Risks and Opportunities in a Multipolar World
Key takeaways from behind closed-doors conversations at the Munich Security Conference
The era of Western hegemony is over. What will follow, after nearly 80 years of international cooperation, is a multipolar scramble where nations compete for industrial supremacy, technology access, and control of critical resources.
To make sense of this new era, we recently gathered a group of founders, investors and operators at our latest Risk Club session in partnership with our friends at General Catalyst in Munich.
These Risk Clubs, which BlueYard has held across the US and Europe for a few years now, bring together a dozen or so leading founders, investors, operators, policy makers, and journalists for conversations in a Jeffersonian debate dinner format. We focus on the defining risks of our time and how we might treat volatility as an opportunity to nudge ourselves towards utopia.
Whereas many aspects such as industrial capacity of the West, the ability to manage asymmetric cost warfare, and European sovereignty are the dominating topics, there are several additional potentially tectonic shifts and risks that key actors are focused on:
- Compute is power, sovereignty is controlling your own compute capabilities
U.S. hyperscalers still control the majority of the world’s compute and data infrastructure. In response, European stakeholders are now investing massively in the bedrocks of digital sovereignty: cloud infrastructure, sovereign data centers, semiconductor lithography and more. The talent base around ASML and deep research institutions give the continent a foundation to build from. But it is one thing to build a technology, it is a completely other game to build a thriving ecosystem and commercial success. It’s still very much an open question where Europe and the rest of the world can replicate a sovereign AI stack (and get the parts required for the build out at scale — where some companies that tried to catch-up struggled with).
2. We are underestimating how AI can change the fabric of conflict and make democracies more vulnerable
AI progress is breakneck fast. And so will its impact be on the future of war. Not just attacking and defending IT systems and networks. But the ability to create massive and shifting social and information campaigns, spoofing personas, and synthetic content. The bar to swing an election will lower massively. New “trust tech” that allows people to figure out what is true or not could play an essential role. Or will societies default to treating everything as fake until verified. What does that imply for how societies work?
3. Middle Powers Rising
Whereas the US, China, and Europe dominate the headlines — middle powers such as Turkey both have military prowess and geopolitical influence and can tip the balance in a newly shaping world order. Expect other middle powers (potentially based on resource access) to find ways of projecting power.
4. The civil war no one is talking about: labour market vs AI
The impact of AI in labour markets is going to be a battle between productivity increases, GDP growth, and labour replacement. If the transition is not managed well, a new type of civil war between labour and the capital controlling AI could emerge.
5. European budget tailwinds, collaborative headwinds?
Europe is currently sitting on a €650B budget for rearmament and re-industrialization over the next four years. But the continent remains divided by its own strengths — Germany has capital and the industrial base, France has nuclear capabilities and experience. Without deeper cooperation between the two to build independent capabilities on the continent, Europe risks continuing paying protection money to the US as deterrence credibility gets eroded by a lack of integrated capabilities.
At BlueYard, we believe there is opportunity in volatile times like these. That the founders who will change the world emerge from these crucibles to build solutions that move us toward something better.
We’ve invested across defense, compute, and industrial resilience — backing founders building the infrastructure that sovereign, secure societies will depend on. In defense: Castelion, AnySignal, ZeroPhase, and Momentum. In compute: Corintis, Inpho, and Protocol Labs. In industrial: Manex, Eigenblue, and FDM.
We’re actively looking for the next generation of founders to make civilizational bets. If that’s you or if you’re an investor, policymaker, or operator thinking about these questions then we’d love to talk.
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