Practical AI Governance in 2026: Navigating Geopolitical Tensions, Compliance Gaps, and Systemic Risks

Artificial Intelligence (AI) continues to be a pivotal element shaping global power dynamics, technological innovation, and security frameworks. The rapid evolution of AI technologies, coupled with divergent national strategies and geopolitical tensions, underscores the urgent need for resilient, coordinated governance frameworks. As 2026 unfolds, recent developments reveal both progress and persistent gaps in AI regulation, risk management, and international cooperation—factors that will determine whether AI becomes a tool for global collaboration or a catalyst for systemic instability.

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Evolving Geopolitical Strategies: Diverging National Approaches and Regional Dynamics

The global landscape remains characterized by stark contrasts in how major powers approach AI governance and deployment:

The United States: Emphasizing Permissive Innovation

The US continues to champion a "permissive innovation" model focused on maintaining technological leadership and fostering a vibrant private sector. Recent diplomatic efforts aim to align AI development with economic and strategic interests, with a notable emphasis on collaborations with allies such as India. This approach seeks to avoid technological decoupling, which could undermine the US’s dominance in AI and related sectors.

China: Accelerating Deployment and Military Integration

In contrast, China adopts a deployment-first strategy, rapidly integrating AI into civilian industries and military systems. Reports such as "China AI and Robotics in the Military: Strategy and Geopolitics" highlight China's aggressive pursuit of autonomous weapons and robotic warfare capabilities. This aggressive deployment risks fueling an autonomous weapons arms race, potentially destabilizing regional security and challenging existing arms control norms.

Regional Rule-Making and Resource Security

• APAC nations like Japan, South Korea, and Singapore are actively shaping regional AI standards driven by techno-nationalist policies and supply chain resilience strategies. They aim to assert sovereignty and reduce dependence on Western or Chinese frameworks, fostering regional rule-making aligned with their strategic interests.
• The Gulf States—including Saudi Arabia, UAE, and Qatar—are investing heavily in AI to strengthen domestic capabilities, secure technological independence, and hedge regional rivalries. These efforts are often coupled with diplomatic and security strategies, including seeking US security guarantees amid economic diversification initiatives.

Supply Chain and Critical Resource Resilience

Amid rising geopolitical tensions, securing supply chains—especially around semiconductors and critical minerals like lithium and cobalt—has become paramount. Initiatives from Trump-era policies and subsequent measures aim to diversify sources and build domestic capacities, recognizing that supply chain resilience is vital for sustaining AI innovation in a fragmented geopolitical environment.

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Governance and Compliance: Bridging Implementation Gaps and Managing Risks

Despite the existence of foundational frameworks such as the OECD Due Diligence Guidance for Responsible AI and the EU AI Act, implementation remains patchy across jurisdictions. This results in compliance gaps and liability concerns that threaten to undermine trust in AI systems.

Enforcement and Liability Risks

Recent analyses, including reports highlighted by Forbes, reveal that many organizations are ill-prepared for enforcement realities. With regulatory enforcement intensifying—particularly in the US—regulators and courts are increasingly holding firms accountable for AI-related incidents. This environment compels organizations to embed AI due diligence into daily operations, emphasizing transparency, internal controls, and audit readiness to mitigate legal liabilities and protect reputations.

Federated and Flexible Regulatory Models

• Experts such as Attorney General Mike Hilgers advocate for a federated regulatory approach, combining federal standards with state-level initiatives to achieve coherence while maintaining flexibility.
• Organizations are investing in AI risk management tools, integrating legal safeguards and technical controls into core workflows. Such measures are essential for organizational resilience, compliance, and maintaining public trust.

Operationalizing AI Due Diligence

Effective risk management now involves embedding AI due diligence into routine processes, conducting regular audits, and maintaining transparent reporting. These steps are critical not only for legal compliance but also for reputational stewardship—particularly as regulatory scrutiny intensifies globally.

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The Militarization of AI: Systemic Risks and the Need for International Norms

The militarization of AI remains a core concern, especially regarding autonomous weapons systems and arms race escalation.

The Push for Binding International Norms

Experts emphasize the urgent necessity of binding international treaties to limit autonomous weapons and prevent escalation. Progress remains hampered by diverging national interests, risking a future where unregulated military AI proliferation destabilizes global security. High-level forums such as the AIDEF 2026 Defence Summit have called for multilateral controls to curb unchecked military AI development, warning that absence of binding norms could lead to uncontrollable escalation.

Risks of Escalation and Miscalculation

AI’s integration into nuclear command and contested environments heightens accident and escalation risks. Without binding international norms, miscalculations could trigger conflict in hotspot regions. The recent Pentagon–Anthropic ultimatum exemplifies mounting pressure on AI firms to align with military and national security interests, raising ethical and control concerns.

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Recent Critical Developments and Monitoring Tools

The Pentagon’s Ultimatum to Anthropic

On February 24, 2026, Defense Secretary Pete Hegseth issued a stark deadline to Anthropic, a major AI firm. This ultimatum underscores the growing intersection of military priorities and commercial AI development. The move signals heightened pressure on AI companies to align with defense needs, risking ethical compromises if not managed carefully.

Cybersecurity Warnings on AI-Accelerated Threats

Cybersecurity leaders are raising alarms about AI-fueled threats, including identity fragility, disinformation campaigns, and cyberattacks. According to BTR’s recent report, AI’s rapid evolution compounds geopolitical risks, complicating identity verification and cyber defense efforts. This underscores the urgent need for advanced cybersecurity measures to counter AI-driven threats.

Taiwan’s AI Basic Act as a Regional Model

Passed on December 23, 2025, Taiwan’s AI Basic Act aims to foster responsible AI innovation, protect data sovereignty, and align AI development with ethical standards. Analysts see Taiwan’s comprehensive approach as a potential regional model, balancing technological advancement with security and governance imperatives.

Monitoring and Risk Assessment: The AI-GPR Index

The AI Geopolitical Risk Index (AI-GPR) has become an essential tool for tracking AI-related risks. It incorporates indicators such as technological dependencies, military deployment patterns, and resource competition, providing early warning signals to policymakers and industry leaders. Such tools are crucial for anticipating systemic risks and informing strategic responses.

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China’s Role in Global AI Governance: Divergent Approaches and Influence

Recent insights, including a Chinese research video titled "Global Governance of AI Progress, Challenges & China’s Role", highlight China’s ambitious efforts to shape international AI governance. China advocates for sovereignty-based frameworks emphasizing state-led development, cyber sovereignty, and technological self-reliance.

While the US and Western nations emphasize multilateral, norms-based governance, China pushes for regional and bilateral agreements that reinforce state control over AI. This divergence complicates multilateral efforts and norm establishment, risking fragmented standards and competition-driven development.

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Strategic Outlook: Toward a Resilient and Cooperative Framework

The evolving AI landscape in 2026 reflects a dual trajectory: ongoing progress in governance and standards, contrasted with rising fragmentation due to strategic rivalries. The US-China rivalry continues to influence regional rule-making and military AI development, reinforcing the need for binding international norms to prevent destabilization.

Key Recommendations:

• Accelerate global adoption and enforcement of frameworks like the OECD AI Principles and EU AI Act.
• Bridge compliance gaps through operational risk management and embedding AI due diligence into organizational processes.
• Develop and agree upon binding international treaties to regulate autonomous weapons and prevent escalation.
• Enhance cybersecurity measures to counter AI-fueled threats such as disinformation and cyberattacks.
• Leverage models like Taiwan’s AI Basic Act to foster responsible development and data sovereignty regionally.
• Utilize monitoring tools like the AI-GPR Index to anticipate risks and inform strategic decisions.

Final Reflection

As AI continues its rapid evolution, coordinated international action remains critical. Developing resilient, inclusive, and adaptable governance frameworks will determine whether AI becomes a driver of global cooperation or a source of systemic risk and conflict. The decisions made today will shape global stability, trust, and the ethical trajectory of AI for decades to come.