Geopolitics of Compute & Semiconductors

Training frontier AI models requires enormous computational power, and that compute depends on advanced semiconductors - chips that only a handful of companies in the world can design and even fewer can manufacture. This concentration has turned the semiconductor supply chain into a geopolitical flashpoint. TSMC in Taiwan manufactures the vast majority of the world's most advanced chips. ASML in the Netherlands makes the lithography machines that TSMC needs. NVIDIA in the US designs the GPUs that dominate AI training. Each of these represents a potential chokepoint, and governments have noticed. The US has imposed export controls restricting China's access to advanced chips and chipmaking equipment. China is investing billions in domestic semiconductor capability but remains years behind on cutting-edge manufacturing. The CHIPS Act in the US and similar programmes in the EU and Japan are subsidising domestic chip production to reduce dependency on any single country. For your business, this means the cost and availability of AI compute is shaped by geopolitics as much as by market forces. Understanding where your compute comes from - and what might disrupt it - is becoming a necessary part of technology planning.