooperate on orbital debris management and deep space communications, recognising the global commons of space requires collective governance.

Historical Evidence

History offers examples of how global governance mechanisms emerge from periods of conflict. The 1930s saw the rise of economic nationalism, which led to the creation of the Bretton Woods system and the World Trade Organisation (WTO). These frameworks, while imperfect, have helped manage global trade disputes, with the WTO resolving over 600 cases since 1995. Similarly, the Cold War nuclear arms race led to treaties that substantially reduced the risk of nuclear conflict.

A relevant historical parallel is the evolution of internet governance. The early internet was primarily managed by the US, but as it became a global resource, governance shifted to a multi-stakeholder model, involving governments, civil society, and the private sector. The Internet Corporation for Assigned Names and Numbers (ICANN), established in 1998, represents a governance approach that balances national interests while acknowledging the global nature of technology.

Climate change negotiations also offer insight. The transition from the 1992 Rio Earth Summit to the 2015 Paris Agreement shows that international cooperation evolves through periods of chaos and disorder, from non-binding commitments to more structured frameworks. Global climate agreements have allowed countries to set their own commitments while creating transparency mechanisms. Though progress has been slow, the model offers a valuable approach for technological governance. Modest successes, like the Montreal Protocol on ozone-depleting substances, demonstrate the benefits of international cooperation.

Path Forward: Co-operative Competition

Emerging technologies like AI and advanced semiconductors are likely to follow a similar path. Initial agreements on specific issues will gradually expand to comprehensive frameworks as countries realise that divergent approaches are futile. Private companies, which now significantly influence state policies, will also recognise the benefits of cooperation over antagonism. The Global Partnership on Artificial Intelligence, launched in 2020 with 29 member countries, and AI safety summits at Bletchley Park in 2023 and Seoul in 2024 indicate a growing recognition of the need for collaboration.

Game theory suggests that the optimal strategy is "cooperative competition"—maintaining competitive elements while collaborating on shared challenges. This approach could see nations continuing to pursue technological leadership while participating in governance frameworks that prevent destabilising competition. Examples might include agreements on AI safety, semiconductor supply chain resilience, or quantum encryption protocols.

The most viable path forward involves a layered governance approach. Some domains with direct national security implications will remain under national control. Others will be governed through plurilateral arrangements among like-minded countries, while technologies with global commons implications—like AI safety or space exploration—will require truly global frameworks. This differentiated approach acknowledges the legitimate security concerns driving techno-nationalism, avoiding the counterproductive dismissal of these concerns.

Technological nationalism represents a transitional phase, not a stable equilibrium. The homeostatic mechanisms of the international system—economic incentives, security imperatives, and the inherently global nature of technology—will gradually push nations toward cooperative frameworks. As game theory predicts, rational actors will eventually recognise that managing competition through rules is more beneficial than engaging in costly technological isolation.

The path forward will not be smooth. Setbacks and conflicts will occur, but historical patterns suggest that technological competition eventually gives way to governance frameworks balancing national interests with global benefits. The question is not whether global technology governance will emerge, but when, and what form it will take. For policymakers, the challenge is to accelerate this transition, shaping governance mechanisms that reflect their values and interests before crisis forces less optimal solutions.