Artificial Intelligence and Political Risk Analysis

This chapter explores the evolving landscape of political risk analysis (PRA) in the context of the rapid advancement and integration of artificial intelligence (AI) in global business operations. The chapter offers a comprehensive analysis of how AI technologies are reshaping the risks faced by companies operating abroad. To start mapping these risks, we propose a first, essential distinction, between risks relevant to AI-intensive industries and those relevant to any type of industry. For AI-intensive industries, we discuss the challenges posed by regulatory environments, ethical concerns, cybersecurity risks, and economic nationalism. For non-AI-intensive companies, we discuss the threats posed by deepfakes, infrastructure vulnerabilities, copyright infringement, and competitive industrial dynamics. By providing this overview we offer an understanding of the multifaceted nature of political risks in the AI era, emphasising the need for proactive risk management strategies and the importance of adapting PRA practices to the changing technological landscape.