The geopolitics of infrastructure
For most of the postwar era, global power has been defined by alliances, aircraft carriers and reserve currencies. But we are now entering an era defined by critical infrastructure and those who finance, build and operate it. Ports, power grids, rail corridors, data centers and critical mineral supply chains are no longer just “projects.” They are the operating system of sovereignty.
Infrastructure — networks that move energy, goods and data — is the industry of industries. Whoever shapes it through contracts, standards, currency denomination and long-term maintenance (much of which is increasingly guided by data and artificial intelligence-driven systems) will achieve enduring global influence.
Debates about “de-dollarization” often focus on reserve currencies. In the International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves data, the US dollar accounted for about 57 percent of global reserves in 2025, with the euro a distant second. But official reserves are a lagging indicator. The more relevant shift concerns infrastructure.
China recognized this early. Between 2000 and 2023, it extended about $2.2 trillion in official loans and grants as part of its Belt and Road Initiative, much of which was invested in transport and energy infrastructure. This model was never just about capital. By bundling finance, contractors, equipment and digital systems, China was exporting state capacity and embedding long-term dependence.
Projects like the Chancay megaport in Peru — which is majority-owned by a Chinese operator and backed by billions in investment — illustrate how infrastructure can reconfigure trade routes and other dependencies. Likewise, the Addis Ababa-Djibouti Railway, financed largely by Chinese lending, dramatically reduced freight times between Ethiopia and the Red Sea.
The geopolitical implications of infrastructure investment are increasingly top of mind for policymakers. The prospect of Chinese involvement in airport construction in Greenland raised security concerns in both Denmark and the US. The new contest is not simply between currencies but between competing infrastructure blocs.
For decades, US influence rested on military power, the dollar and multilateral institutions. But while this architecture still matters, it is rapidly being supplemented — and in some cases challenged — by infrastructure strategies.
Far from being confined to steel and concrete, infrastructure geopolitics increasingly extends into compute, data and AI.
Bertrand Badre and Saurabh Mishra
Political tensions reflect this shift. In 2024, US President Donald Trump threatened severe tariffs against countries pursuing alternatives to dollar-based invoicing and payments.
At the same time, Western economies have scaled up their own infrastructure initiatives. The G7’s Partnership for Global Infrastructure and Investment, for example, aims to mobilize $600 billion by 2027; the EU’s Global Gateway pledges up to €300 billion ($353 billion); and the Blue Dot Network (launched by Australia, Japan and the US) seeks to certify high-quality infrastructure standards.
Yet many countries perceive these efforts as slow and overly conditional. In a world facing climate shocks, demographic pressures and urgent development needs, the ability to deliver infrastructure quickly often outweighs governance concerns.
Various middle powers are redefining their own strategies accordingly. India, for example, is pursuing “corridor diplomacy” by supporting projects like the Chabahar Port and the India-Middle East-Europe Economic Corridor. Rather than aligning exclusively with one bloc, it is leveraging infrastructure to hedge, diversify and expand its own strategic autonomy.
There is also another critical shift underway. Far from being confined to steel and concrete, infrastructure geopolitics increasingly extends into compute, data and AI. Corporate filings reveal the scale of this transition. Technology firms such as Microsoft, Alphabet, Meta and Amazon are investing tens of billions of dollars annually in AI infrastructure, including data centers and specialized hardware. Their capital expenditures and associated depreciation now resemble those of traditional infrastructure sectors.
Semiconductor manufacturing has become a strategic chokepoint in this system. Facilities costing tens of billions of dollars anchor global supply chains and define access to advanced compute capabilities. But AI is not just another layer of infrastructure. It is meta-infrastructure that will shape how all other systems are planned, operated and optimized. If infrastructure defines geopolitical power, AI is increasingly defining infrastructure. It can improve grid efficiency, extend the life of transport networks and enable more precise climate adaptation strategies.
But AI also introduces new forms of vulnerability. Remote control over optimization systems can function as a “kill switch” for critical infrastructure and opaque or biased algorithms can systematically determine which regions or communities receive investment. In this context, infrastructure is no longer only about physical assets but also about who controls the intelligence layer that governs them.
Nowhere are the stakes more visible than in Gaza. According to UN and World Bank assessments, by late 2025, about 90 percent of homes and infrastructure had been damaged or destroyed and nearly the entire population of 2.1 million people had been displaced. Reconstruction will require tens of billions of dollars. But without a durable political settlement, the enclave’s new infrastructure could become an instrument of control rather than recovery. Infrastructure geopolitics is not inherently emancipatory. Transit corridors, energy systems and housing can be designed to enable mobility and growth, but they can also be used to constrain people.
The world is moving toward overlapping infrastructure ecosystems: a US-centered system built on open capital markets and legal enforcement; a China-centered system combining state finance, contractors and embedded standards; and a diverse set of regional and middle power strategies.
The decisive question is not which system is largest but which will ultimately be accepted as the default. Even when decisions about ports, energy systems and data networks are framed in purely technical or financial terms, an underlying political logic is at work. Such decisions are increasingly mediated by AI systems that were trained on historical data and designed to optimize for efficiency, thus narrowing the range of perceived alternatives.
George Orwell famously warned about the control of language. Today, we are witnessing an even more subtle form of power. Infrastructure, increasingly guided by algorithmic systems, risks making certain potential futures appear inevitable and others unthinkable.
The greatest danger is not that one power dominates but that societies gradually lose the ability to choose among competing paths. The new world order is being built in concrete and encoded in silicon. The last sovereign act may not be to build or to resist but to recognize that these choices remain open before the systems we construct begin to optimize us in return.
• Bertrand Badre, a former managing director of the World Bank, is Chair of the Project Syndicate Advisory Board, CEO and Founder of Blue like an Orange Sustainable Capital, and the author of “Can Finance Save the World?” (Berrett-Koehler, 2018).
• Saurabh Mishra, former director of Stanford University’s Institute for Human-Centered Artificial Intelligence and an economist at the World Bank and International Monetary Fund, is Founder and CEO of Taiyo.AI.
©Project Syndicate
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