The most advanced AI chips contain hundreds of billions of transistors and parts only a few atoms thick, where 'a speck of dust' can ruin hundreds of thousands of dollars' worth of product. Only a handful of companies globally can produce such chips, transforming what was once niche manufacturing into a matter of national security.
NVIDIA CEO Jensen Huang has described the AI industry as a 'layered cake': an international ecosystem of chips, data, energy, models and applications. Each layer depends on the others — models need data and compute power, computing requires chips, chips operate in data centres, and all of it needs energy.
'There are so many enormously valuable layers of the tech stack, spread across "niche superpowers" in the Asia Pacific, and companies playing with them,' said Robyn Klingler-Vidra, an AI political economy expert who authored a new report on key Asian players. 'The user interface — ChatGPT, Claude — is really just the tip of the iceberg.'
The dispersion of critical capabilities means no single country controls every layer, creating a dynamic where geopolitical competitors are often forced to rely on each other. This interdependence has prevented any one nation from dominating AI while simultaneously making conflict more costly.