AlphaGeo's Parag Khanna On The New World Order

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00:00We keep talking about this bifurcation, U.S., China, the trade tensions ongoing.

00:04Is this a bipolar world or are there more players that we should be aware of?

00:08Well, the bipolarity is an assertion, has gained new currency after Donald Trump's recent visit to the region

00:15where he, before his meeting with Xi Jinping, said, we are in a G2 world.

00:20And that was viewed as some kind of a tacit or explicit recognition that now the world is not necessarily in a new Cold War,

00:26but that there's two powers that are head and shoulders above the rest.

00:29But I want to actually step back for a moment.

00:31And before he met with Xi Jinping, he landed in Kuala Lumpur and he did that dance at the airport,

00:37just to remind everyone where we are in the news cycle.

00:39That was a couple of weeks ago.

00:40But afterwards, he signed a deal with Anwar Ibrahim that related PM Anwar of Malaysia about rare earths, for example,

00:47among other things, because Malaysia is a major destination for semiconductor investment and so forth.

00:52And PM Anwar was asked a couple of days later, do you feel intimidated by Donald Trump?

00:56Were you kowtowing to Trump because of his assertiveness of America first and all the tariffs?

01:01And he said, if I was intimidated by President Trump, why would I have signed a deal with China the very next day?

01:08And this is a reminder that countries like Malaysia are practicing multi-alignment.

01:12They don't view the world as being only two choices.

01:14They want to deal with everyone.

01:15It's about looking after their own interests, right?

01:18When it comes to AI, though, we have to talk about that.

01:22What is your sense of how these different countries are approaching that in terms of competitiveness and building their workforce?

01:29So AI becomes one example among many when it comes to the suite of technologies that will dominate the early 21st century or beyond,

01:37whether it's AI, robotics, biomedical, energy, and so on.

01:41They're not viewed as a package.

01:43It's one by one by one.

01:44And in the same way that a country might be deciding who am I going to have a trade partnership with,

01:48who am I going to buy defense equipment from, who's going to launch my satellites,

01:52who am I going to buy medical equipment from, which stock exchanges am I going to list with,

01:56technology falls into that same pattern where a country, from its perspective, says,

02:00who's going to give me the best deal?

02:02Am I going to have China build my high-speed rail or Japan build my high-speed rail or a European country build my high-speed rail?

02:07Same thing with AI.

02:08No wonder we're seeing more countries wanting to build out that AI ecosystem, including, of course, India,

02:14and talking about standing up to President Trump, Prime Minister Modi really playing a big part.

02:17So when we talk about AI, it's sovereign AI, is what you're often hearing is the prefix, which is, I want my own AI.

02:24Now, of course, we know from an economic standpoint that's going to lead to overcapacity, this excess capex, some redundancy.

02:30But, you know, the new post-COVID mantra, in a way, is let's have that sufficiency, self-sufficiency.

02:36And also in a tariff world, in a fragmented world, in a world of geopolitical competition,

02:40you want to ensure that resiliency of your own supply chains.

02:43That applies to AI, too, because you also have the data privacy issues.

02:46So India is a big player in this because technology is diffusing rapidly.

02:50India is hugely technologically capable.

02:52It effectively has a sovereign stack, to be clear.

02:55Their payments, their identity systems are used by 50 countries in the world.

02:59When we talk about the world being divided between the U.S. and China in technology,

03:03aren't we kind of missing something when you forget that there are 50 countries that are using India's open source,

03:08non-invasive, non-surveillance, right, from a friendly country?

03:12And that's just the beginning of what is going to be a diffusion of technology.

03:16And it'll be a marketplace, just like any other good that you are trying to procure.

03:20You can choose from many powers to provide it.

03:22And the thing about it is also India has the talent to build all of that up.

03:26So I wonder, what is your sense of, among the governments, I know you've visited, what, 150 countries?

03:32Or so.

03:33Whom are the ones that are getting it right and attracting the right talent?

03:38This is the big question because, you know, the world population is peaking,

03:41and we can have a separate conversation, but you know that's underway, and it will decline soon.

03:45And so the war for young talent is, to me, the operative principle.

03:48If you want to determine which countries are going to succeed and fail in the future,

03:52you literally just need to follow young people as they vote with their feet.

03:55And even though Europe, for example, has a dearth of really credible, high-end software engineers,

04:01they're recruiting them en masse from India.

04:03And when Trump instituted those H-1B visa surcharges, the German government took to social media in India and in the U.S.

04:12and even Canada and said, if you're worried about the stability, come to Germany.

04:16And that's not what you think, that's not what you hear day to day out of European politics.

04:20You hear about populism and xenophobia.

04:22Instead, actually, the ground reality is a heavy recruitment push to bring young tech talent from Asia in general, from India in particular.

04:31On the flip side, then, are we seeing the supremacy of America sort of fading,

04:35given some of the policies that this administration is implementing?

04:38Well, you know, the headline you've given to this summit is actually the future of Asia in an America-first world.

04:44And my recommendation was actually call it the future of America in an Asia-first world.

04:49Because the subtext to all of this is that Asia has done the best job of integrating economically.

04:54Think about the Regional Comprehensive Economic Partnership, which came into effect three years ago.

04:58The trade volumes between just China and ASEAN, the Association of Southeast Asian Nations,

05:03is going to reach about $1 trillion this year.

05:07So if you think about Asia as a mega region comprising China, Japan, Southeast Asia, India,

05:13even the West Asian countries in Australia, this is by far the largest trade zone on Earth.

05:17It needs the rest of the world much less than the rest of the world needs Asia.

05:21These are also economies where there's immense inequality.

05:24Then you bring in AI as a sort of great equalizer.

05:27Is it really going to be that?

05:30I think when you think about Asia and growth, it's both and and not either or.

05:35Right now, when you have very mature economies that already have high employment

05:38and you have rapid technological displacement in the services sector, that's problematic.

05:43And that's why you're seeing that, you know, graduates of American colleges and universities aren't finding jobs.

05:48In Asia, there's tons of jobs in the real economy, in construction, in all of these sectors

05:53that don't necessarily are going to be displaced by AI anytime soon.

05:57I'm told we're out of time, so super quickly.

05:59But I really want to ask, these economies in Asia are also very idiosyncratic.

06:03They have cultural barriers.

06:05They also have historical, territorial issues among themselves.

06:08Can they overcome that?

06:10They have so far.

06:11I mean, we're 35 years on from the end of the Cold War, from the collapse of the Soviet Union.

06:15And in fact, Asian countries have done a good job of pushing their geopolitical rivalries somewhat to the side,

06:21although they're still very live and dangerous, but focusing on a geoeconomic convergence

06:27that I was just mentioning earlier.

06:29And that is still underway, especially in response to Trump's tariffs.

06:33So even rivals in Asia have said, you know what, we definitely find mutual benefit

06:37in trading more with each other, even if we don't like each other.

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