US AI strategy risks deepening global inequality and climate crises

A new US-led AI strategy is set to reshape global technology and economic power. The plan, driven by the Trump administration's AI Action Plan, focuses on deregulation, exporting US-controlled systems, and limiting China's influence. Critics warn it could worsen inequality, climate risks, and job insecurity—especially in the Global South.

The approach arrives as automation and AI already reduce labour's share of global GDP, hitting developing regions hardest. Meanwhile, the first AI summit in the Global South, hosted by India in 2026, aims to counterbalance these shifts by setting new governance priorities.

The US plan rests on three key pillars. First, it pushes for deregulation at home to speed up AI development. Second, it seeks to export a US-dominated 'AI technology stack' worldwide. Third, it aims to block China from offering alternative AI solutions, which could leave the Global South more reliant on American technology.

Data centres, essential for AI growth, demand vast amounts of energy and water. In regions already facing shortages, this could deepen water scarcity and strain fragile infrastructures. Over 90% of climate-related deaths in the last 50 years have occurred in the Global South, where extreme weather and displacement risks are rising. By 2050, climate change may force 143 million people from their homes—many in areas ill-equipped to cope.

AI's ability to replace human roles threatens jobs and political stability in developing nations. The plan's export strategy overlooks these risks, potentially concentrating wealth and power in fewer hands. Without local AI strategies, countries in the Global South may struggle to protect labour markets or build climate resilience.

India's upcoming AI Summit in 2026 marks a rare effort to address these gaps. As the first such event in the Global South, it aims to strengthen multilateral cooperation and push for fairer AI governance. Yet concrete national strategies remain scarce, leaving many regions vulnerable to the plan's consequences.

The US AI strategy could widen economic divides while tightening control over global technology. Developing nations may face higher unemployment, climate displacement, and dependence on foreign systems. India's summit offers a chance to challenge this direction—but without broader action, the Global South's challenges will likely grow.