This analysis was first published in SvD Näringsliv, in Swedish, on April 15th, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
Countries and regions are racing to stake their position in the explosive AI development. But when it comes to infrastructure, Sweden appears to have already given up.
It looks like a circuit board in a desert — at least when you view the satellite images. Across just over 450 hectares, just north of Phoenix in the US state of Arizona, lies what is set to become the foundation of the next wave of domestic chip manufacturing in the United States.
TSMC — the Taiwanese manufacturing giant — broke ground on the new facility in April 2021 and is targeting production in 2025. The following year, 2022, plans were announced for a second factory. And this week, a third.
In total, TSMC is investing nearly 700 billion kronor in Phoenix. That is a great deal of money — even for the world’s largest producer of chips and semiconductors. And it matters enormously for the city of Phoenix, the state of Arizona, and the United States as a whole. TSMC is receiving around 71 billion kronor in various subsidies — just to complete the latest project alone.
“Chips are the foundation of all artificial intelligence and essential components for the technology underpinning our economy,” commented US Commerce Secretary Gina Raimondo.
The United States is not alone in wanting to stake a position here. Beyond China — one of the dominant players in AI — a feverish build-out is underway across the Middle East to become the region’s hub for artificial intelligence. The focus there is not primarily on chip production, but rather on the data centres in which chips are used. The Financial Times has reported that both Saudi Arabia and the United Arab Emirates have bought thousands of Nvidia’s most sought-after chips to secure access to frontier technology. Both countries have also developed their own language models, similar to those underpinning ChatGPT.
To power the data centres, grid expansion has begun in both countries. Already, Chinese giants such as Tencent and Alibaba, as well as American Amazon, have all committed to operating data centres in Saudi Arabia. The sector is new — and growing rapidly.
Beyond data centres and infrastructure, enormous amounts of investment capital are being deployed. Abu Dhabi’s sovereign fund Mubadala is participating in the establishment of a new company dedicated to investments in AI-related sectors. The fund is targeting over 100 billion dollars — more than 1,000 billion kronor — within a few years. And Saudi Arabia is in talks with US venture capital firm Andreessen Horowitz about investing 40 billion dollars in a joint fund, according to Bloomberg.
In an interview with SvD, the chairman of the Swedish AI Commission, Carl-Henrik Svanberg, said that the US and China have already won the battle for infrastructure. For Sweden, the focus should instead be on building products and services on top of that infrastructure, in Svanberg’s view. He declined to say what the commission he chairs will have achieved before the end of the year, but they will produce a final report by the summer of 2025.
Running parallel to this, the Swedish initiative AI Sweden — a national centre involving participants from both the private and public sectors — has published an AI strategy for the country. It describes a society that makes the most of AI’s potential and builds on areas where Sweden is already strong, including democracy, a developed welfare state, and social stability.
The question is how useful such a strategy really is — and why it was only published now, given that AI Sweden was founded back in 2019. Among the strategy’s core principles, one can read that Sweden should “ensure responsible use,” “encourage collaboration,” and “engage with and learn from the best.” No doubt — but no country has a strategy that advocates impeding collaboration or learning from the mediocre.
In early April, Canada launched a new fund to strengthen domestic AI initiatives. Nearly 19 billion kronor will be invested in this first phase. The money is intended to help Canadians get the most out of AI and strengthen the country’s economy, according to Prime Minister Justin Trudeau.
AI Sweden has a total budget for 2024 of around 150 million kronor. The Swedish AI Commission has an appropriation of 4.8 million kronor. Svanberg tells SvD that Sweden will not become a “tech leader” in the field. The hope is instead to be quick at adopting the technology that others develop.
With the current resources, priorities, and pace, it is an open question whether Sweden will even manage that. Around the world, billions are being invested in factories, data centres, and infrastructure to support this new technological shift. But in Sweden, we will not even see a report with a plausible plan until the summer of 2025. By then, a great deal will already have happened in the global race.
