The race for sovereign AI is intensifying. Here's what you need to know
'Sovereign AI refers to a nation's ability to independently develop, deploy, and govern AI technologies,' the firm explained, emphasising that the model 'ensures strategic control over AI capabilities' without necessarily requiring full government ownership.
The U.S. model blends public-private partnerships with export controls, such as a recent NVIDIA deal directing 15% of its China-bound chip sales to the federal government.
Jefferies told investors that competition is intensifying among major powers. 'China has narrowed its gap with the U.S. to 12 months,' aided by civil-military integration and partnerships with companies like Alibaba and Huawei, according to Jefferies.
The EU's GAIA-X project aims to reduce reliance on U.S. hyperscalers, but 'fragmented regulations' and slower innovation remain hurdles, wrote the analysts.
Middle powers are said to be emerging as 'strategic players.' Saudi Arabia's HUMAIN initiative features the launch of ALLAM, an Arabic-language generative AI model, alongside plans to train one million citizens in AI.
The UAE is focusing on domestic data centers and infrastructure, with both targeting AI independence by 2030–2035.
Jefferies said sovereign AI offers benefits including stronger national security, economic growth, and innovation. Risks include 'high infrastructure costs, fragmented innovation,' data bias from localized datasets, and limited talent diversity.
While the UN could help set global norms on privacy, ethics, and explainability, Jefferies expects 'fragmentation is likely to persist' given geopolitical competition and divergent regulations.
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