AI and Energy: The Twin Pillars Reshaping a Fragmented Global Order
In a world increasingly defined by fragmentation and shifting alliances, two powerful forces stand out as key determinants of future global dynamics: artificial intelligence and energy. As nations navigate a complex landscape of transactional diplomacy and hierarchical power structures, these domains are poised to rewrite the rules of international engagement.
The Fractured Framework of Global Relations
The traditional descriptors of bilateral, multilateral, plurilateral, and minilateral arrangements no longer fully capture the essence of today's world order. The framework of accepted rules has shattered, giving way to what might better be termed "transactionalism" and "hierarchism." International relations are increasingly driven by naked national self-interest rather than ideology or principle. The level of interest in international transactions is now determined by a country's position on the power pecking order, based on military, economic, and technological capabilities.
This reality explains why some conflicts attract scant international attention while others dominate global discourse. The civil conflict in Sudan, for instance, has generated minimal international response, while discussions about Greenland received more attention at Davos 2026 than pressing planetary issues like climate change, poverty, pandemics, and green energy transition.
The Strategic Rivalry Defining Our Age
China and the United States stride the global stage as competing colossi, their relationship characterized by both confrontation and conciliation. While no grand bargain or Thucydidean clash appears imminent, their strategic competition sets the tone for international geopolitics and geo-economics. The rest of the world seeks access to their markets and technology while attempting to avoid being drawn completely into their strategic orbits.
China, in particular, remains what might be called "an enigma wrapped in mystery" for most international observers. Despite numerous China experts and extensive analysis of its strategic intent, genuine insight into its political decision-making remains elusive. This uncertainty ensures that China will remain in the strategic crosshairs of nations worldwide, serving as both benchmark and competitor.
Artificial Intelligence as the New Battleground
Artificial intelligence has emerged as a primary arena for this strategic rivalry. As former U.S. national security advisor Jake Sullivan noted in his Foreign Affairs article 'Geopolitics in the Age of Artificial Intelligence,' fundamental questions persist about China's approach to AI development. Is China truly racing for the AI frontier, or is it allocating resources elsewhere with the assumption it can imitate and commodify later?
This technological competition represents more than just a race for supremacy—it reflects the deeper currents shaping international relations in our fragmented world. The "cold war" between these technological hegemons will likely define international geopolitics and geo-economics for years to come.
Energy Fundamentals in a Volatile World
While technology stocks face questions about overvaluation reminiscent of the dot-com bubble, energy markets tell a different story. Here, fundamentals rather than speculation drive market dynamics. Structurally, global oil supply continues to exceed demand, creating a remarkable stability in oil prices despite numerous geopolitical disruptions.
This stability persists despite the collapse of Venezuela's petroleum industry, sanctions on Russian oil exports, threats of bomb strikes in Iran, and tensions between Saudi Arabia and the UAE. The consequence has been a narrowing competitive corridor between fossil fuels and renewable energy sources.
This corridor may narrow further if predictions about supply constraints for green energy intermediates prove accurate. S&P Global Energy projects a potential 10-million-ton shortfall of copper—often called the "metal of electrification"—by 2040. Such constraints could significantly impact the pace of green energy transition, which remains indeterminate despite growing global consensus about its necessity.
Leadership Transitions and Democratic Questions
As the world navigates these complex dynamics, leadership transitions loom large on the horizon. Many of the world's most powerful nations—including the United States, Russia, China, India, Iran, and Turkey—are led by individuals in their 70s or older. The coming decade will likely see significant leadership changes in these countries, with profound implications for both domestic politics and international relations.
Simultaneously, fundamental questions are being raised about democratic governance itself. The Oxford Union may soon debate a version of Winston Churchill's famous observation about democracy being "the worst form of government except for all the others." Increasingly, observers question whether there remains much practical difference between the democracy practiced by self-proclaimed democratic nations and alternative governance systems, particularly as electoral success increasingly favors campaigns based on identity politics and populist economics.
Looking Ahead in a World of Contradictions
The world presents a tapestry of contradictions—Davos forums promoting dialogue while military tensions escalate, technological optimism coexisting with financial caution, and energy stability persisting amidst geopolitical turmoil. In this fragmented landscape, artificial intelligence and energy emerge as the twin pillars that will shape our collective future.
As nations pursue their interests in this transactional world order, those who master these domains—both technologically and strategically—will likely determine the rules of engagement for decades to come. The narrowing corridor between fossil fuels and renewables, combined with the strategic competition in artificial intelligence, creates a complex matrix of challenges and opportunities that will define our era of fragmented global governance.
