This digital divide is not just about access to technology but also about the ability to harness AI’s potential for economic, social, and global political empowerment. The implications of the AI divide are leading to a tech race that impact geopolitical power dynamics, exacerbating competition major powers like the US, China, France, and India. Depending on how the race ends, it could swing the balance of power in a negative direction.

AI Paris Summit

The recent AI Action Summit held in Paris emerged as a pivotal event that highlights both the opportunities and challenges associated with this evolving AI tech race. This summit serves as a beacon of innovation, encouraging France and India to collaborate more closely, while also exposing the complex interplay of international reactions, particularly from major powers like the United States, United Kingdom (UK), and China.

The summit focused on expanding AI’s boundaries while respecting environmental and ethical obligations. France’s President Emmanuel Macron reaffirmed his nation’s commitment to AI innovation, while maintaining high regulatory standards that draw parallels to Notre Dame Cathedral’s restoration. Such a strategy will likely accelerate AI ventures and foster innovation.

However, the regulation proposed was also a noose around the neck of the summit’s emphasis—deregulation. It is worth considering whether drastic deregulation will lead to genuine advances or the weakening of certain crucial safety nets as the world grapples with how to handle ever expanding data and the fragmentation that result from the intersection of geopolitical interests and the private ownership of data and capability. The US and China approach the issue differently than Europe, whose adoption of the AI Act (2023) will see the first comprehensive AI regulation in the world.

Many wondered how agentic AI will impact the balance of power. Whether AI will have a net positive or negative effect is uncertain. The rate at which agentic AI is developed and adopted in the three main economic blocs of China, Europe, and the United States will determine much.

India-France AI Alliance

India and France are forming a partnership to leverage AI’s full potential globally, sharing knowledge, resources, and best practices to create a robust framework for AI initiatives and global dialogue. During the summit, leaders from both countries addressed how their alliance could facilitate joint ventures, research collaborations, and talent exchange programs. Prime Minister Narendra Modi and President Macron foresaw great potential for future cooperation in 2019 when they endorsed the Indo-French Roadmap on Cybersecurity and Digital Technology. India and France, founding members of the Global Partnership on Artificial Intelligence, aim to develop a safe, open, secure, and ethical AI for human development and global commons.

Global Reactions

As the world watches the developments in Paris, reactions from other global powers, notably China and the United States, added another layer of complexity to the conversation around AI regulation and collaboration. In recent years, both states have invested heavily in AI research and development, seeing it as critical to their national security and economic competitiveness.

China’s approach to AI governance contrasts significantly with that of France and India. While the Chinese government prioritizes rapid innovation with minimal regulatory oversight, this led to concerns about privacy, surveillance, and ethical implications. The US, on the other hand, grapples with debates around data privacy, corporate responsibility, and the potential for AI misuse. As a result, the responses from these two states illustrate differing philosophies about how best to harness AI’s potential while safeguarding public interests.

The US and UK declined to sign a declaration on “inclusive and sustainable” artificial intelligence at the Paris summit, in a blow to hopes for a concerted approach to developing and regulating the technology. The document was backed by 60 other signatories on February 11, 2025, including France, China, India, Japan, Australia, and Canada.

The reactions from the relevant stakeholders highlight the urgent need for international cooperation and dialogue. As AI transcends borders, creating harmonized standards and frameworks could mitigate risks associated with its deployment.

Opportunities and Challenges Ahead

The summit concluded by emphasizing the need for proactive state engagement in AI regulation, prioritizing innovation while protecting individual rights and societal values. This, participants believed, would allow the world to fully capitalize on AI’s benefits.

As the world grapples with the realities of increasingly AI-driven technology, the voices of diverse stakeholders, including technologists, ethicists, policymakers, and civil society must be heard in shaping the future of AI. Under the flag of the AI Paris Summit, the India-France AI alliance is entering into a new and more unpredictable phase. By defying red tape and cultivating a spirit of cooperation, states are setting the pace for unlocking unprecedented opportunities while highlighting the inherent challenges of this transformative technology.

Huma Rehman is a project consultant, consultant, and defense and foreign affairs analyst. She can be reached at X @HumaRehman1.

AI Paris Summit and Emerging Paradox of AI Haves and Have-Nots was originally published on Global Security Review.

Too few Americans contemplate the role of digital currency volatility in acting as a barrier or an enabler to nuclear deterrence. The reality is that there are opportunities and risks that volatile cryptocurrency plays in the strategic calculus of nuclear states.

Cryptocurrency and Geopolitical Shifts

Cryptocurrencies are decentralized and borderless, challenging traditional financial systems and reshaping how states interact economically. Their volatility stems from market immaturity, speculative trading, regulatory uncertainties, and evolution of these ever-changing technologies. Essentially created to prevent intermediaries, like banks and financial institutions, cryptocurrencies lay the foundation for trustless transactions for illicit activities.

This volatile mix of person-to-person transactions and zero oversight introduces both unpredictability and opportunity, raising questions about their implications for nuclear deterrence, which now must deal with a domain that includes ungoverned access to financial streams that can be used by state and non-state actors to engage in elicit behavior that undermines deterrence stability.

Nuclear deterrence relies on a delicate balance of power, with states maintaining assured second-strike capabilities to dissuade adversaries from initiating conflict. This balance hinges on credibility and capability. Cryptocurrencies, with their volatile swings in value, could serve to undermine stability within a country or enable elicit actors to engage in a range of nonnuclear actions that undermine strategic stability.

The Risks of Cryptocurrency Volatility as a Barrier

Cryptocurrency volatility can act as a barrier to nuclear deterrence by creating financial instability and undermining a state’s ability to project economic power. Traditional nuclear powers depend on stable economies to maintain robust defense capabilities, fund deterrence strategies, and support diplomatic efforts. Sharp and unpredictable fluctuations in digital assets can undermine financial stability, weakening a state’s capacity to fund critical defense initiatives.

For the United States, crypto is not a major issue currently. But, for North Korea, who funds its nuclear program through elicit activities, crypto is important. Proliferators also use crypto to conduct activity. Instability in crypto makes illicit activity even more high stakes and unpredictable.

Instability creates advantages for state and non-state actors to exploit cryptocurrency markets for nefarious purposes, such as evading sanctions, financing proliferation, and bypassing traditional financial controls. The decentralized nature of cryptocurrencies complicates efforts to monitor, track, and regulate illicit activities, potentially undermining efforts to prevent the spread of nuclear weapons or restrict financing for state and non-state actors pursuing destabilizing weapons programs.

Cryptocurrency instability also presents a challenge to strategic stability through cyber threats. If critical financial systems or exchanges are disrupted, or if adversaries manipulate markets to harm a nation’s economy, it could create economic shocks severe enough to destabilize deterrence relationships, increase miscalculation risks, or fuel insecurity-driven arms build-ups.

The Darknet and Conflict Escalation

Darknet cryptocurrency markets empower bad actors by offering anonymity and decentralized financial tools, enabling a wide range of conflict-escalating activities. These markets facilitate the purchase of illegal arms, military-grade technology, and hacking tools, often used to destabilize regions and target critical infrastructure (command-and-control systems) through cyberattacks.

Terror organizations leverage cryptocurrencies for anonymous funding, allowing them to finance operations, recruit globally, and expand their influence. Sanctioned entities exploit these markets to bypass international restrictions and acquire resources that fuel aggressive actions.

The ability to transact anonymously with cryptocurrencies also shields organized crime, including narcotics and human trafficking, whose revenues often fund conflict zones and insurgent groups. Covert exchanges on the darknet can increase espionage, destabilize international relations, and provoke hostilities to serve a radically motivated agenda.

In parallel, extremist groups utilize these platforms to spread propaganda, incite violence, and radicalize populations, further destabilizing fragile regions. The combination of anonymity, decentralized systems, and hidden economies presents a formidable challenge for global security efforts aimed at conflict prevention and stability.

Cryptocurrency as an Enabler of Nuclear Deterrence

On the other hand, cryptocurrency volatility also opens new avenues for strengthening nuclear deterrence through financial resilience and innovation. The decentralized nature of digital assets can enable states to diversify their financial resources and reduce dependency on traditional systems that might be vulnerable to adversarial influence or geopolitical tensions. In times of economic crisis or sanctions, cryptocurrencies can provide states with alternative means to maintain fiscal stability, thus supporting their deterrent capabilities. Countering bad activities with good can be as challenging as the reliance on traditional financial stability for positive security assurance.

Furthermore, blockchain technology, which underpins cryptocurrencies, offers potential for transparency, accountability, and verification mechanisms in arms control agreements. By leveraging blockchain, states can create tamper-proof records for tracking nuclear materials, enhancing verification regimes, and building trust between adversaries. The volatility of digital assets may fuel innovation and drive investment into these applications, ultimately strengthening nuclear stability and deterrence structures.

Balancing the Risks and Opportunities

While the volatility of cryptocurrencies poses undeniable risks, it is essential to approach them with a nuanced perspective to find the right balance between risk and reward. Policymakers must strike a balance between leveraging the opportunities that digital assets present and mitigating their risks to global security. Collaborative efforts to regulate and stabilize cryptocurrency markets can reduce the likelihood of financial instability while harnessing the potential of decentralized systems.

In addition, enhanced cybersecurity measures must accompany any state or multilateral effort to integrate cryptocurrency into the financial systems that underpin deterrence capabilities. Protecting digital infrastructure against malicious actors will ensure that the advantages of decentralized assets are not overshadowed by their exploitation for destabilizing purposes.

A New Strategic Frontier

The volatility of cryptocurrency markets is both a challenge and a frontier for instability of nuclear deterrence. While it poses risks through financial instability, illicit use, and cyber threats, it also offers opportunities for financial resilience, innovation, and transparency. In today’s evolving digital environment, nations must adapt to this dual-edged sword, developing strategies that incorporate the volatility of digital assets into a comprehensive approach to deterrence.

Ultimately, whether cryptocurrencies become a barrier or enabler of nuclear deterrence depends on how nations, regions, and regulators in the broader international community respond to this evolving challenge. By advocating cooperation, innovation, and regulation, cryptocurrencies can strengthen global security architectures and contribute to a stable nuclear order—turning volatility into a force for strategic stability and peace.

Greg Sharpe is the Marketing and Communications Director at the National Institute for Deterrence Studies. The views expressed in this article are his own.

The Volatility of Cryptocurrency: Barrier or Enabler of Nuclear Escalation? was originally published on Global Security Review.