The Capital War Behind the AI Arms Race

The US-China military AI competition represents more than a geopolitical rivalry—it’s catalyzing a fundamental restructuring of global defense capital allocation. With US defense spending potentially reaching $1.5 trillion and venture funding in defense tech growing 18-fold over the past decade, we’re witnessing the emergence of a new asset class. Critically, sovereign wealth funds—from Norway’s $1.8 trillion GPFG to the GCC’s collective $6 trillion—are reconsidering decades-old exclusions on defense investments. This analysis examines the investment implications of “intelligentised warfare” and identifies where institutional capital is likely to flow.

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