Artificial Intelligence, Foreign Policy, and Entrepreneurial Innovation

Artificial intelligence (AI) has emerged as a transformative force at the intersection of technology, entrepreneurship, and global politics. This chapter examines how AI-driven innovation influences foreign policy in the era of “algorithmic geopolitics,” where algorithms and data shape international power relations. It explores the role of entrepreneurial actors, ranging from start-ups to multinational corporations, in shaping diplomatic outcomes and strategic choices, alongside state-led initiatives such as digital sovereignty and techno-nationalism. The chapter advances a bridge concept of sovereign entrepreneurship, explaining how states leverage (and are constrained by) private innovators in asserting digital sovereignty while competing/cooperating on AI standards. It integratesial ethical AI governance (UNESCO/IEEE/OECD) and sustainability considerations (AI's environmental footprint) and extends the analysis beyond the U.S.-China-Israel triad to include EU regulatory power and Global South innovation trajectories. Policy implications highlight mechanisms that align entrepreneurial dynamism with democratic accountability and low-carbon AI, reducing rivalry risk tough practicable, multilateral guardrails. The chapter also emphasizes that ethical governance and environmental sustainability are now central dimensions of AI geopolitics. As international competition intensifies, integrating human-rights standards and decarbonization principles into AI development becomes a prerequisite for legitimate and secure global deployment.