**Introduction** Artificial intelligence (AI) is configuring the global trading system by changing how economies produce, trade, regulate, and compete. AI is increasing the importance of digital trade, semiconductors, data flows, and advanced computing infrastructure, while also reshaping industrial policy and geopolitical competition. As governments integrate AI into economic and national security strategies, trade is becoming more technology-driven and strategically managed. **Contextual background** The global trading system was largely designed around trade in physical goods and traditional services. AI changes this structure because it depends heavily on data, algorithms, cloud computing, advanced semiconductors, and digitally delivered services. As firms increasingly use AI in production, logistics, finance, and business operations, a larger share of international trade becomes tied to digital infrastructure and technology-intensive services rather than only the movement of physical goods. At the same time, governments increasingly view AI-related industries as strategically important for economic competitiveness and technological leadership. This has encouraged greater use of industrial subsidies, export controls, and investment restrictions in sectors such as semiconductors, cloud computing, and advanced technologies, increasing the role of trade policy in managing technological competition[1]. **How AI is configuring the global trading system** **1.** **AI is accelerating the expansion of digital trade** AI is expanding trade in digitally delivered services such as cloud computing, financial technology, logistics management, software, and data analytics[2]. AI systems also improve global supply chains through predictive logistics, automated inventory management, and faster cross-border coordination. This has increased the importance of cross-border data flows and digital trade rules. As economies become more data-driven, governments are under growing pressure to establish rules on digital taxation, data governance, privacy, and market access. **2.** **AI is reshaping comparative advantage and industrial competition** AI is changing the sources of economic competitiveness. In many industries, access to advanced computing power, semiconductor capacity, research ecosystems, and large datasets is becoming more important than low labor costs. This has intensified industrial competition between major economies. Governments are increasingly using subsidies, industrial policy, and investment screening to strengthen domestic AI industries and reduce dependence on foreign technologies[1]. As a result, trade policy is becoming more closely linked to technological leadership and economic security. **3.** **AI is increasing the strategic importance of semiconductors** Advanced AI systems rely heavily on high-performance semiconductors and computing infrastructure. This has made semiconductor supply chains one of the most strategically important parts of the global economy. Governments increasingly treat semiconductor production as a national security priority. Export controls on advanced chips, restrictions on semiconductor technology transfers, and domestic production incentives have become central features of geoeconomic competition[1]. At the same time, countries are pursuing diversification and “friend-shoring” strategies to reduce supply chain vulnerabilities and dependence on geopolitical rivals[3]. **4.** **AI is contributing to fragmentation in global trade governance** Countries are developing different approaches to AI regulation, including rules on cybersecurity, data protection, algorithmic accountability, and digital competition[4]. These differences create regulatory fragmentation that can act as a non-tariff barrier to trade, especially for technology firms operating across multiple jurisdictions. The divergence of digital regulations also makes it more difficult to establish common global trade rules for AI-related industries. **5.** **AI risks widening inequalities within the global economy** Economies with strong digital infrastructure, advanced research capacity, and access to computing power are likely to benefit most from AI-driven trade and productivity gains[1]. Many developing economies face challenges including limited digital infrastructure, lower investment capacity, and dependence on imported technologies. This raises concerns about a widening “AI divide,” where advanced economies dominate high-value digital sectors while developing economies struggle to move up global value chains. At the same time, AI can create opportunities for developing economies through digital services exports, improved logistics, and greater participation in global e-commerce networks. **Conclusion** AI is reshaping the global trading system by increasing the importance of digital trade, semiconductors, data governance, and strategic industrial policy. It is also intensifying geopolitical competition and contributing to fragmentation within the global economy. As AI becomes more deeply integrated into production and trade systems, international trade governance will increasingly need to adapt to technology-driven forms of economic competition and regulation.
