Consider two very different strategic decisions. One involves an Artificial Intelligence (AI) company forced to suspend access to key models because of a US exportcontrol directive. The other involves a global technology company shifting part of its production network from China to India as tariffs and geopolitical tensions reshape the economics of manufacturing. At first glance, these may look like isolated episodes. However, they point to the same broader issue: firms must compete not only in markets, but also in political environments shaped by regulation, trade policy, and geopolitical rivalry. Dealing with such forces, whether through managing government relations, lobbying for change, or anticipating how political developments may alter the rules of competition, forms an important part of what is often referred to as nonmarket strategy. A PRESSING CONCERN In the current environment, characterised by rising geopolitical tensions and increasing fragmentation of the global economy, non-market strategy has become pressingly important. In his speech at Davos last January, the Canadian Prime Minister Mark Carney described the current international order as follows: “Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.” This description reflects the direction in which many states now appear to be moving in relation to international markets. The US return to tariffs under President Donald Trump, and the geopolitical rivalry between the United States and China over semiconductors, rare earth minerals, and AI, are just some examples of how these tensions are reshaping markets and, by extension, firms’ strategic decisions. A DIFFERENT PICTURE To be clear, the relationship between business strategy and politics is hardly new. What may be different today, however, is the scale and frequency of geopolitical disruptions, and the broader range of strategic decisions they now affect. Issues once analysed primarily in commercial terms, such as which markets to prioritise, which suppliers to rely on, and which technologies to invest in and build around, now carry a more salient political dimension. For many firms in digital and technologically advanced sectors, as a case in point, strategic decisions around technological innovation and adoption are no longer driven solely by cost and performance. They are increasingly influenced by whether access to critical technologies could be disrupted or restricted by export controls, national security rules, and broader geopolitical rivalry. The recent Anthropic episode provides a useful illustration. In June 2026, Anthropic, one of the leading AI companies based in the United States, announced that the US government had issued an export-control directive requiring it “to suspend all access to Fable 5 and Mythos 5 by any foreign national, whether inside or outside the United States, including foreign national Anthropic employees.” The practical effect was that Anthropic had to disable these models for all customers in order to comply. The directive was reportedly motivated by national security concerns. 8 |
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