Over the next decade, the world’s superpowers will compete on two planes: AI and supply chains.
While the two areas may seem disparate, they’re actually quite connected, and the race to revolutionize both will define the geopolitical and economic landscape for the next generation.
We’re already using AI to trace the source of cotton in textile supply chains. We’re using AI to stamp out modern slavery in auto supply chains. And we’re using supply chain risk management tools to thwart cyber-attacks against AI companies.
Governments, militaries and corporations have been awakened to the urgent need to understand and wield AI and supply chains by recent global events, including the pandemic, Russia’s invasion of Ukraine and the intense deterioration of U.S.-China relations.
These episodes have demonstrated what’s at stake in today’s highly interconnected world – where the slightest disruptions reverberate across the industrial base with incredible consequences for national security and domestic GDPs.
Supply chain visibility has evaded governments and industries alike
Modern supply chains are fraught with complexity. Forty-five percent of companies say their supply chains have been “significantly” disrupted in recent years. Sixty-one percent of logistics managers say their supply chains aren’t operating normally and nearly one in three don’t expect them to until 2025 or later. Government CSCOs say supply chain disruptions are their top challenge.
And while we’re not seeing ports being overrun anymore or the Suez Canal being blocked for days, we are witnessing a concerning evolution of supply chain complications.
CBP has seized roughly $1 billion in goods under the Uyghur Forced Labor Prevention Act. Regulators are struggling to achieve transparency in the face of Chinese blocking statutes. And consumer demand for goods remains stubbornly high even in the face of inflation.
AI advancement has outpaced expectations, and even created anxiety
At the same time, the attention around AI’s advancement has reached a fever pitch that has enveloped not only the boardroom, but also consumers, NGOs, militaries and governments.
Platforms like ChatGPT have captured the public consciousness – and stoked fears in the labor market – while experts warn of an unprecedented new era of technical capability.
The general discomfort around the eerily lifelike results produced from generative AI, whether it’s human-like conversations or highly accurate visual content, is telling. This dissonance brings to light how ill-prepared we are to absorb the coming paradigm shift in automation.
Governments are rushing to stand up an accompanying regulatory regime
Recognizing that the proliferation of complex supply chains and the acceleration of AI innovation bear enormous consequences for national security and the industrial bases they depend on to drive economic growth, governments are trying to accelerate the historically lengthy process of investigating and regulating emerging areas.
We’re witnessing the real-time rapid maturing of a global regulatory regime that already includes UFLPA, the German Supply Chain Due Diligence Act, NDAA’s Section 889 and Section 5949, Canada’s Modern Slavery Act, and the CHIPS Act.
The proposed FY2024 NDAA language, for example, acknowledges the need for better supply chain resilience and the role of AI in achieving greater visibility. And just this month, the European Parliament approved the landmark AI Act.
Tomorrow’s superpowers will recognize the interdependence of supply chains and AI
Rather than treating supply chains and AI as separate, the winners of the race to modernize will be the countries that understand the connectivity between the issues and leverage one against another to drive greater innovation, efficiency and security.
To put it simply, supply chain management is good for AI.
AI – the companies that develop it and the platforms it runs on – has its own software supply chain. The vast majority of AI tools are composed of multiple open-source functions, libraries and repositories, like LEGO blocks formed to create unique structures. Tech developers are reliant on this enormous ecosystem of open-source-code. And the software built using these code libraries and repos is running major production lines, dictating the way people consume information and orchestrating physical processes.
This vital ecosystem is vulnerable to cybercriminals as recent GPT malware attacks demonstrate. To secure AI tools, we must be able to secure the software supply chains that underpin them.
AI is good for supply chain management too.
Today’s supply chains simply cannot be managed without AI. The data and analysis required is too cost-, time- and labor-intensive for any company or government to bear. AI is already being successfully deployed for supply chain logistics acceleration, freight tracking and fuel efficiency.
But more advanced capabilities are required to unlock the ability to manage supply chains proactively and adaptively. These capabilities will be essential for the military – as we saw with production line disruptions and runs on military equipment for Ukraine. They will also be essential for the world’s biggest corporations. Consider a category leader like Walmart: They’ve built up an impressive ability to get goods on their shelves, but they’re ill-equipped for a trade balance that’s less reliant on China.
Future economic prosperity is impossible without AI and supply chain modernization
Today’s superpowers are at a blockbuster inflection point. Like the space race of the 1960s, the AI-supply chain race will be transformative for the world stage. The stakes couldn’t be higher: Governments that invest in a domestic agenda to modernize supply chains and AI will seize global economic market share and influence.
Governments’ approaches – for better or for worse – will have an inextricable impact on the commercial entities that drive their country’s GDP. The greatest companies of the future will reside in the countries that foster the most innovative approaches to supply chain and AI. And where the greatest companies lie, there too lies the greatest economic might.
The views expressed here are the writer’s and are not necessarily endorsed by Homeland Security Today, which welcomes a broad range of viewpoints in support of securing our homeland. To submit a piece for consideration, email editor @ hstoday.us.
