In our previous brief, PinnacleOne brought executive attention to the likely future developments of AI’s application to offensive cyber operations.

This week, we focus decision-makers on the ten strategic challenges that will define a new global disorder.

Please subscribe to read future issues — and forward this newsletter to interested colleagues.

Contact us directly with any comments or questions: [email protected]

Classifying AI like nuclear physics secrets. Banning sales of foreign chip products that only tangentially touch U.S. tech. Adding more Chinese chipmaking firms to the Restricted List. Cajoling allies to cut-off more chipmaking tool sales. These are just a few of the recent signs that the Tech War is heating up as the economic and national security stakes drive U.S. policymakers to escalate in the face of increasing strategic challenges.

This ExecBrief identifies ten of these strategic challenges, whose complex interactions will shape a New Global Disorder. Executive leaders and policymakers must reckon with these seismic shifts to the very foundations of international relations, security, technology, and economic power.

1. The Rise of the Authoritarian Axis

The world is witnessing the formation of a powerful axis of authoritarian states, rich in natural resources and boasting advanced defense-industrial capabilities. This bloc of “Eurasian Autocrats” is actively contesting the Western-led international security system and constructing nascent alternative geoeconomic networks. The conflict is increasingly being framed as a struggle between “CRINK” (China, Russia, Iran, North Korea) and “NATO Plus” (NATO plus Australia, Japan, Israel, New Zealand, and South Korea).

This realignment is not just a matter of ideology; it represents a fundamental shift in the balance of power dynamic that held in the Post-Cold War era. Digital fragmentation, policy weaponization, proxy wars, and increasingly aggressive sabotage against private infrastructure and firms should be expected.

2. China’s Technological Ambitions and the Western Response

China’s successful implementation of its civil-military fusion strategy, coupled with aggressive national industrial policies and an intensifying drive to dominate critical scientific and technological domains, poses a significant threat to the national and economic security of Western nations and firms. This challenge goes beyond mere economic competition; it strikes at the heart of Western technological superiority and has profound implications for future military capabilities and economic prosperity.

In response, Western nations, particularly the United States, are taking unprecedented steps to curtail China’s technological advancement. These measures include expanding export controls on advanced semiconductor technologies, adding more Chinese chipmaking firms to the Restricted List, and increasing pressure on reluctant allies to restrict sales of chipmaking equipment to China.

The U.S. has even floated the possibility of classifying AI research as state secrets, reminiscent of the approach taken with nuclear physics during the Cold War. As one National Security Council official privately stated to the founders of a16z, “We classified whole entire areas of physics in the nuclear era and made them state secrets, the theoretical science of physics. We classified them and made them state secrets, and that research vanished. We are absolutely capable of doing that again for AI.”

This hardening stance, however, is creating tensions even among close allies. Japan, South Korea, and the Netherlands, for instance, have expressed reservations about further tightening chip export controls, highlighting the delicate balance between national security concerns and economic interests in the global semiconductor industry.

3. The Vulnerability of Digital Systems

Western societies have become heavily reliant on digital systems that are increasingly vulnerable to cyber attacks. This digital dependency has effectively closed the strategic distance that geography once afforded, allowing adversaries to credibly threaten critical infrastructure and sensitive information from afar. The constant threat of cyber espionage and attack has become a new norm, requiring a fundamental rethinking of national and economic security strategies.

Compounding this challenge is the predominantly private ownership of these critical networks. Unlike traditionally conceived strategic assets, these digital systems are often outside direct government control, creating a complex landscape for national defense. Adversaries like China have demonstrated both the intent and capability to exploit these vulnerabilities, potentially holding entire sectors of Western economies and societies at risk. This new reality has profound implications for national decision-making, forcing leaders to consider the potential for devastating cyber attacks intended to disrupt both military operations and catalyze a social crisis.

Moreover, the ability to cause significant damage through cyber means is reshaping concepts of deterrence and the laws of war. Traditional notions of proportionality and attribution are being challenged in a domain where attacks can be launched anonymously and effects can cascade unpredictably through interconnected systems. This blurring of lines between peace and conflict, and between civilian and military targets, is compelling policymakers to reevaluate long-standing principles of international law and warfighting. Private firms may believe they aren’t in the bullseye – this would be a major error.

4. Economic Entanglement with Adversaries

The complex web of global supply chains and economic interdependencies has created an uncomfortable reality: Western economies remain significantly linked to those of their geopolitical adversaries. This entanglement constrains traditional tools of statecraft, making it difficult to impose economic sanctions or engage in other forms of economic warfare without inflicting self-harm. Recent moves to further restrict semiconductor technology transfers to China exemplify the challenges of disentangling these relationships as they impact not only Chinese firms but also Western companies and economies that have benefited from the global semiconductor supply chain.

5. The Strain of Ongoing Conflicts

The ongoing war in Ukraine and the urgent need to bolster Taiwan’s defenses are placing significant strain on Western fiscal positions, armaments, and political cohesion. These challenges are further compounded by persistent flashpoints in the Middle East, which create additional sources of tension and drain resources. The ability of Western alliances to maintain unity and resolve in the face of these pressures will be a critical factor in restoring or unraveling the global order this decade.

6. The Proliferation of Autonomous Systems

The rapid development and proliferation of low-cost, autonomous systems are rendering traditional approaches to export control, homeland security, deterrence, and warfighting increasingly ineffective. These technologies, ranging from unmanned aerial vehicles to artificial intelligence-powered cyber tools, are changing the nature of conflict and challenging long-held assumptions about military superiority and strategic stability. We are in the era of the “killer drone”, where a $10 mine strapped to a $10 dollar UAV can find, fix, and finish a mobile ground target on the battlefield. Proliferation risks from mass UAS manufacturing that bring this capability to the world are a major new concern.

7. The Pace of Technological Disruption and the Race for AI Dominance

Emerging disruptive technologies are creating societal and security impacts on a scale and at a pace that outstrips traditional policymaking and sensemaking processes. From artificial intelligence and quantum sensors to biotechnology, advanced materials, and new energy tech, these innovations are reshaping industries, altering social dynamics, and creating new security paradigms faster than governments can respond.

The race for AI dominance has become a particular focal point with some policymakers advocating for extreme measures to maintain Western technological superiority. The apparent threat to classify AI research as state secrets underscores the perceived stakes in this technological competition. The emergence of global players in this new Digital Great Game only further complicates the strategic implications.

8. The Rise of Tech Giants as Quasi-Sovereign Entities

Hyperscale, multinational tech platforms have emerged with unprecedented global visibility into private digital systems and the capability to offer sovereign-level cyber defense and digital support to states in crisis. These tech giants are increasingly playing roles traditionally reserved for nation-states, blurring the lines between corporate and governmental responsibilities and raising questions about accountability and governance in the digital age.

The global tech stack run by Microsoft, for example, was critical to both the strategic defense of Ukrainian sovereignty and the strategic compromise of U.S. and corporate networks. States now have to reckon with a fundamental shift in the balance of power between these new lords of digital space and the legacy Westphalian territorial political system.

9. The Emergence of Powerful Non-State Actors

Relatedly, we are witnessing the rise of independent, privately-resourced, non-state actors with the intent and capability to conduct quasi-sovereign activities. These range from mass production of unmanned aerial systems and deployment of resilient low Earth orbit satellite communications to space-based observation, geoengineering, mass information operations, and even private political warfare and coups in weak states. The ability of these actors to operate outside traditional state frameworks poses new challenges for international law and governance, and complicates the risk landscape for global enterprises.

A bit outside the present Overton Window is the potential for more exotic revelations coming out of the U.S. on the topic of Unidentified Anomalous Phenomena. Senator Mike Rounds (R-SD) recently introduced an updated version of the Unidentified Anomalous Phenomena Disclosure Act (UAPDA) as an amendment to the FY 2025 National Defense Authorization Act, with Senate Majority Leader Chuck Schumer (D-NY) as lead co-sponsor. An almost identical bill was introduced last year with several senior co-sponsors, but key portions were watered down by the House in Conference Committee.

The UAPDA is worth reading in full, but we’ll note that it references “non-human intelligence” fourteen times and includes a section titled: “SEC.10. DISCLOSURE OF RECOVERED TECHNOLOGIES OF UNKNOWN ORIGIN AND BIOLOGICAL EVIDENCE OF NON-HUMAN INTELLIGENCE.” While this isn’t presently considered a serious topic in most boardrooms, it is a very serious topic under active discussion among certain cleared Members of Congress and Executive Branch officials. And, it could get more serious, very soon.

10. The Ascendance of Strategic Middle Powers

Middle powers — particularly countries like Saudi Arabia, the United Arab Emirates, and India – are gaining geopolitical heft and pursuing independent technology, economic, and security strategies. These nations are increasingly able to play both sides of the great power competition, seeking asymmetric national advantages. Their growing influence and strategic autonomy add another layer of complexity to an already intricate global chessboard.

The “Decisive Decade” Rushes Ahead

The international system is undergoing a profound transformation. The traditional boundaries between state and non-state actors, between digital and physical domains, and between economic and security concerns are blurring. The pace of change is accelerating, driven by technological innovation, shifting power dynamics, and the prospect of exotic revelations.

The intensifying technological competition, exemplified by the semiconductor export controls and the potential clampdown on AI research, represents a new front in great power rivalry. These measures, while aimed at preserving national security and technological superiority, also risk fragmenting the global innovation and policy landscape and potentially slowing overall technological progress.

For policymakers and executive leaders, the mandate is clear but daunting:

• Maintain technological edge without stifling global innovation;
• Strengthen alliances while respecting diverse national interests;
• Build economic resilience without retreating into protectionism;
• Develop agile governance frameworks that can keep pace with technological change;
• Balance security imperatives with ethical considerations and democratic values; and
• Expect, and prepare, for the unexpected.

We’ll keep our eyes on the horizon and continue to update you on what we see coming.