Global Approaches to Sovereign AI: From Protectionism to Partnership

As artificial intelligence becomes central to national competitiveness, governments are no longer satisfied with simply regulating the technology – they want to own it. A new comparative analysis examines how five key jurisdictions – the EU, India, Japan, South Korea, and Brazil – are actively operationalizing the concept of “sovereign AI.”

While the drivers vary from geopolitical tensions to demographic challenges, the intent is consistent: jurisdictions are building the capacity to develop, deploy, and govern AI in alignment with their strategic interests.

The sovereignty spectrum

There is no single definition of sovereign AI. Instead, nations are adopting approaches that sit on a spectrum ranging from strict protectionism to strategic partnership.

• The European Union is shifting its agenda from political rhetoric to operationalization. It is moving beyond regulation toward capability building, aiming for technological independence and immunity from non-EU laws through initiatives like “AI Factories.”
• South Korea is pursuing an aggressive “AI G3” strategy (aiming to be a top 3 global AI power). Their approach relies on strong state-backed industrial policy and “National Champion” firms (such as Naver and LG) to build a domestic ecosystem independent of US or Chinese reliance.
• India adopts a multi-pronged strategy. Anchored in the Atmanirbhar Bharat (Self-Reliant India) vision, it combines the indigenization of the technology stack with a welcoming stance toward massive foreign investment, aiming for a trillion-dollar economic impact by 2035.
• Japan utilizes a hybrid approach. Viewing AI and semiconductors as critical to economic security, Japan balances domestic capability building with strategic alliances (e.g., with OpenAI and Microsoft).
• Brazil blends a strong Global South political narrative with pragmatic industrial strategy. Its focus is on “digital sovereignty” – controlling data, infrastructure, and value capture – while leveraging international partnerships where useful.

Common drivers: Demographics and culture

While geopolitical resilience is a primary driver across all jurisdictions, other unique pressures are shaping national strategies:

1. Demographics: In Asia, sovereignty is linked to survival. Japan views AI as a productivity tool (“Society 5.0”) to combat labor shortages caused by an aging society. Similarly, South Korea needs AI to offset a shrinking workforce while leveraging its dominance in memory chips.
2. Cultural Preservation: There is a growing push to protect local languages against English-centric models. Brazil’s AI Plan (PBIA) funds Portuguese language models to reflect national culture, while South Korea champions models like HyperCLOVA X, which claims higher performance in Korean culture and language than GPT-4.

Building the stack: Infrastructure and regulation

Sovereignty is being built layer by layer, from physical infrastructure to regulatory frameworks.

• Infrastructure: Governments are heavily subsidizing compute capacity. The EU is launching AI Factories and Gigafactories; India is funding over 10,000 GPUs through the IndiaAI Mission; and Japan has designated cloud programs as “critical products” eligible for billions in subsidies. Brazil is upgrading its HPC capacity, anchored by the Santos Dumont supercomputer, to avoid reliance on foreign clouds.
• Regulation: Approaches diverge significantly. The EU and Brazil are moving toward comprehensive, risk-based legislative frameworks (such as the EU AI Act and Brazil’s Bill 2338/2023). Conversely, Japan positions itself as the “world’s most AI-friendly country” with innovation-oriented laws, and India currently favors a soft-law approach that focuses on principles over rigid guardrails.

Implications for global business

For foreign technology companies, the rise of sovereign AI introduces new complexities. In the EU and Brazil, compliance burdens are rising, with strict data residency and sovereignty requirements likely to impact government contracts. In Japan and India, the environment remains relatively open, though subsidies for domestic players introduce new competition. Meanwhile, South Korea’s preference for indigenous solutions suggests that market access may increasingly hinge on partnerships with local champions.

This analysis only scratches the surface of how public procurement, talent development, and specific data governance laws are reshaping the global AI landscape. As we continue to monitor this evolving space, reach out to see how we can support your business.