Volume 9: 2035 Scenarios and Strategic Implications

Eight volumes have mapped how AI reshapes every dimension of power in the Americas: industrial capacity, employment structures, supply chains, resource flows, military capabilities, governance frameworks, and the fundamental question of sovereignty versus dependency. Each volume has revealed choices being made today that will compound into dramatically different futures.

We stand at 2026, early enough that trajectories remain contested but late enough that certain patterns have emerged. The decisions made in the next decade about AI alignment, investment, regulation, and cooperation will determine whether the Americas emerges as an integrated technological bloc, fragments into competing spheres of influence, or becomes a battleground where external powers wage their competition through local proxies.

This volume presents three geopolitically grounded scenarios for 2035, examining what each means for states, firms, and societies across the hemisphere. These aren't predictions. They're plausible futures based on trends already visible, showing how current choices could compound into radically different outcomes.

Who Writes the Rules? Three Competing Models

Before examining scenarios, we must understand the global governance frameworks competing to shape AI development. Three models have emerged, each reflecting different values, institutional capacities, and strategic priorities.

The Brussels Effect: Regulation-Led

The European Union's AI Act represents the most comprehensive regulatory framework globally, establishing detailed requirements across the AI lifecycle with substantial penalties for violations. The model emphasizes precaution, fundamental rights protection, and comprehensive regulation that categorizes systems by risk and prohibits applications deemed unacceptably dangerous.

The Brussels Effect derives from market power: companies wanting to serve European markets must comply with EU rules, and often find it easier to adopt those standards globally rather than maintaining separate systems for different jurisdictions. This worked with data privacy through GDPR and could work again with AI.

For the Americas, the EU model appeals to nations prioritizing citizen protection and believing markets alone won't adequately address AI harms. Canada's governance approach borrows heavily from EU frameworks. Brazil's AI Act explicitly references European risk-based classification. But the model also faces criticism as potentially stifling innovation through excessive regulatory burden and creating compliance costs that favor large incumbents over startups.

The Beijing Model: State Control

China integrates AI governance into broader state control mechanisms, treating AI simultaneously as economic opportunity, social management tool, and domain of great power competition. The government prioritizes political stability, enhanced surveillance capacity, technological self-sufficiency, and international power projection.

Chinese AI governance serves Communist Party priorities first. Innovation and economic growth matter, but they're subordinate to maintaining regime control and advancing geopolitical objectives. This creates a model fundamentally incompatible with liberal democratic governance while proving attractive to authoritarian regimes that view AI primarily through security and control lenses.

For Latin America, the Beijing model offers patient capital, comprehensive technology packages, and fewer political conditions than Western alternatives often impose. But it also embeds dependencies on Chinese vendors and comes with expectations about political alignment that can conflict with genuine sovereignty.

The Washington Model: Market-Led Innovation

The United States pursues AI governance through sectoral enforcement, voluntary frameworks, and minimal comprehensive regulation. Federal policy under the Trump administration has prioritized innovation and competitiveness, using executive orders to preempt state regulations deemed burdensome and relying on existing laws rather than AI-specific legislation.

The model emphasizes dynamic innovation and post-hoc enforcement over ex-ante licensing. The bet is that technological leadership matters more than early regulatory frameworks, and that market forces plus targeted enforcement can address harms without stifling the experimentation that drives breakthroughs.

For the Americas, the Washington model appeals to nations prioritizing economic growth and technological catch-up, believing overregulation will hand advantages to less scrupulous competitors. Mexico's constitutional approach and various Central American strategies align more closely with U.S. preferences than European precaution.

Which Model Dominates by 2030?

None of these models will achieve complete global dominance, but their relative influence shapes what's possible. The Brussels Effect could spread through trade agreements and regulatory harmonization, creating a rights-oriented AI governance bloc spanning Europe, Canada, and parts of Latin America. The Beijing Model could dominate across authoritarian systems and nations seeking alternatives to Western frameworks. The Washington Model could prevail in highly competitive markets prioritizing innovation over protection.

For the Americas specifically, the 2024-2026 period has seen growing alignment with the Washington Model as U.S. federal policy aggressively asserts light-touch governance and preempts stricter state approaches. But this could shift dramatically with future elections, creating regulatory uncertainty that makes long-term planning difficult.

Scenario A: The Pan-American AI Bloc (Integrated Cooperation)

In this scenario, the Americas coalesces into an integrated AI zone stretching from Toronto to Tierra del Fuego, competing as a unified bloc against China and the EU.

How We Get There

The USMCA framework expands into comprehensive technology cooperation, with Mexico successfully bridging between U.S. innovation priorities and Latin American development needs. The Arizona-Sonora-Jalisco semiconductor corridor closes the advanced packaging gap, creating end-to-end chip production capacity within North America. Brazil's digital sovereignty ambitions evolve from rhetorical assertions into genuine partnerships where hemispheric allies invest in Brazilian AI infrastructure on terms that preserve local control.

Regional cooperation accelerates around critical minerals, with Chile, Argentina, and Bolivia coordinating lithium and copper exports to maximize leverage rather than competing to undercut each other. Paraguay, Costa Rica, and other countries with abundant renewable energy attract data centers that serve hemispheric needs, creating distributed computational capacity less vulnerable to single points of failure.

Governance harmonization proceeds through mutual recognition agreements where countries adopt compatible risk-based frameworks without identical regulations. Canada's standards-led approach, U.S. enforcement mechanisms, and Brazil's developmental focus prove complementary rather than contradictory, creating a hybrid model that accommodates diversity while maintaining interoperability.

The hemisphere develops coordinated responses to Chinese technology penetration, not through blanket bans but through strategic partnerships that give Latin American nations genuine alternatives. U.S. and Canadian firms offer financing, technology transfer, and market access on terms competitive with Chinese proposals but without the political strings that compromise sovereignty.

Implications for States

Security improves as integrated supply chains reduce vulnerability to disruption from conflicts in Asia or Europe. The Taiwan Strait crisis of 2030 causes temporary semiconductor shortages but doesn't cripple hemispheric AI industries because advanced packaging capacity exists in Mexico and basic chip production has expanded across multiple countries.

Sovereignty strengthens for smaller nations because regional cooperation provides scale they couldn't achieve alone. Uruguay participates in hemispheric AI development not as subordinate client but as valued partner contributing specific capabilities like secure government cloud services and expertise in renewable energy integration.

Economic development accelerates as value chains extend throughout the hemisphere rather than concentrating in a few coastal cities. Colombia transitions from BPO services threatened by automation to higher-value AI application development for Spanish-language markets. Central American nations leverage proximity to U.S. markets and abundant renewable energy to attract computing infrastructure.

Implications for Firms

Market access expands as hemispheric integration creates a unified regulatory environment spanning nearly a billion people. Companies operating across the Americas face compatible standards rather than fragmented requirements, reducing compliance costs and enabling genuine continental scale.

Competition intensifies as integrated markets lower barriers for new entrants. Brazilian AI startups can raise capital in Toronto, establish operations in Mexico City, and serve customers from Bogotá to Buenos Aires without navigating fundamentally incompatible regulatory systems. This benefits innovative firms while challenging incumbents dependent on fragmented markets and local monopolies.

Location risk decreases as distributed infrastructure and multiple suppliers reduce dependence on any single jurisdiction. A firm that loses access to Brazilian data centers can shift operations to Chilean or Mexican facilities without complete system redesign.

Implications for Societies

Social cohesion improves as AI-driven employment disruption gets managed through coordinated transition programs rather than each nation struggling alone. Cross-border labor mobility allows workers displaced in one country to find opportunities in another, while shared training programs prepare workforces for AI-era employment.

Opportunity expands beyond traditional elite centers. Talented researchers from Paraguay or Ecuador can contribute to hemispheric AI development without necessarily emigrating permanently to Silicon Valley or São Paulo, participating instead in distributed networks that value contributions regardless of geographic location.

Democratic voice strengthens as governance frameworks emphasize transparency, accountability, and citizen participation. AI systems that affect employment, credit, health care, and civic participation operate under rules that protect fundamental rights and provide meaningful redress when harms occur.

Critical Vulnerabilities

This scenario requires sustained political will across administrations and countries, difficult to maintain given electoral cycles and shifting priorities. It assumes the United States accepts genuine partnership rather than demanding subordination, which contradicts historical patterns. It requires Brazil to set aside sovereignty rhetoric and accept integration on terms that may limit independent action. And it assumes China doesn't successfully fracture hemispheric unity through strategic investments and partnerships that peel off key countries.

Scenario B: The Fragmented South (Hemispheric Division)

In this scenario, the Americas fragments into competing technological spheres, with Mexico integrating northward into U.S. systems while Brazil and Argentina pivot toward Chinese technology standards, splitting the continent.

How We Get There

A 2028 U.S. administration imposes aggressive conditions on Latin American technology partnerships, demanding data localization restrictions, backdoor access for intelligence agencies, and alignment on issues like Cuba and Venezuela that many Latin American nations view as inappropriate extraterritorial coercion. Brazil's 2026 elections bring to power a government explicitly committed to digital sovereignty and South-South cooperation, viewing Chinese technology partnerships as liberation from Northern dominance rather than new dependency.

China's Digital Silk Road investments accelerate, offering comprehensive packages that include infrastructure financing, technology transfer, training programs, and market access on terms Western competitors won't match. Brazil, Argentina, Bolivia, and eventually Chile accept these offers, integrating their telecommunications networks, data centers, cloud infrastructure, and AI systems into predominantly Chinese technology stacks.

Mexico faces a stark choice between economic integration with its northern neighbors and solidarity with Latin American partners. Geography, trade dependence, and security cooperation push Mexico decisively toward the United States. The USMCA framework deepens into security and technology cooperation that makes Mexico essentially an extension of North American systems.

The hemisphere divides along a rough line: North America plus Central America and Colombia align with U.S. technology standards and governance frameworks, while South America's major economies embrace Chinese systems. Nations like Peru, Ecuador, and Uruguay get caught in the middle, facing pressure from both sides and struggling to maintain relationships with technological blocs that increasingly demand exclusive alignment.

Implications for States

Security degrades as the hemisphere fragments into competing surveillance and communication networks that can't easily interoperate. Military cooperation becomes difficult when forces use incompatible AI-enabled systems. Intelligence sharing breaks down as countries fear data flowing to geopolitical rivals through compromised infrastructure.

Sovereignty proves illusory for most nations. Brazil and Argentina discover that Chinese technology partnerships create dependencies as severe as American ones, with expectations about political alignment that limit policy autonomy. Mexico finds that deep integration with U.S. systems means accepting Washington's priorities even when they conflict with Mexican interests. Smaller nations get squeezed between competing demands, unable to satisfy both blocs simultaneously.

Economic development suffers as fragmented markets prevent achieving scale. Brazilian AI companies can't easily serve Mexican markets. Argentine fintech innovations face barriers in Colombian adoption. The hemisphere operates multiple incompatible systems where it should leverage common language, culture, and geography for integrated development.

Implications for Firms

Market access fragments painfully. Companies must choose which bloc to prioritize, knowing that deep integration with one system creates barriers in the other. A Brazilian software firm building on Chinese cloud infrastructure and AI models faces restricted access to North American markets. A Mexican manufacturer deploying U.S. AI systems struggles to expand operations into South America.

Compliance costs explode as firms operating across the divide maintain separate technology stacks, separate data storage, separate AI models, and separate governance processes for different jurisdictions. Only the largest multinationals can afford this duplication; smaller firms must pick sides.

Location risk intensifies dramatically. A firm dependent on cross-hemisphere supply chains faces constant uncertainty about whether geopolitical tensions will disrupt operations. Data flows that work today might be banned tomorrow. Technology transfers permitted under current rules could become illegal as blocs impose stricter controls.

Implications for Societies

Social cohesion fractures as the information ecosystem fragments. Brazilians and Mexicans increasingly live in different digital realities, consuming content filtered through incompatible AI recommendation systems shaped by different values and priorities. Cross-border understanding deteriorates as shared cultural spaces disappear.

Opportunity distributes unevenly based on which bloc offers better economic prospects. Brain drain accelerates from South American nations toward North American opportunities if U.S.-aligned systems prove more dynamic. Or it reverses if Chinese-backed development in South America creates opportunities unavailable in northern systems. Either way, talent flows create winners and losers rather than rising tides lifting all boats.

Democratic voice weakens as authoritarian-leaning AI governance in Chinese-aligned systems normalizes surveillance and control while market-driven governance in U.S.-aligned systems allows algorithmic manipulation and platform power to undermine informed citizenship. Neither model adequately protects democratic participation.

Critical Vulnerabilities

This scenario assumes Brazil and Argentina accept Chinese partnership despite clear sovereignty costs, which may prove politically unsustainable when populations recognize the dependencies being created. It assumes the United States can maintain Mexico's alignment even as domestic Mexican constituencies push for Latin American solidarity. And it assumes the dividing line remains stable rather than shifting as countries reassess which alignment serves their interests, creating constant uncertainty.

Scenario C: Muddling Through (Pragmatic Plurality)

In this scenario, the Americas avoids both full integration and stark division, instead developing a messy plurality where different countries maintain different alignments while preserving enough cooperation to prevent complete fragmentation.

How We Get There

No single vision for hemispheric AI governance achieves dominance. Brazil pursues digital sovereignty partnerships with both Chinese and European partners while maintaining economic ties with the United States. Mexico deepens North American integration while selectively partnering with South American countries on specific initiatives. Chile leverages its trans-Pacific position to broker between competing systems.

Pragmatic cooperation emerges around specific domains where mutual interest overcomes geopolitical tension. Hemispheric nations coordinate on cybersecurity threats, develop compatible standards for autonomous vehicle testing, and share research on AI applications in agriculture and climate adaptation. But they don't attempt comprehensive alignment, recognizing that fundamental differences in governance philosophy and geopolitical orientation make that unrealistic.

Technology stacks remain diverse but develop interoperability layers that allow cross-system communication where necessary. A Brazilian health system using Chinese AI infrastructure can still exchange data with Colombian counterparts using U.S. systems through carefully designed interfaces and protocols. It's inefficient compared to unified systems, but it works well enough to prevent complete isolation.

Different countries experiment with different governance approaches, creating a laboratory of regulatory models. Canada implements strict EU-inspired frameworks. The United States maintains market-led approaches with federal preemption of state rules. Brazil pursues developmental regulation with sandboxes and sector-specific guidelines. Mexico adopts constitutional provisions that allow flexible adaptation. Rather than converging toward one model, diversity persists but with enough transparency and policy learning that particularly dysfunctional approaches get abandoned.

Implications for States

Security remains adequate but suboptimal. Nations can't achieve the integrated defense posture of Scenario A, but they avoid the hostile fragmentation of Scenario B. Military cooperation continues in domains where compatible systems exist while accepting limits where incompatibility prevents full integration.

Sovereignty gets preserved in some dimensions while compromised in others. Brazil maintains more control over domestic AI governance than in either full integration or Chinese alignment scenarios, but at the cost of isolation from some international cooperation. Mexico benefits from North American economic integration but must navigate U.S. pressure on governance alignment.

Economic development proceeds unevenly. Some countries successfully leverage their positions, like Chile benefiting from connecting different technology spheres, while others get stuck in no man's land, unable to fully access any major bloc's opportunities. Regional inequality within the Americas increases as successful adapters pull ahead while others fall behind.

Implications for Firms

Market access requires strategic navigation. Successful firms develop capabilities to operate across different systems, maintaining flexibility about which standards to prioritize for which markets. This demands sophisticated legal and technical capabilities that advantage larger players but also creates opportunities for specialized service providers helping smaller firms navigate complexity.

Compliance costs remain elevated but manageable. Rather than the explosion of Scenario B where firms must maintain completely separate systems, interoperability layers and mutual recognition agreements reduce duplication while still requiring careful attention to varying requirements across jurisdictions.

Location risk becomes a strategic variable that firms can optimize. Rather than facing binary choices about which bloc to join, companies can position operations to preserve optionality, locating critical functions in jurisdictions that maintain relationships across divides while accepting that this limits access to bloc-specific benefits.

Implications for Societies

Social cohesion varies by country and subregion. Areas with stronger regional integration, like Central America and the Caribbean closely tied to North American systems, maintain shared information ecosystems. Areas with more diverse orientations, like the Southern Cone, experience more fragmentation but also more cultural plurality.

Opportunity distributes based on individual countries' success navigating complexity rather than uniform hemispheric patterns. Talented individuals face choices about which systems offer better prospects, but the choices aren't binary. A Brazilian AI researcher might study in Canada, work for a Chilean startup serving Latin American markets, and eventually return to São Paulo to build companies operating across multiple technology ecosystems.

Democratic voice depends heavily on domestic governance quality. Countries that implement strong transparency and accountability requirements maintain meaningful citizen participation in AI governance. Countries that adopt permissive frameworks allowing unchecked surveillance and manipulation see democratic erosion. The hemisphere shows what different governance choices produce rather than converging toward a single model.

Critical Vulnerabilities

This scenario's stability depends on all parties accepting suboptimal outcomes rather than pushing for their preferred vision. It assumes major powers tolerate pragmatic plurality rather than demanding exclusive alignment. It requires sustained diplomatic skill to maintain cooperation amid diversity. And it risks sliding toward fragmentation if specific crises, like Taiwan Strait conflict or Brazilian constitutional crisis, force countries to choose sides more definitively.

Strategic Implications Across Scenarios

Examining these scenarios reveals several strategic insights about choices facing the Americas today.

First, integration requires sustained political commitment that's difficult to maintain across electoral cycles and changing administrations. The Pan-American Bloc scenario demands that the United States accept genuine partnership rather than demanding subordination, that Brazil subordinate sovereignty rhetoric to practical cooperation, and that all parties maintain alignment across multiple election cycles. History suggests this is possible but far from guaranteed.

Second, fragmentation serves external powers more than hemispheric interests. The Fragmented South scenario primarily benefits China and potentially Europe by dividing the Americas into competing camps unable to coordinate effectively. No nation in the hemisphere, not even the United States, gains from this outcome compared to alternatives, but it could emerge anyway from uncoordinated national decisions that make local sense but produce collectively suboptimal results.

Third, muddling through may be the most realistic scenario but also the least satisfying to everyone. It avoids the worst outcomes of fragmentation while failing to achieve integration's full benefits. For policymakers seeking clear strategic direction, the messy plurality of Scenario C frustrates. But it may be the equilibrium toward which diverse democracies with varying capabilities and priorities naturally gravitate.

Fourth, technological choices made in the 2025-2030 window will constrain options for decades. Infrastructure investments, governance frameworks, and partnership agreements create path dependencies that future governments inherit. Reversing course becomes expensive and politically difficult once systems get built and interests coalesce around existing arrangements.

Fifth, the Americas possesses genuine advantages, geographic proximity, cultural and linguistic affinities, democratic institutions, and resource endowments that could support genuine integration if political will exists. But those advantages aren't self-executing. They require deliberate choices to build cooperation rather than defaulting to fragmentation.

What Comes Next

We've examined three plausible futures for 2035, each built on trends visible in 2026 but compounded through a decade of choices not yet made. The Pan-American Bloc represents optimistic integration. The Fragmented South shows hemispheric division. Muddling Through depicts pragmatic plurality. Reality will likely contain elements of all three, varying by domain and evolving over time.

Next week, in our final volume, we synthesize everything examined across this series. We'll return to the fundamental questions posed in Week 1: What does AI mean for power, prosperity, and security in the Americas? Who will benefit and who will fall behind? Can the hemisphere shape AI development or will it be shaped by forces beyond its control?

The scenarios presented today aren't predictions. They're warnings and opportunities, showing what could emerge from choices being made right now about investment, alignment, governance, and cooperation. The 2035 that actually arrives will result from thousands of decisions by governments, firms, and citizens across the hemisphere. Those decisions haven't been made yet, which means the future remains contestable.

This is Part 9 of a 10-part series on The Geopolitics of Artificial Intelligence in the Americas by Core Geopolitical Insights LLC. Follow along each week as we explore how this transformative technology is reshaping power, prosperity, and security across the Western Hemisphere. | Next week: Synthesis: The AI Crossroads