What Does It Take to Be an AI Leader? Five Factors in Which Countries Compete for Global AI Leadership

Countries across the globe are seeking to harness benefits from AI technologies whole managing the associated risks. A global “race” for AI leadership as emerged, particularly between the United States and China. But what does AI leadership actually look like? An assessment should be based on a five-factor model that takes into account different areas in which countries compete for global AI leadership: 1) economic power and private sector strength, 2) innovation and thought leadership, 3) adoption, 4) regulation and governance, 5) tech diplomacy. While the United States and China dominate through economic scale and infrastructure investments requiring hundreds of billions in funding, smaller economies, such as Japan, can establish meaningful AI leadership positions by leveraging alternative strengths. Innovation can occur through smaller, specialised models rather than only large-scale developments. Successful adoption and integration of AI technologies, effective governance frameworks balancing innovation with risk management, and strategic tech diplomacy all contribute to AI leadership.

Paper produced in the framework of the 2025 edition of the EU-Japan Symposium, entitled “A Changing Economic Security Environment: Examining Developments from Europe to Japan and the Indo-Pacific”.