ANANTA INSIGHTS
Geopolitics of High-tech
PM Modi with President Lula da Silva of Brazil
As nations vie for supremacy in critical and emerging technologies, understanding how the intersection of geopolitics and high-tech innovations shapes global dynamics becomes paramount. Advancements in areas from artificial intelligence to space exploration not only revolutionise industries but redefine global power and strategic alliances.
In this edition we analyse high-tech focus areas discussed at the G20 Brazil summit, how Trump’s election and Biden’s outgoing administration are affecting the global high-tech sphere, how India’s semiconductor PLIs compare to other Quad countries, how China is expanding its BeiDou satellite constellation, Japan’s ‘AI Grid’, and how DRDO’s GaN and SiC wafer breakthroughs have a geopolitical dimension.
1. DPI & AI blueprint for high-tech driven inclusive growth
The Brazil summit highlighted a key paradox of our era, that technology is advancing at an unprecedented pace but its benefits remain unevenly distributed. The G20 declaration therefore underscored technology’s transformative potential in tackling inequality, driving economic growth, and advancing Sustainable Development Goals.
Digital Public Infrastructure: Central to the summit’s high-tech agenda was digital public infrastructure (DPI), a cornerstone for inclusive development. With examples from countries like India’s UPI and Aadhaar systems, the summit demonstrated how well-designed DPI, bolstered by artificial intelligence (AI), can enhance job creation, deliver better health and education outcomes, and renew public faith in democratic systems. Building on the momentum of the Global Digital Compact and the Global DPI Summit in Cairo, the G20 reinforced its commitment to scaling such initiatives globally.
DPI is the scaffolding for digital inclusion. Modular, interoperable, and scalable by design, DPI can seamlessly connect citizens, businesses, and governments. For the private sector, especially small and medium enterprises (SMEs), this infrastructure can democratise access to markets and reduce barriers to growth. Health-tech start-ups, for instance, can integrate with national platforms to deliver affordable, scalable solutions, while fintech companies can drive financial inclusion by tapping into interoperable payment systems.
The promise of DPI hinges on trust. Citizens need assurance that their data is protected, used responsibly, and managed transparently. G20 emphasised the necessity of robust data governance frameworks that balance innovation with security. By ensuring privacy and intellectual property rights, the declaration aims to build confidence among users and investors alike.
Artificial Intelligence: Discussions on AI centred on its dual role as a driver of innovation and potential disruptor. Foundation models trained on diverse, representative datasets were spotlighted as essential for equitable deployment. By reflecting linguistic and cultural diversity, AI can deliver personalised solutions that benefit marginalised populations while avoiding biases that perpetuate inequality.
To ensure this, the G20 endorsed a technology-neutral approach to AI development, fostering competition while avoiding the pitfalls of vendor lock-in. This is pivotal to enable nations to adapt AI systems to local needs while stimulating innovation across sectors.
2. Impact of Trump’s election and Biden’s last days in office
Donald Trump’s 2024 re-election as US president has renewed concerns about potential trade wars, regulatory changes, and tariffs. Many tech companies are likely bracing to deal with the impact of heightened protectionism, especially with Trump signalling significant tariffs on Chinese imports — potentially as high as 60% for specific categories. If implemented, the tariffs could increase production costs for semiconductor companies and consumer electronics giants, who rely heavily on international supply chains. It might also accelerate inflation and dampen GDP growth globally, complicating financial outlooks for many sectors.
Companies are considering shifting manufacturing bases or diversifying suppliers to mitigate risks. Some are lobbying for federal incentives to offset anticipated costs, suggesting an industry-wide shift toward a more self-reliant US tech ecosystem. However, achieving such independence will take years and significant investment, leaving multiple sectors vulnerable in the interim.
Trump’s re-election is particularly relevant for emerging tech industries — the new Trump administration expected to roll back regulatory constraints in AI and cryptocurrency, favouring rapid innovation over strict oversight. While this deregulation could spur technological advancements and investment, it raises concerns about privacy, ethical safeguards, and market monopolisation. The administration is also likely to pursue more lenient antitrust policies, enabling ‘Big Tech’ to further consolidate, which could stifle smaller innovators and reduce market competition.
3. Biden’s late-term push for CHIPS act incentives
On the surface President Biden’s late-term flurry of CHIPS Act incentives is another strategic push to solidify America’s semiconductor manufacturing capabilities. However the timing also reflects pragmatic political calculus. By accelerating funding allocations, Biden ensures these initiatives are embedded in the federal framework, making it more challenging for any succeeding administration to dismantle them. Additionally, this approach serves as a legacy-building move, showcasing economic resilience and technological independence as key accomplishments of his presidency.
By allocating billions in funding to companies like Intel, BAE and Applied Materials, the outgoing administration also seeks to address vulnerabilities in critical technology supply chains only exposed during more recent geopolitical disruptions.
The effort aligns with Biden’s broader industrial policy over the previous 4 years to counter China’s growing dominance in semiconductor manufacturing. The CHIPS incentives as stated by the White House, aim to attract private investment, spur local R&D, and create high-paying jobs, reinforcing US leadership in cutting-edge technologies. For example, Intel’s grant is focused on expanding domestic chip production, while BAE’s funding targets defence-related semiconductor advancements.
4. India’s semiconductor strategy compared to other Quad nations
India’s National Chip Design Infrastructure and incentive programmes represent a bold attempt to integrate into the global semiconductor value chain. With initiatives like funding support for start-ups and infrastructure grants, India aims to develop a comprehensive ecosystem, fostering local design and innovation. These policies complement broader efforts under its Production-Linked Incentive (PLI) scheme, which targets semiconductor manufacturing.
Compared to other Quad nations — Japan, Australia, and the US — India’s approach is more nascent but aspirational. The US, under the CHIPS Act, focuses on large-scale manufacturing and R&D, leveraging its established industry base. Japan emphasises collaboration with private firms to enhance chip fabrication, while Australia invests in advanced materials research.
India’s strength lies in its cost-competitive talent pool and government-backed initiatives to attract global players. But compared to the US and Japan, it lags in infrastructure and high-end manufacturing. Bridging this gap requires sustained investment, international partnerships, and policy continuity.
5. China seeks to expand its BeiDou satellite constellation to compete with US
China’s ambitious next-generation BeiDou satellite navigation system roadmap is strategic consolidation of its role as a global space power while countering reliance on US’s GPS. The China Satellite Navigation Office unveiling the blueprint, targets 2035 for completion and envisions an integrated constellation spanning geostationary, medium, and low Earth orbits, an unparalleled positioning accuracy and service reliability.
This will improve BeiDou’s precision to a decimetre, matching or surpassing competitors, and expand capabilities across diverse environments, including urban canyons and remote regions. Initial test launches are scheduled for 2027, with operational deployment aimed for 2029.
In securing technological independence, China’s also advancing on its commercial and geopolitical goals. BeiDou plays a critical role across sectors from transportation to telecommunications domestically and serves as a centrepiece of China’s Belt and Road Initiative abroad. Advanced technology can only amplify these advantages, bolstering China’s soft power and economic influence.
Challenges: First, developing such a complex, multi-layered system demands cutting-edge innovation and rigorous testing to ensure reliability and security. Any delays or technical failures could undermine effectiveness and international reputation. Second, geopolitical tensions may complicate global adoption, particularly in regions where alliances with the US and EU could dissuade reliance on Chinese infrastructure. Finally, commercial success will hinge on integrating BeiDou’s advancements with rapidly evolving global technology ecosystems dominated by private sector leaders like SpaceX and OneWeb.
China’s emphasis on autonomy and resilience is a calculated response to growing concerns over space competition and the militarisation of orbits. Yet, its long-term success will require deft management of technology, diplomacy, and market forces to ensure BeiDou’s relevance in a fiercely competitive landscape.
6. Nvidia and Soft Bank to collaborate on Japan’s ‘AI Grid’
Nvidia and SoftBank’s collaboration to build a transformative ‘AI grid’ in Japan firms up its position as a global AI leader. Nvidia’s cutting-edge DGX GH200 supercomputers strategically integrated into SoftBank’s data centres is an infrastructure designed to power advanced AI workloads across industries, from healthcare to autonomous transportation.
The ‘AI grid’ concept is groundbreaking. Modelled after traditional electrical grids, it envisions a decentralized yet interconnected network, allowing enterprises to access AI resources on demand. This flexibility can democratise AI adoption, enabling start-ups and established corporations alike to harness high-performance AI capabilities without heavy upfront investments.
Strategically, the partnership aligns with Japan’s ambitions to stay competitive in a rapidly evolving technological landscape. Countries like the US and China dominate AI innovation, and Japan’s reliance on imported AI systems has been a vulnerability. By building a robust local infrastructure, Japan can reduce dependencies while cultivating domestic talent in AI development.
Nvidia’s hardware dominance and AI expertise make it the backbone of Japan’s AI ambitions. The DGX GH200 systems, powered by Grace Hopper Superchips, offer unprecedented memory and compute capacity tailored for Generative AI and large language models. These capabilities directly address growing demand in areas such as personalised medicine, climate modelling, and digital twins for smart cities.
SoftBank, with its telecommunications reach, likely ensures the grid is not just technologically sophisticated but also accessible nationwide. Integration of 5G connectivity into this AI ecosystem highlights an innovative approach to edge computing. By bringing AI processing closer to the end user, applications requiring real-time data processing, such as autonomous vehicles and IoT devices, can function seamlessly.
Economically, the initiative could spur a wave of innovation across sectors, bolstering Japan’s GDP and global competitiveness. The grid could also act as a magnet for international investment, further embedding Japan within the global AI supply chain.
Challenges: Building and maintaining such a massive infrastructure is capital-intensive, raising questions about long-term profitability and scalability. Regulatory hurdles related to data security and privacy in AI applications may also impede rapid implementation. Moreover, Japan’s ageing population and labour shortages could slow the development and deployment of AI technologies.
Nevertheless, the strategic benefits outweigh the challenges. Leveraging Nvidia’s technological prowess and SoftBank’s infrastructure expertise, Japan is positioning itself as a leader in next-generation AI. This public-private collaboration reflects a broader trend of partnerships between tech giants and nations, as they recognise the transformative potential of AI to drive economic and societal change, serving both local and international needs.
7. DRDO’s GaN and SiC breakthroughs have a geopolitical dimension
DRDO‘s Solid State Physics Laboratory (SSPL) has successfully developed 4-inch diameter Silicon Carbide (SiC) wafers and Gallium Nitride (GaN) High Electron Mobility Transistors (HEMTs) capable of handling up to 150W. These components are essential for creating Monolithic Microwave Integrated Circuits (MMICs) with applications up to X-band frequencies. This development serves defence, aerospace, and clean energy sectors in the main by improving system efficiency, reducing size and weight, and enabling superior performance. In terms of applications, GaN and SiC manufacturing technology is pivotal for RADARs, electronic warfare systems, unmanned systems, and renewable energy solutions. It’s a significant contribution to India’s self-reliance in advanced semiconductor technologies.
In the context of the Quad, these innovations align with shared goals of technological advancement and strategic supply chain resilience, reducing dependency on external sources. The US and Japan are already global leaders in GaN technologies. Their collaboration with India can bolster mutual capabilities.
The shared adversary for the Quad nations, China, already dominates the global extraction market of the critical minerals required for manufacturing GaN and SiC wafers, especially since these minerals are closely tied to military technologies.
Check these out:
1. Stacking up the Benefits: Lessons from India’s Digital Journey – IMF
2. A method for ethical AI in defence: A case study on developing trustworthy autonomous systems – Journal of Responsible Technology
3. To Be More Precise: BEIDOU, GPS, and the Emerging Competition in Satellite-Based PNT – US Air Force’s China Aerospace Studies Institute
4. Gallium Nitride and Silicon Carbide Fight for Green Tech Domination – IEEE
5. The AI Policy podcast – CSIS
6. India’s ‘One Nation, One Subscription’ plan | Explained – The Hindu
7. Uber isn’t a threat to India’s national security. IAF, Navy withdrawing MoU is overreaction – ThePrint
Thank you for reading Ananta’s Geopolitics of High-tech newsletter. Stay tuned for our next edition.
