Geopolitics of High-tech

Ananta Insights

Geopolitics of High-tech

Indian and German delegations at the 7th India-Germany Inter-Governmental Consultations (IGC)

As nations vie for supremacy in critical and emerging technologies, it is important to understand the geopolitical imperatives driving them. From artificial intelligence to space exploration, these advancements are not only revolutionising industry, but also redefining international power dynamics and strategic alliances. This newsletter keeps you updated on the various ways in which high technology is shaping geopolitics.

In this edition we analyse the high-tech themes discussed at the 7th India-Germany Inter-Governmental Consultations, Japan’s potential involvement in the Australia-UK-US trilateral security partnership AUKUS, Nvidia’s artificial intelligence push in India, reusable space technologies, espionage in the AI age, India’s new space venture capital fund, India’s first-ever defence space exercise and DRDO’s first successful hypersonic missile test.

1. India and Germany to synergise growth through high-tech cooperation

The seventh round of the India-Germany Inter-Governmental Consultations (IGC) held on 25 October in New Delhi centred on advancing technological cooperation across several high-impact areas to strengthen bilateral relations and foster innovation-driven growth. Key high-tech domains discussed included artificial intelligence (AI), semiconductor manufacturing, green technology, and digital public infrastructure (DPI). India’s Union Minister of Commerce and Industry, Piyush Goyal noted that combining Germany’s engineering expertise with India’s scalable infrastructure could yield substantial benefits globally.

2. Japan’s entry into AUKUS could elevate Indo-Pacific defence collaboration

The US Department of Defense (DoD) confirmed in a 24 October press release that Japan participated as an Observer in the joint military exercises of the United States, United Kingdom, and Australia as part of an engagement under the AUKUS trilateral security alliance. Japan’s potential involvement with AUKUS, while unofficial for now, could mark a new phase in Indo-Pacific defence collaboration, especially in advanced technologies.

The exercises, held at the HMAS Creswell base in Australia’s Jervis Bay, tested cutting-edge autonomous systems. The platforms involved in the drill included unmanned reconnaissance vessels, autonomous cargo drones, and underwater intelligence-gathering devices, representing innovations aimed at enhancing maritime capability and interoperability across AUKUS nations.

The three AUKUS members view Japan’s technological capabilities — particularly in robotics and automation — as being complementary to AUKUS goals.

During Japan’s former Prime Minister Fumio Kishida’s state visit to Washington DC in April 2024, the White House mentioned Japan’s possible inclusion in AUKUS “Pillar II”, focused on non-nuclear tech development. The second pillar, distinct from the nuclear-powered submarine development partnership under Pillar I, seeks to fast-track cooperation on new-age technologies such as AI, quantum computing, semiconductors, and clean energy.

Australia’s Parliament is also considering enhanced export control laws as part of AUKUS commitments, though there are concerns among Australian defence firms about the potential impact on trade with non-AUKUS countries, including Japan. Hugh Jeffrey, Australia’s Department of Defence’s deputy secretary for strategy and policy, told The Japan Times in an interview that Tokyo’s involvement with AUKUS over the coming months could include more joint drills and research partnerships. He emphasised the “need to extend cooperation into industrial and technological fields to better prepare our forces for emerging threats”, signalling a strategic shift in Australia’s security relationships.

The Reciprocal Access Agreement between Japan and Australia that entered into force in August 2023 laid the foundation for great military collaboration and joint exercises. Australia is considering Japan’s role in major programs, such as its plan to replace the ageing Anzac-class frigates. Japanese manufacturers are offering an adapted version of the Mogami-class frigate.

As Tokyo and Canberra deepen their cooperation, their expanding ties may reflect broader regional shifts, with each partner aiming to enhance resilience against geopolitical instability in the Indo-Pacific.

3. Nvidia’s AI push in India: hype vs substance

India has an “amazing natural resource” in its IT and computer science expertise, and should manufacture its own AI, Nvidia’s founder and CEO Jensen Huang said in Mumbai on 24 October. On the surface, Nvidia’s AI push looks like a classic Silicon Valley strategy — pairing Nvidia’s hardware and software expertise with India’s deep IT services ecosystem. By tapping into India’s engineering talent pool and familiarity with outsourcing, Nvidia can ostensibly expand its AI presence without fully building an in-house services arm.

For the Indian firms, these partnerships would be validation from Silicon Valley’s top AI hardware company. But while the headlines make for good press, the implications on the ground are more complex.

Partnerships or strategic bets?

These partnerships are currently more of a strategic bet than a guaranteed success story. While Indian IT companies such as Reliance, TCS, Tech Mahindra, and Wipro have an impressive reach, they face several challenges in delivering on the promised AI potential.

Reliance’s Jio telecom network — whose boss Mukesh Ambani sat down for a fireside chat with Huang —is, for example, wrestling with maintaining profitability in a highly competitive market where average revenue per user (ARPU) remains relatively low compared to developed countries. For Jio, significant investment in AI infrastructure will require sustained funding and patience before any meaningful return materialises.

Nvidia’s state-of-the-art A100 and H100 chips are prohibitively expensive to deploy at scale. It’s uncertain whether a price-sensitive market like India can sustain the heavy capex required to build generative AI applications that are financially viable.

Saturated global AI landscape, complex localisation prospects

India’s entered the global AI race late, and companies in the US, Europe, and China are years ahead in the AI development cycle. Nvidia’s choice to partner with Indian firms could be interpreted as an attempt to rapidly expand its market footprint in emerging economies rather than betting on immediate AI breakthroughs.

Countries like the US and China have invested heavily in generative AI and machine learning and have sophisticated regulatory environments that seek to balance innovation with ethical concerns. India is yet to address the ethical and regulatory frameworks for large-scale AI deployment, and any potential issues that arise could slow its momentum. Nvidia and its Indian partners will need to tread carefully around data privacy, bias, and security concerns.

The idea of an India-centric AI tailored to local languages, dialects, and cultural contexts has great appeal; however, significant hurdles have to be overcome to develop such applications at scale.

Natural language processing (NLP) for Indian languages, for instance, is not as straightforward as it is for widely spoken languages like English or Spanish. India’s linguistic diversity is complex, and creating models that are both accurate and useful across these variations is a tall order. Nvidia’s powerful chips will not solve the challenges of dataset creation, bias mitigation, and practical deployment. India-specific language models need a dedicated research and development pipeline, not just high-powered GPUs.

4. Reusable space technologies: a dramatic new sunrise in space

In a landmark advancement for reusable space technologies, SpaceX last month executed a precision recovery of a Falcon 9 rocket booster using a mechanical arm. The manoeuvre underscores the industry-wide push to minimise costs and increase launch frequency, making access to space more attainable for commercial ventures and governmental projects.

Since the first Falcon 9 booster landing in 2015, SpaceX has refined its recovery technology, achieving an unprecedented rate of booster reusability. However, this new recovery method signifies a leap beyond mere cost savings; it exemplifies an ambitious drive toward fully integrated reuse infrastructure. While SpaceX’s competitors such as Blue Origin and Rocket Lab are also advancing reusability — leveraging proprietary recovery techniques like parachute-assisted water landings — the race has moved from proving reusability to refining recovery speed, precision, and cost-efficiency.

Key to the private space industry’s momentum is growing contracts and partnerships from commercial satellite operators and government agencies. The cutting of launch costs through reusable rockets is especially appealing to small satellite providers and government research projects, now will be able to deploy constellations with unprecedented regularity.

The next decade will likely see increased interest in interplanetary reuse, potentially facilitated by Starship, SpaceX’s forthcoming fully reusable rocket. As the sector continues to mature and the frequency and scale of launches increase, regulatory bodies will need to better address questions of air and space traffic management.

5. Espionage in the AI age: How Deepfake Identities Are Powering North Korea’s Cyber Spies

AI is also reshaping the world of espionage. Clandestine operatives are using AI-driven deepfakes to create forged identities to infiltrate IT departments. These deepfakes can potentially enable spies to blend seamlessly into virtual workforces, undermining traditional security measures and bypassing barriers protecting digital and physical borders.

According to a report in Nikkei Asia, North Korean intelligence is exploiting these advancements to produce sophisticated digital personas, complete with realistic photos, videos, and even backstories that withstand casual vetting. Malicious agents can use these techniques to circumvent background checks, enter sensitive IT networks, and potentially access sensitive data by posing as overseas employees or contractors for Western companies. The reliance on remote work in the post-COVID era, coupled with the challenges of verifying online-only identities, has exacerbated the problem.

North Korea’s cyber strategy has long relied on resourceful, low-cost techniques to overcome the constraints of limited resources. It has conducted operations ranging from cryptocurrency heists to hacks targeting critical infrastructure. But the use of deepfake-powered identities may signify a bolder move to infiltrate targets directly. The use of deepfakes could potentially enable a persistent hostile presence within targeted organisations, capturing their data, monitoring their activities, and identifying their vulnerabilities over extended periods.

Implications for India’s national security

This new era of AI-enhanced espionage has critical implications for India, whose IT and BPO industries are deeply integrated with global digital infrastructure, making them potential targets for espionage efforts by North Korean agents. Such infiltration could lead to data leaks, intellectual property theft, and exposure to ransomware attacks, potentially impairing India’s reputation as a trusted IT hub.

Besides corporate data, India’s government infrastructure — particularly in the defence, nuclear energy, and space sectors — also remains vulnerable. North Korea has demonstrated its interest in critical technologies, and as India advances its national interests in space technology, nuclear energy, and digital transformation, it must stay vigilant against these evolving threats. Hostile actors who gain access to India’s data could enable the unauthorised transfer of sensitive technologies to rival nations.

6. India announces a new space VC fund but its dwarfed by a similar fund launched by Japan
India’s new $120 million venture capital (VC) fund, driven by its space industry regulatory body IN-SPACe, aims to bolster its space sector by financing around 40 startups and promoting self-reliance in advanced space technologies. This initiative, aligned with India’s goal to quintuple its space economy to $44 billion by 2033, aims to attract high-risk capital, nurture talent domestically, and enhance global competitiveness.

India’s fund is, however, dwarfed by Japan’s recently launched $6.7 billion Space Strategic Fund, which has a broader, more capital-intensive approach focused on fostering international partnerships and scaling high-tech development. Together, these initiatives signal an increasing Asian attention to space innovation, even though Japan’s extensive budget and international approach may enable quicker scaling and diverse advancements compared to India’s domestic focus.

7. India just had two watershed moments in defence, a space exercise and a hypersonic missile test

Antariksha Abhyas 2024:
India’s first ever space warfare exercise ‘Antariksh Abhyas 2024’ was held between November 11-13 2024. The three-day exercise was spearheaded by the Defence Space Agency (DSA) in collaboration with various military branches, ISRO, and DRDO. It focused on war-gaming scenarios related to threats to and from space assets. The exercise emphasized the importance of space situational awareness, protection of critical infrastructure, and the integration of space capabilities into military operations. Participants explored emerging technologies and the evolving challenges of space warfare, including international legal frameworks. Outcomes included enhanced interoperability, refined strategies for space defence, and a roadmap for advancing India’s space doctrine aligned with national security goals.

Hypersonic Missile Test:

India’s Defence Research and Development Organisation (DRDO) successfully tested its first long-range hypersonic missile on November 16, 2024. This indigenously developed weapon can carry diverse payloads over 1,500 kilometres, demonstrating high accuracy during terminal manoeuvres. The achievement places India among a select group of nations with advanced hypersonic capabilities, marking a significant milestone in defence innovation. While India already has a previously tested Anti Satellite missile, the hypersonic weapon is likely to be another platform which can boost India’s kinetic capabilities relevant to securing its aerospace defence needs. 

Check these out
1. Why AI is not being used to help create Hollywood movies yet, despite early optimism – SCMP

2. Tesla’s soon-to-be-unveiled robo-taxi may already be behind its Chinese competition – FORTUNE 

3. China’s edge in flying cars and an Asian tag-team in AI – Nikkei Asia

4. The Military Use of AI: Challenges and Opportunities for Taiwan -RUSI

5. Did U.S. Semiconductor Export Controls Harm Innovation? -CSIS

6. Submarine cables: the Achilles’ heel of cyberspace in the Asia-Pacific – IISS

7. FILE 015 – Spies Supercharged: Talking AI and Digital Innovation at CIA – CIA

Thank you for reading Ananta’s Geopolitics of High-tech newsletter. Stay tuned for our next edition.