Scenario Planning: The U.S.-China AGI Competition and the Role of the EU as a Mediator

While Google DeepMind and OpenAI have long dominated the AGI landscape, the introduction of DeepSeek, has disrupted the status quo.

The emergence of Artificial General Intelligence (AGI) marks a transformative era in global technological competition. While Google DeepMind and OpenAI have long dominated the AGI landscape, the introduction of DeepSeek, a Chinese AI company, has disrupted the status quo by demonstrating cost-effective and highly efficient AI development. This shift intensifies the geopolitical rivalry between the United States and China, raising concerns over economic dominance, security risks, and ethical AI governance. As the race toward AGI accelerates, the European Union (EU) emerges as a potential mediator to ensure responsible, ethical, and human-centric AI development.

Why AGI is a Critical Issue

AGI represents the pinnacle of artificial intelligence development, surpassing human cognitive abilities and potentially revolutionizing all aspects of society. Google and OpenAI have long pursued AGI as their ultimate goal, and the emergence of DeepSeek intensifies the race, increasing the risk of reckless development that prioritizes competition over prudence.

Ethical considerations may be sidelined in the rush to achieve supremacy, leading to significant risks such as job displacement, misuse of AI in autonomous weapons, and a lack of control over AGI’s decisions. Unlike nuclear weapons, which are tightly controlled by nation-states, AGI has the potential to fall into the hands of non-state actors, corporations, and even individuals. This raises concerns about catastrophic misuse, with the possibility of an AGI-driven crisis comparable in impact to nuclear events such as the bombings of Hiroshima and Nagasaki.

Unlike nuclear weapons, AGI is not restricted to governments alone. If competition is not carefully managed, the dystopian AI scenarios often depicted in science fiction—akin to the “Terminator” narrative—could become a reality. Unlike nuclear arms, which are tightly controlled by governments, AGI could be developed and deployed by private entities or even individuals. This accessibility amplifies the risk of AGI misuse, potentially leading to autonomous systems acting beyond human control. Without prudent governance, the escalating AGI competition could result in unforeseen, large-scale consequences with global ramifications.

DeepSeek’s Disruptive Entry and Its Impact

DeepSeek has gained significant traction by leveraging an open-source approach and optimizing resource efficiency, requiring far fewer GPUs and significantly lower costs compared to its Western counterparts. This unexpected breakthrough has shocked the global AI community, particularly as it occurs amid U.S.-led semiconductor embargoes and restrictions aimed at stalling China’s AI advancements.

Despite these limitations, DeepSeek has managed to circumvent key technological barriers, demonstrating China’s ability to develop cutting-edge AI independently. This innovation challenges the established dominance of U.S.-based AI entities such as OpenAI and Google DeepMind. With China’s strong government support for AI development, DeepSeek’s presence fuels strategic tensions, leading to three possible scenarios in AGI competition:

Scenario 1: Chinese AGI Leadership

In this scenario, DeepSeek surpasses its U.S. competitors through continued innovation, government backing, and open-source community engagement. China achieves technological leadership in AGI, granting it leverage in setting global AI standards, influencing international markets, and establishing dominance in AI-driven industries. The economic and security implications would be profound, potentially shifting global power dynamics in favor of China.

Scenario 2: Multipolar AGI Landscape

Here, DeepSeek establishes itself as a key competitor without fully surpassing OpenAI and Google DeepMind. The AGI market diversifies, with the U.S. maintaining its technological edge while China narrows the gap. This scenario encourages collaborative initiatives, joint research programs, and regulatory dialogues among AI leaders, fostering a balanced yet competitive AI ecosystem.

Scenario 3: U.S. Retains AGI Supremacy

If DeepSeek fails to sustain its momentum due to limited access to high-quality training data, regulatory restrictions, or strategic countermeasures from U.S. firms, OpenAI and DeepMind will continue to dominate. This scenario maintains Western hegemony in AGI, but at the cost of increasing AI-related geopolitical tensions and a potential technological cold war.

The Role of the EU in Mediating AGI Governance

As the U.S. and China escalate their AI competition, the European Union is uniquely positioned to act as a global mediator, advocating for ethical AGI development. With its stringent AI regulations and the Artificial Intelligence Act, the EU has established a structured approach to governing AI risks while ensuring transparency and human oversight. Its strong emphasis on ethics, including AI fairness, security, and human rights, further reinforces its commitment to responsible AGI advancement.

Moreover, the EU’s experience in facilitating international agreements and technology governance strengthens its credibility as a mediator. Its active role in shaping AI policies through multilateral discussions and partnerships underscores its ambition to lead global AI regulation. By promoting ethical AI practices and fostering global collaboration, the EU can help steer AGI development toward a more inclusive and human-centric future. Several key initiatives the EU can undertake include:

Establishing a Global AI Governance Framework:

The EU can use its AI Act and collaborate with global organizations like the UN and OECD to develop a unified AGI regulatory framework. These platforms help build international consensus, allowing the EU to influence AI ethics, governance, and risk management. Through the UN, the EU can integrate AGI into the Sustainable Development Goals (SDGs) under Sustainable AI, ensuring AGI serves human welfare, fairness, and long-term stability. The OECD’s role in economic and technological policymaking further enables the EU to shape AI standards that balance innovation and responsibility.  By embedding Sustainable AI in the SDGs, the EU ensures that ethical AI principles reach governments, corporations, and individuals, similar to existing SDG initiatives. This collaborative approach solidifies the EU’s position as a leader in AI governance, driving responsible and inclusive AGI development worldwide.

Facilitating Diplomatic AI Dialogues:

Acting as a neutral party, the EU can host multilateral discussions between the U.S. and China to promote ethical AI deployment and prevent AGI militarization. This is crucial as AGI has the potential to reshape global power structures and significantly impact security and economic stability. To ensure a balanced approach, the EU can initiate an international forum dedicated to AGI ethics and safety, bringing together policymakers, industry leaders, and academic experts. By fostering transparent dialogue, setting shared safety standards, and facilitating agreements on AI governance, the EU can position itself as a stabilizing force in the increasingly complex AGI landscape.

Promoting Ethical AI through Standardization:

By setting global benchmarks for transparency, accountability, and human rights in AGI development, the EU can shape U.S. and Chinese AI practices through regulatory leadership, strategic partnerships, and diplomatic pressure. Leveraging its AI Act as a model for ethical AI governance, the EU can engage in multilateral negotiations, establish economic incentives, and collaborate with global organizations to ensure responsible AGI development. By fostering global cooperation, the EU not only mitigates the risks of an uncontrolled AI race but also positions itself as a key player in defining the future of AGI governance.

Encouraging Open Collaboration on AGI Safety:

The EU can fund international research initiatives focused on AI safety, fairness, and alignment, reinforcing its position as a global leader in ethical AI governance. Given the potential for AGI to shift power dynamics and introduce unpredictable risks, the EU’s commitment to ensuring human-centric development is crucial. By investing in responsible AGI research, the EU not only mitigates existential threats but also strengthens its strategic influence in shaping the future of AI on the global stage.

Conclusion

The race toward AGI is not just a technological competition but a defining moment in global geopolitics. Whether China’s DeepSeek overtakes U.S. dominance or a multipolar AI landscape emerges, the EU holds the potential to mediate this rivalry by promoting ethical AI governance. Through regulatory leadership, diplomatic engagement, and international cooperation, the EU can steer AGI development toward responsible, inclusive, and human-centric outcomes, preventing the risks of an uncontrolled AI arms race.

Tuhu Nugraha
Tuhu Nugraha
Digital Business & Metaverse Expert Principal of Indonesia Applied Economy & Regulatory Network (IADERN)