Sovereign AI: Geopolitical Strategy & Industrial Policy for Countries 3-193, with Anjney Midha, a16z

**Ryan J. Salva** (0:00)
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**Nathan Labenz** (0:31)
Hello, and welcome back to The Cognitive Revolution. Today we're exploring a fundamental question that governments around the world are wrestling with. If the United States and China are going to continue to dominate the fundamental AI inputs of talent, data, and compute, and thus own the AI capabilities frontier, what exactly should everyone else do? My guest is Anjney Midha, General Partner at Andreessen Horowitz, who brings deep software industry investment expertise and a remarkable ability to channel diverse national perspectives on the opportunities and challenges of AI to this conversation. We begin by considering what sovereign AI means to the enterprise, which I honestly hadn't planned on coming in, but does make a lot of sense considering the degree to which companies are both driving investment and adoption around the world and informing their respective governments' priorities. Here it seems regulatory questions around which companies have to share what information with which governments under what circumstances loom so large that United States-based hyperscalers are beginning to face new competition from national champion AI data factory companies like the ones recently announced in France, the UAE, and Saudi Arabia. With the conversation grounded in that reality, we then turn to what countries should do and are doing. On the talent front, we agree that there's really no way for most countries to compete at the frontier today. But Anjney does argue that governments should play for longer timelines and try to both partner for access to the fruits of frontier labor now and build the complementary and last mile local delivery talent that they'll need to be successful on a 10 to 20 year timescale. On data, Anjney makes what I think is really an inarguable case that all governments should be tokenizing their cultures. And we then debate whether they should expect better results by partnering with frontier developers or by trying to own fine-tuning and application development locally. Though fortunately for them, as long as frontier open models continue to drop, those options are not mutually exclusive. On compute, it seems that most countries will be asking themselves a complicated mix of questions, including what level of independence do we really need and want? And what mix of partnership and local build-out is required to get there? Just how reliable are the US and China as partners? And do we have to align with one or the other, or can we play both sides? Obviously, that last question has become much more complicated recently, as the United States has shaken the foundations of its global alliances while in the midst of intensifying strategic competition with China.
Still, aside from a few countries, like the UAE and Saudi Arabia, that have extremely deep balance sheets and can offer regulatory arbitrage in exchange for being cut into the global AI buildout on a strategic level. My sense coming out of this conversation is that for most countries, some limited investment in critical infrastructure would be prudent, but beyond that, they're probably better off letting the market develop naturally and accepting really quite a bit of dependence on the United States. At the very least, I sincerely hope that the US proves to be a good pet as an AI partner, first and foremost, when it comes to responsible development of the frontier technology itself. To be honest, if it doesn't, I feel like the rest of the world might have even bigger problems to contend with. Obviously, this is a super dynamic space, and this was a great conversation. I really think that the empathy Anjney demonstrated for so many different positions that national leaders find themselves in, and the build-by-partner framework that he brings to this analysis, are valuable contributions, and I look forward to doing it again soon. With that, here are a couple of quick disclaimers, from me and from A16Z, which, as you probably know, recently acquired the Turpentine Network. First, I personally am solely responsible for all content on the Cognitive Revolution, including guest and topic selection, the questions I ask, and the editorial commentary I offer. For this episode, with Anjney in particular, I received no consideration to have him on the show, and while I did follow my usual practice of sharing questions in advance, and allowing Anjney to review our edit and request any additional cuts, no topics were off the table and nothing meaningful was cut during the editing process. And second, this is directly from A16Z. This information is for general educational purposes only, and is not a recommendation to buy, hold, or sell any investment or financial product. Turpentine is an acquisition of A16Z Holdings, LLC, and is not a bank, investment advisor, or broker-dealer. This podcast may include paid promotional advertisements. Individuals and companies featured or advertised during this podcast are not endorsing AAH Capital or any of its affiliates, including but not limited to A16Z Perennial Management LP. Similarly, Turpentine is not endorsing affiliates, individuals, or any entities featured on this podcast. All investments involve risk, including the possible loss of capital. Past performance is no guarantee of future results, and the opinions presented cannot be viewed as an indicator of future performance. Before making decisions with legal tax or accounting effects, you should consult appropriate professionals. Information is from sources deemed reliable on the date of publication, but Turpentine does not guarantee its accuracy. With that, I hope you enjoy this exploration of how companies and countries are navigating vexing strategic AI choices, with Anjney Midha of Andreessen Horowitz. Anjney Midha, General Partner at A16Z, welcome to the Cognitive Revolution.