This article was published alongside the PWH Report “The Future of Artificial Intelligence Governance and International Politics.”
Introduction
The prevailing discourse on artificial intelligence (AI) and geopolitical rivalry focuses on strategic enablers like compute, energy, talent, and capital. But as states race to develop increasingly advanced AI systems, including the potential of creating artificial general intelligence (AGI), one vital enabler is often neglected in these conversations: bureaucracy.
For most people, the idea of bureaucracy brings to mind red tape, imposing government buildings, and Kafkaesque procedures and paperwork. This common mental image has led to the mistaken belief that bureaucracy is opposed to the development and implementation of AI.
The truth could not be more different. Bureaucracy will play a crucial role in determining which countries ultimately become leaders in the AI era. Strong, capable, and effective bureaucracies will be essential to guide countries through the emerging AI era whether that involves planning and executing moonshot initiatives like doubling a country’s energy generation capacity or managing an economy significantly disrupted by technological advances.
States that can effectively leverage AI and transform internal processes, structures, and talent requirements will gain significant advantages. The new generation of AI-enabled bureaucracies will be more efficient and effective, and they will also play a key role in guaranteeing security and prosperity. Defence, increasingly, will rely on governments that can make better decisions faster and deter others in the process.
As AI becomes essential to government operations, covering daily operations and national security, nations will aim to shape AI use by establishing standards, systems, or frameworks to gain strategic advantages. States with competent bureaucratic operations will lead these efforts, forging alliances and promoting their visions for what the AI-enabled future should look like.
In this contest, it is not only the United States and China competing. Although these two countries remain the clear leaders at the technological frontier, the European Union (EU) and India are also competing on the global stage. The outcome of this competition will determine which countries can ultimately set the rules for the future, and whether they will be democratic or authoritarian.
Why Bureaucracy Matters
Since the earliest state formations during the Qin dynasty, bureaucracy has played a crucial role in supporting state power, enhancing military effectiveness, and improving operational efficiency. This is why, for centuries, bureaucratic organizations have continued to exist: they work. Bureaucracy has both propelled technological innovation and been reshaped by new advances.
With each innovation and transformation adopted by bureaucracies, progress followed. Militaries grew ever larger, supported by improved recruitment, operations, and logistics. States became more complex, capable of protecting and providing for increasing populations and larger economies. Innovation accelerated as states created the conditions for industry to thrive and as they sought to manage the growing complexity of the states they oversaw.
Power, technology, and bureaucracy are highly intertwined. Advances in AI, therefore, present a new opportunity for bureaucratic reform, marking the next step in transforming how our governments operate and how states function. It may be tempting to picture a future characterized by increasingly sophisticated AI systems that render government bureaucracy unnecessary, but this is not the reality we face.
Our societies are already complex, global, and more interconnected than ever before. The increasing use and diffusion of AI, along with the possible development of AGI, will only add to that complexity. The truth is that, today, the state and bureaucracy still matter, perhaps more than ever.
AI, Bureaucracy, and Global Competition
As the world returns to an era defined by great power competition, hard power, and spheres of influence, leading at the frontier of AI innovation will remain essential. But it is the states that are best able to transform their bureaucracies with AI, build new tech alliances, and export these solutions to the world that will grow in power and influence.
This competition is already underway, and it is beginning to gain momentum. Writing in 1997, then-U.S. Vice President Al Gore stated that the goal of using technology to transform government should not be to “automate the old, worn processes of government” but rather to see technology as the “great enabler for reinvention.” Over the following decades, governments worldwide have dedicated substantial resources to developing new “E” or “digital” governments to “reinvent” what government is and does. Those who made early investments have been able to exert influence on the development trajectory for many others.
These investments have increased after the COVID-19 pandemic, which demonstrated that digital governments were more resilient, and due to the growing interest in the capabilities of general-purpose AI models. Recent digitalization efforts have accelerated longstanding quantification and data analysis in government, laying the foundations for harnessing the potential of AI.
Emerging Strategies
AI will impact and transform how bureaucracies operate. What they will look like and how they will operate is not yet decided. There is still ample opportunity for states to build and design a future that provides them with strategic geopolitical advantages.
Today, there are four clear players in this space: the United States, China, the European Union, and India. Each actor represents a different view on what the world’s AI-driven future should look like.
The United States remains at the forefront of AI. It provides the capital, hardware, energy, and compute necessary to train the world’s largest AI models. It was American companies that drove the current AI paradigm, and American AI companies are likely to continue leading at the frontier. To maintain this position of dominance, the country has worked to protect its lead by denying its adversaries the ability to train similarly large frontier models through export controls.
To expand its global influence, the Trump administration has adopted a strategy of promoting AI, providing the world with access to its AI models and, in some instances, access to related hardware. What the country lacks, however, is a clear vision for what the future of an AI-enabled bureaucracy looks like. This is complicated by the country’s federal nature and by population-level beliefs about what the government should and should not be able to do.
China has the second-most competitive AI ecosystem in the world. Though it’s access to American graphics processing units (GPUs) remains restricted, it is rapidly building out its own domestic capabilities to manufacture the necessary chips for training AI models at the frontier. Even with this disadvantage, the country is home to the world’s largest concentration of AI talent. The government has made leading in AI a national priority, and a robust technology ecosystem has led to the creation of the majority of the world’s leading open-source AI models.
In contrast to the United States, China has an incredibly effective domestic digital government and digital society that enjoys high public support due to the safety and security it provides. Perhaps, more importantly, China also has experience exporting this technology stack to the world with great success, especially its smart city technology. Interest in China’s solutions and how AI can be integrated within them is growing. This trend is unlikely to reverse.
The EU is home to many of the world’s leading digital governments, with countries such as Estonia and Denmark topping international rankings. Yet, the EU lacks its own competitive domestic AI champions and is entirely dependent on the United States for most of its technology needs. To maintain influence, regulation was used to rein in and control what international technology companies could do within European borders. The emerging “Brussels Effect” saw European regulations adopted globally, leading the EU to often be referred to as a “regulatory superpower.” This approach has been under fire by the current American administration.
Yet, it is precisely Europe’s regulatory approach that has positioned it to shape the future of AI-enabled governments. The EU has excelled at rolling out interoperable and cross-border digital identity systems, data exchange networks, and digital service delivery across its entire membership. As a result, it represents a large population, with strong foundations for transforming government with AI, and a history of global adoption of its standards.
At present, the bloc is undergoing a period of reform, driven by the war in Ukraine, a shifting geopolitical landscape, and a rapid decline in its global competitiveness and productivity. Part of these reforms is dedicated to reimagining the EU as a global digital superpower and enhancing its engagement with the international community. The success of these efforts will significantly shape the future of the world’s AI.
Finally, India has embarked on one of the world’s most successful digital transformation programs to date. The country has developed the means to provide digital services to its entire population. This approach, based on what is known as the “India Stack,” was grounded in the principles of open-source technology, interoperability, and “digital public goods” (DPGs). The goal was to develop solutions that could be applied quickly, openly, and at scale in any country worldwide.
The model is effective. Many developing countries have adopted solutions based on Indian technology in the digital government sector. India has been successful in selling this vision, and international organizations such as the United Nations have thrown their weight behind the importance of investing in and providing DPGs.
While India lacks its own domestic AI model champions, it is home to a large pool of technical talent that actively uses open-source AI models. When combined with the country’s support of DPGs, an active ecosystem is emerging that can drive innovative solutions that can be adopted cheaply by any government worldwide.
Future Scenarios
The operation and functioning of future bureaucracies will heavily depend on the success of the actors mentioned above in executing their strategic visions. Although much of the public discourse focuses solely on the United States and China, developments in Europe and India remain important. There appear to be three plausible future scenarios.
In the first scenario, the EU achieves its goal of becoming a global digital superpower, and the United States effectively invests in the digital infrastructure of its bureaucratic organizations. Working together, the United States would supply technological infrastructure, capital, and expertise, while the EU would contribute its knowledge in developing interoperable digital foundations for governments. This strategy would allow the alliance to export its shared solutions worldwide and, in doing so, establish an ecosystem governed by rules and standards that would encourage the global community to adopt them, thereby limiting China’s efforts to expand its influence in the same area.
In the second scenario, the United States withdraws from its global commitments and focuses mainly on closed-source frontier AI systems, which it is reluctant to share with the world. In this scenario, Europe and India, possibly alongside China, could offer the world an alternative based on the widespread adoption of open-source AI solutions for government. Although these solutions would likely lag behind those of the United States, by leveraging the expertise of the three actors, they could facilitate a rapid enhancement of many governments’ capabilities worldwide.
In the third scenario, the United States withdraws or fails to make the necessary investments in digitalization, and the European Union falls short of its ambitions to enhance its digital strength and competitiveness. The outcome is that China advances rapidly, developing infrastructure for most of the world’s digital governments. This scenario would result in a world more aligned with authoritarian values, but would likely also be highly effective and efficient.
Conclusion
The competition to design the bureaucracies of the future, with AI at their core, is an important contest. The outcome will shape whether the future leans more towards democracy or authoritarianism. It will influence how each interacts with the surrounding world. The architects of this future will solidify their power and influence. The technology exists; this transformation is inevitable. AI will fundamentally transform how bureaucracies operate, function, and look.
What remains uncertain is who will be responsible for designing them. The United States and China will continue to lead at the frontier. Still, success will largely depend on their engagement with other global players, such as the European Union and India. As each side works to promote its vision globally, it must also lead by example, transforming its own bureaucracy and demonstrating to the world what is possible.