The World Trade Organization recently adjusted its trade projections for 2025 accordingly. The global trade body said there will be a substantial decline in merchandise trade and a minor decline in services trade, mainly driven by North America’s new projections of a 12.6% decline in exports and 9.6% in imports in 2025.

The new trade environment provides fertile ground for tech companies to develop new AI offerings that help businesses with their awareness, monitoring, calculation, compliance, risk management, and customs paperwork and payments.

The offerings are diverse. Several AI companies focus on automating the classification of goods and related tariff calculations while improving trade compliance. This complex process has always been one of the most challenging parts of international trade. For example, Avalara, a US software company, developed its Avalara Automated Tariff Code Classification, an AI-driven system designed to simplify and speed up the tariff classification process.

Conversely, governments are using new AI technologies to help them monitor and manage customs and tariffs better. ScanTech AI Systems, a Georgia-based American tech company, has developed its latest technology, CustomsTrace AI. It helps state agencies identify and verify tariff-sensitive goods at national borders and prevent the unauthorized or illegal importation of restricted items.

While trade wars force companies to adjust their supply chains, inventory management, and the locations of the manufacturing facilities to optimize free trade and shipping costs, it has to be supported by sophisticated data management systems. Thus, other companies develop AI-powered offerings for the shipping and customs processes to address labor and shipping concerns. Avathon, a California-based industrial AI company, introduced an AI software that provides risk management solutions for the entire process.

As the trade wars global discussions cool off to help financial markets recover, AI tech companies must maintain a sustainable business model to continue their growth regardless of market conditions.

US President Donald Trump announced last week the creation of the first American sovereign wealth fund. He had pledged during his campaign to pursue such a policy, but this time, he formalized it with an executive order directing a plan for the fund to be developed within 90 days.

The news about the emerging US Sovereign Wealth Fund should not surprise those who follow trends in sovereign finance. Various developed countries, such as the United Kingdom and France, have explored or executed the idea of a new sovereign fund—despite fiscal challenges—to promote industrial policies, protect national champions from foreign takeovers, or advancing technology-advanced but vulnerable sectors.

The US government’s initiative is also driven by the recognition that federal assets are underutilized, creating an opportunity to “monetize the asset side of the US balance sheet for the American people,” according to the US Treasury Secretary Scott Bessent.

“America is locked out of the US dynamic capital markets and returns because we are not a player,” argues Chris Campbell, former assistant secretary of the US Treasury for Financial Institutions during Trump’s first term, “and the burden is on the taxpayer to fund the government.”

The Trump Administration has not provided specifics on the fund’s risk profile, asset allocation, governance structure, transparency, or reporting requirements—key factors that typically define a sovereign wealth fund. The news immediately raised skepticism among financial commentators, some of whom view the new initiative as a way to allocate part of the Treasury’s general budget to a discretionary fund controlled by a select group of insiders. Similar structures have, in other countries, led to corruption and inefficient investments—as seen in Malaysia and Libya. Whether the details of the new fund will support these concerns remains to be seen.

In any case, Congress must approve the fund’s creation—an uphill battle, given longstanding resistance to privatizing federal assets and services, according to Campbell.

While certain US states have their own sovereign wealth funds—such as the Alaska Permanent Fund, which is financed by the state’s income from natural resources—the United States lacks a national fund at the federal level. Establishing such a fund could position the US as a major player in the international sovereign wealth community—an intriguing shift at a time when Trump’s ‘America First’ agenda has led the country to withdraw from many global organizations and forums.

One such forum is the International Forum on Sovereign Wealth Funds (IFSWF), which operates under the International Monetary Fund umbrella. According to its mandate, the IFSWF aims to strengthen the sovereign wealth fund community through dialogue, research, and self-assessment. This unique forum brings together funds from different countries, both developing and developed economies, with distinctively different transparency and asset-allocation strategies. Yet, considering the new commercial focus of the US Administration, US participation through state and federal funds can support global markets and promote US leadership. A fund’s affiliation with the Federal Reserve will strengthen US participation in such a forum.

In fact, the announcement alone has already triggered broader debate about how the United States can leverage its resources and financial infrastructure for strategic investments—both domestically and internationally. The discussion could help cultivate the investment expertise within the US government, develop a pipeline of institutional investing talent, and position commercial investments as tools for national security and diplomacy.

The new trend is forcing sovereign investors to reassess their asset allocation strategy and risk management.Many sovereign funds and central banks have upped their digital currencies exposure to capitalize on the growing market and its value. For example, Norway’s sovereign fund  has become a cryptocurrency market leader by investing in crypto-related businesses.

The fund indirectly owned 2,446 BTC at the end of the first half of 2024, an increase of 938 BTC since the end of 2023. The US government currently holds over 200,000 BTC, valued at more than $20 billion, most of it seized from criminal investigations. The US is
one of the 13 nations holding bitcoin, according to a recent report by crypto exchange River. The UK and El Salvador, market pioneers in digital currencies, also hold significant bitcoin reserves. The UK has approximately 61,200 BTC, according to the report’s authors.

As more governments struggle with inflation and limited money supply, bitcoin holdings can hedge against inflation, similar to the traditional role of gold as a strategic asset in a portfolio. Also, bitcoin’s value is not correlated with other asset classes, such as bonds and equities, meaning it could serve as a tool for the bank’s risk management strategy. In addition, central banks often have financial arrangements with other central banks, which creates a counterparty risk in cases of political instability and non-performance. Bitcoin, like other cryptocurrencies, does not rely on central banks to increase its amount in circulation. This reality helps central banks that own digital currencies, especially bitcoin, reduce that third-party risk.     

The UK’s new Labour government announced this month that it is creating a new sovereign fund as part of its effort to accelerate economic growth, boost foreign direct investment, and generate more jobs. Chancellor of the Exchequer Rachel Reeves announced that the existing UK Infrastructure Bank would be converted into the National Wealth Fund (NWF), headquartered in Leeds. The initial capital target will be £27.8 billion. The government will introduce legislation allowing the NWF to invest in assets classes outside the infrastructure category, similar to other global sovereign funds.

The new sovereign fund is getting off the ground fast; already last month, it announced that it is supplying financial guarantees to Barclays UK Corporate Bank and Lloyds Banking Group on a combined £1 billion of funding to accelerate the retrofitting of social housing in the UK.

The NWF’s business model will include mobilizing private capital in support of government investment projects, experimenting with new blended finance solutions, increasing the size and impact of investments, and adding performance guarantees. The focus of the NWF’s investments will be clean energy and growth industries, including green hydrogen, carbon capture, and gigafactories. The fund could raise £100 billion of private finance, according to the New Economics Foundation.

The government has faced growing criticism that it has not done enough to address the UK’s growing structural, regional, and sectoral disparities and the inability of mayors and other political and business leaders to effectively deploy capital in major investment projects. British pension funds’ participation in such projects has been limited historically; in fact, the decision to create the NWF was taken simultaneously with one to allow pension funds to invest alongside the British Business Bank, which provides capital to private businesses.

The UK is not the only G7 economy that is seriously considering the launch of a new sovereign fund. Both Democratic and the Republican lawmakers in the US floated the idea of a new American sovereign fund in their elections campaign, arguing that it could unlock fresh ideas for strategic investments, economic growth, and jobs creation.

The list of such exchanges is growing, and the trend is global. For example, the Eastern Caribbean Securities Exchange (ECSE) is the Caribbean’s major regional stock exchange, designed to attract companies with regional interconnectivity and regional investors. Companies such as Grenada Electricity Services from Grenada and the Bank of Nevis from St. Kitts and Nevis found their listing home there.

Recent discussions about a new stock exchange in the US state of Texas, which would compete against the triumvirate of US exchange operators—the New York Stock Exchange, Nasdaq and CBOE—have amplified the trend.

The Texas Stock Exchange (TXSE), to be based in Dallas, will be initially funded with a $120 million investment. In recent years, anti–New York sentiment around issues such as compliance requirements and environmental, social and governance rules has triggered a backlash among many businesses. This, among other factors, has led to the current Texan proposal.

Major liquidity providers, such as BlackRock and Citadel Securities and many Texas-based Fortune 500 companies, are backing the proposed all-electronic bourse.

The TXSE founders applied for US Securities and Exchange’s approval, which is currently pending. The new exchange would give companies a reduction in the high listing requirements often associated with the established exchange operators. Texas is perceived as a business-friendly, low-tax state with limited regulatory requirements, and the entrepreneurs behind this venture hope to bring this type of thinking to the stock exchange space while reducing red tape. Texas’ specialization in the energy sector, meanwhile, would provide energy companies with another avenue for corporate finance solutions.

This SWF growth has provided markets with additional liquidity, and many of these funds have become leading limited partnerships in financial markets. Many other governments are watching the trend with interest.

The strategy is proving successful. Recent months showed a new wave of SWF, not driven by the typical economic forces that created the older funds, such as oil and gas revenue. Egypt’s main fund, the Sovereign Fund of Egypt, has launched a new separate sovereign industrial fund that will invest in various industrial sub-sectors in Egypt including, among other things, food, building materials, and manufacturing of railway and train supplies. This new model follows locally oriented funds, like Singapore’s Temasek, which traditionally supports national champions without worrying about the local economy’s inflated prices.

The proposed structure allows the Egyptian government to tap other pools of capital, such as other sovereign governments and funds, to serve as investors in the new vehicle. Reaching out to governments like the UAE will also strengthen regional economic and security cooperation.

Similarly, Ireland faces a significant surplus created by corporate tax paid by foreign multinationals. Towards the end of last year, it announced that it would establish two sovereign funds to absorb this revenue and reinvest in local and international markets. The government has started executing the plan in recent months and allocated around $100 billion to the funds, one of which also targets local and short-term assets. The new sources of capital for these emerging funds, the growing interest in local assets, and the revival of local industries reflect the latest political and economic environment designed to support local players in an inflationary and high-interest context.

The shift is global. According to International Data Corporation (IDC), 80% of chief information officers will leverage organizational changes to harness AI, automation and analytics by 2028 in the Asia-Pacific region.

This new reality is forcing organizations to develop AI leadership skills in-house and coordinate AI implementation across multiple parts of the company while strengthening their AI strategy and goals.

More and more companies, consequently, are creating a chief AI officer role to coordinate AI applications internally and better utilize AI in dealing with stakeholders such as suppliers and customers. Foundry Report revealed that 11% of midsize-to-large organizations have already appointed a chief AI officer and an additional 21% of large organizations are searching for one.

The appointments cross sectors and are appearing in both public and private organizations. In the US, President Biden is requiring all governmental agencies to appoint a chief AI officer. On the private side, leading technology companies such as software powerhouse SAP, older industrial leaders such as Japan’s Hitachi, and others ranging from midsize to large companies are rushing to find and hire one. Smaller companies are still addressing the need via other internal tech groups.

The advent of the chief AI officer fits into a wider trend to create more specialized roles within organizations. In the past, compliance, risk, and innovation roles, for example, were under other corporate functions; now, they have their own leadership structure. The chief AI officer role, like the chief risk officer, is designed to consolidate capabilities and project the significance of the role to the organization. The new role has faced some backlash recently, however, including in the AI space, as some scholars and industry leaders have argued that all employees should have a hand in this strategically important area.

Since the Covid-19 pandemic and the logistical and supply-chain challenges that came with it, corporate financial and operational professionals have started to realize the potential economic value of such data and its usefulness in cost-management decisions.

International organizations have pushed for better coordination between the public and private sectors that share this space and its wide-ranging fields of purview, from port ownership and management to security. The World Economic Forum, for instance, has launched a maritime working group, pushing for better information sharing and coordination among public and private entities.

This working group identified the quality, integrity and real-time availability of trusted data, focusing on key performance indicators and artificial-intelligence data-driven risk management systems, among others, as crucial factors behind better information sharing and coordination.

Recent geopolitical and national-security developments have highlighted the uncertainty and ongoing risks that are unique to international shipping operations. Houti attacks in the Red Sea have prompted many maritime companies to change their sailing routes, increasing pricing and causing delays in delivery times. Meanwhile, severe droughts forced the Panama Canal to reduce shipping capacity by more than 30%.

These new realities have given rise to startup companies focused on data collection, gleaning actionable information from data sets, and connecting shipping data to other systems. For example, Winward, a UK-listed tech company, provides insights to help identify and track maritime criminal activities in real time. Other companies, like FleetMon, can provide maps for real-time vessel tracking and historical data for ship movements, a critical part of supply chain knowledge. Mainstream financial-data companies like IHS Markit, meanwhile, are adding maritime data to their portfolios.

The growing interest in maritime information can lead to positive and negative action items, whereby companies can manage their supply chain effectively in real time or avoid areas where significant risk is looming, based on early-detection data.

In 2023, five new SWFs and nine more offices internationally opened their doors. The impact cannot be understated. Their financial activities, for example, have been an important part of the energy transition efforts.

An essential part of the growth story has been the rise of sovereign development funds as part of the global economic development push. Sovereign development funds are a tool to support economic growth and development to accelerate private market investment. Traditionally, these funds invest in infrastructure and human capital, leading to job creation and poverty reduction. Examples include the Bayelsa Development and Investment Corporation of Nigeria and South Africa’s Industrial Development Corporation.

Leading economies have become limited or general partners in such funds to promote economic development in target markets and strengthen political, diplomatic and security relations. For example, the China-Africa Development Fund is designed to inject Chinese capital into African projects.

In 2021, Indonesia launched a sovereign development vehicle, the Indonesia Investment Authority, in which China has become a leading partner. According to both governments’ statements, China’s Silk Road Fund has signed an agreement to invest approximately $3 billion.

Beijing expects the Indonesian leadership to open more sectors to foreign investment. The United Arab Emirates followed China with a pledge to invest $10 billion. Indonesia also set up a $3.75 billion toll-road fund with Canadian, Dutch, and Emirate sovereigns to develop Indonesia’s highway system further.

Similarly, the Filipino government approved its first-ever SWF, Maharlika Investment Fund, in mid-2023. The fund will support economic development of agricultue, climate mitigation, digitalization and energy projects, according to fund documents. The launched structure will encourage foreign investors, including other sovereigns, to coinvest in the country’s key projects with the Philippines government.      

Two of the several blood-drenched conflicts on the agenda at the 32nd Arab League summit, which concluded last month in Jeddah, Saudi Arabia, were the recent civil war in Syria and Ukraine’s ongoing defense against Russia. Syrian President Bashar al-Assad was readmitted to the league after 12 years of expulsion following the 2011 Arab Spring uprising. He was attending the summit for the first time since. Ukrainian President Volodymyr Zelenskyy also appeared, on his way to the G7 summit in Japan, to plead for support from Arab nations.

Assad used the forum to pitch a new alignment of world powers and for the league to reject external intervention in the politics of Arab states. More urgently, he aimed to persuade league members to force Western nations to lift sanctions against Syria. They can benefit, he argued, from rebuilding Syria and from multiple, sometimes even conflicting, alliances in a world not dominated by one or two superpowers.

Syria’s economy suffers from high inflation, a sinking currency and limited energy supplies. The Syrian pound hit an all-time low of 9,000 to the dollar in May. Doing business with Syria while Western economic sanctions are still in place could put Arab League members at risk. Even the recent Saudi-Iranian diplomatic truce did not immediately include complete restoration of bilateral commercial relations.

Zelenskyy’s ask at the Arab League Summit was also a big one. He wants the Arab nations to leverage their close relationships with Moscow, as well as its allies China and Iran, to end the Russian invasion. This, too, remains to be seen. But Assad’s and Zelenskyy’s visits to the summit underscore the opportunity many Arab nations seemingly face in a conflict-ridden global landscape to pursue policies that once would have been seen as inconsistent: supporting Ukraine at the same time they reconcile with a Russian-allied regime like Assad’s Syria, for example.