overview
The global AI race is led by the US and China, but small groups of countries are leveraging AI to ensure autonomy, enhance security and expanding their global impact. From embedding yourself into the global AI value chain to shaping AI governance, these small states demonstrate the strategic use of technology beyond its weight.
Explanation
In recent publications, including Stanford University AI Index Report 2025 United Nations Trade Development (UNCTAD)' Technology and Innovation Report 2025the US and China continue to dominate the headlines of the Global AI Race. Both authority continues to lead in AI model development, private investment, research production and patent applications. But beyond their bilateral competition, small state groups have emerged as key players in AI arenas.
Switzerland and Finland currently host two of the world's most powerful supercomputers, the Alps and Rumi, respectively. Ireland and Sweden place themselves as key hubs for data infrastructure. Singapore is consistently ranked at the top of the Global AI Index. In these small states, AI is more than a tool for economic or technological advancement. It is a strategic asset used to ensure autonomy, enhance security and expand global impact.
Structural constraints and vulnerabilities of small states
Due to structural limitations, small states often rely on greater power for security, markets and technology. This dependency limits autonomy and exposes it to enforcement. This was evident in the 2022 diplomatic row between Lithuania and China, the 2017 lockdown of Qatar by the Arab League, and the 2007 province-linked cyberattack on Estonia. Another example is Ireland, which failed to block the EU's ruling on a tax agreement with Apple.
However, small states are not passive actors in the face of structural constraints and growing geopolitical tensions.
It will become a global AI value chain
By embedding it into key nodes (e.g. infrastructure, capital, talent, etc.), small states can lock themselves into as essential players. The deeper the retention, the higher the negotiation power and the higher the cost of forcing with greater forces.
In this respect, Singapore has established itself as an important AI launchpad for global high-tech companies. While Google has committed more than US$850 million to city-states, Amazon Web Services (AWS) has invested an additional $12 billion (approximately US$9.42 billion) by 2028. Microsoft was co-developed with *Star as a regional initiative. Nvidia launched a regional accelerator, and Alibaba piloted the AI Suite Aidge. Huawei already established a dedicated cloud and AI lab in 2019.
With a heavily invested in digital infrastructure, Singapore hosts more than 25 subsea cables, including two national supercomputers (Aspire 2A/2A+) and more than 70 data centers, as well as the important 21,700km of Sea-Me-WE-6 linking Asia and Europe. The doubled cable capacity further strengthens Singapore's position as a key AI node with a robust infrastructure that allows for fast, low-latency networks.
Similarly, Ireland has established itself as Europe's “Silicon Valley” thanks to its business environment, low taxes, access to capital, and talent pool. Global tech giants, including Google, Meta and Microsoft, are currently based on AI R&D in Dublin.
Switzerland is playing the strength of the pharmaceutical industry and the corporate model. Private sector organizations (e.g., Roche and Novartis), academia (e.g., ETH Zurich and EPFL), and networks of policy makers give Switzerland a powerful lead in basic AI research and the deployment of specialized applications such as AI-driven robotics, medical imaging, and discovery.
Build Indigenous Capabilities
The goal of small states is not to become an AI superpower, but to reduce excessive reliance on external inputs that can be at risk of confusion and elimination. As one local AI developer pointed out, “What happens if the West decides to turn off the model?”
Singapore's National AI Strategy 2.0 is supported by over SG$1 billion (approximately USD$785 million) in public investment focused on building domestic capacity. The company aims to triple the AI talent pool to 15,000 and spread the use of AI among small and medium-sized businesses and individual workers. Finland has developed one of the fastest supercomputers in the world. This strengthens advanced research in a variety of fields in the country. Sweden hosts AI Sweden, the national centre for applied AI that coordinates innovation across the sector, while Denmark pins Digital Dogme, a national alliance focused on AI's ethical and public sector deployment.
AI can also be integrated into the national security system. Estonia pursues a “crat” AI strategy in which AI is built into cybersecurity defenses. In parallel, Singapore has integrated AI into the security architectures across the Ministry of Defense (MINDEF) and the Ministry of Home Affairs (MHA) to enhance national security. The latest division of the Singapore Armed Forces, Digital and Intelligence Services (DIS), integrates a full stack of AI capabilities under one roof to support strategic surveillance, operational simulation and cyber defense.
Formation of global norms and governance
Small states are gaining traction as honest brokers in developing AI governance frameworks. Nordic countries are at the forefront of AI governance and are anchoring their approach to strong commitment to the values and shared values of human rights, transparency, inclusivity and ethical responsibility.
Singapore has partnered with the OECD, the EU and ASEAN to play a key role in global AI governance. Released in collaboration with Rwanda AI playbook for small states (Editing AI Strategy from members of a Small State Forum) Singapore Consensus About AI safety. Through initiatives like AI verificationSingapore, working with like-minded partners, holds its position as a comprehensive convener and norm setter of international AI policies.
Building on the reputation of E-Governance, Estonia hosts the NATO Cooperative Cyber Defense Centre of Excellence, contributing to the EU's discussions on AI policy. Its reliability in digital governance can impact the use of AI in the context of security and public services.
Strategic alignment and attitude
Instead of choosing aspects at emerging technology forks, Singapore employs a flexible partnership strategy. It hosts major US and Chinese tech companies as well. This dual engagement reflects Singapore's practical and unaligned attitude, as seen in the balanced treatment of Huawei 5G participation and Wuxi biology despite US restrictions. By maintaining constructive relationships with both high-tech ecosystems, Singapore avoids intertwining in the competition of major powers, gaining a position as a trusted neutral partner, and gaining “Digital Switzerland.”
Within the EU, Scandinavian countries are in a soft balance. It supports EU AI law while promoting Scandinavian-centric regulations. This gives room to shape EU policies without compromising their own preferences. Ireland has exercised Protocol 21 to partially opt out of EU AI law, with the aim of maintaining regulatory autonomy despite integration into the EU digital market.
Conclusion
As Singapore's Prime Minister Lawrence Wong observed in Davos in the summer of 2025, the world is entering a transition period without a clear new world order. Hard power and the laws of jungle should return, especially during times of danger for small states.
The deployment of AI relies on computing power, chips, talent, energy, and data, resulting in sustained structural asymmetry. Resources concentrated in major powers. Some people try to weaponize this interdependence. AI has not leveled the arena, but has opened a new space for its agents.
But the small state is not a passive actor and “doesn't do anything.” Instead, they are dressed in key global nodes, building local capabilities and working with like-minded partners to shape an inclusive international norm. Small countries are learning to use AI as a multiplier of power to ensure autonomy, enhance security and expand influence.
In this evolving landscape, the most strategic actors are not necessarily the biggest, but they are those who can strategically use technology to form results beyond their weight.
About the author
Pong Soon Soon is a doctoral student at S. Rajaratnam School of International Studies (RSIS) at Nanyang Technological University (NTU) in Singapore. His research examines how small states can leverage artificial intelligence to exercise agency, navigate large competition and thereby promote strategic benefits.
