In 2025 artificial intelligence moved from an experimental tool to a force that reshaped markets, public policy and everyday life. The year brought hundreds of billions of dollars of investment in data centres and AI hardware, high-profile layoffs in major tech firms and rising concern about mental health harms linked to conversational agents. Governments and companies now face pressure to balance innovation with safety and economic stability.
AI and China trade, policy and global impact
China’s place in the AI story was prominent. US export controls on advanced processors and the use of chips as leverage in trade talks highlighted how AI hardware has become a strategic asset. That shift intensified competition over supply chains and prompted nations across the world to reassess their dependence on a handful of cloud and silicon providers. For BRICS+ partners that rely on both American and Chinese technologies, the scramble to secure access to chips and cloud services has become a pressing economic and diplomatic issue.
At the same time, Silicon Valley’s push to scale AI capabilities raised questions about where oversight should sit. In the United States, executive orders and federal actions seeking to limit state-level rules provoked a likely legal contest, while regulators in other jurisdictions signalled a preference for stricter guardrails. Those legal and regulatory fights will matter for trade partners as they shape the global rules that govern AI deployment and cross-border data flows.
Commercial bet and market risks
Major cloud providers and hyperscalers drove a surge in capital expenditure on data centres and specialised chips. Analysts expect continued heavy investment through 2030, but some investors worry that the scale of spending may outpace demonstrable returns. The concentration of investment among a few large firms raises the risk of a correction if productivity gains prove slower than expected. For emerging markets, the key question is whether local industries will capture value from the AI build-out or merely pay the operational costs.
Social impact and safety concerns
Beyond markets, the rise of conversational agents raised alarm among clinicians and safety advocates. Reports linking some chatbots to harmful outcomes prompted major providers to introduce parental controls, crisis resources and other safeguards. Mental health professionals warn that chatbots are likely to become a first port of call for many users, especially younger people, yet current systems lack the clinical judgement and confidentiality expected in health care. Governments and platforms will need targeted policies to reduce harm while preserving legitimate access to support.
Outlook for 2026
Heading into 2026, stakeholders will watch three developments closely: whether trade tensions over silicon and cloud services stabilise, how regulators and courts resolve the balance between national and subnational oversight, and whether investment translates into measurable productivity gains. Employers and educators must accelerate reskilling efforts as demand for new AI-related skills grows. If those efforts succeed, the technology could underpin growth across many economies. If not, the social and economic costs will be harder to manage.
For BRICS+ countries, the immediate priority is strategic: secure supply chains, clarify regulatory approaches and invest in local capacity so that AI’s benefits are widely shared rather than concentrated in a few centres of power.
Key Takeaways:
- AI and China played a central role in 2025’s surge in investment, geopolitics and market volatility.
- Policy moves and chip export controls shifted trade dynamics and raised regulatory fights that will affect global partners.
- Mental health risks and widespread job disruption prompted calls for stronger safeguards and targeted workforce re-skilling.
- Investors and governments will watch 2026 for signs of market correction and clearer measures of AI productivity.
