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Ivo Daalder, Former U.S. Ambassador to the United Nations, Addresses Geopolitical Risks at the Graaskamp Center Spring Board Conference

By Wisconsin School of Business

May 7, 2024

Ivo Daalder, President of the Chicago Council on Global Affairs and former U.S. Ambassador to NATO, kicked off the Graaskamp Center Spring Board Conference with his keynote address focusing on “Geopolitical Uncertainty: What to Expect. What to Fear.”  Speaking to the conference theme of “finding value and opportunities in uncertain times,” Daalder identified five areas of potential major risks: China, the war in Ukraine, the wars in the Middle East, the threat of A.I., and the threat to democracy caused by domestic political strife.

Daalder anchored his speech on the risk framework developed by former Secretary of Defense Donald Rumsfeld, that of “known knowns, known unknowns, and unknown unknowns.” Since known risks can be evaluated, and totally unknown risks cannot be anticipated, Daalder recommended that the audience focus on “known unknowns.” If we can predict roughly what conflicts might be coming, the “known unknowns” are chiefly how other geopolitical actors might react in those conditions.

Focusing on the three areas of foreign policy, Daalder expressed that incremental escalations in both the South China Sea and in the Middle East present significant risk of the United States being pulled into these conflicts. He asserted that Ukraine is currently losing its war against Russia, partly due to the significant delays caused by intense policy differences between Democrats and Republicans in approving additional aid from the U.S. for Ukraine. Even if the United States moved to a more decisive foreign policy stance, Daalder worried that the drawing of red lines or provision of aid may be too late to avoid significant ongoing regional conflict.

Artificial Intelligence (A.I.) poses another significant challenge for the U.S. The lack of a regulatory framework for A.I. means that private companies are steering the development of this technology without any security, protections, or safeguards for the general public. In addition to threat of private actors using A.I. in malicious ways, the energy needs of data centers powering A.I. represent an enormous strain on the existing energy grid and will require substantial investment in infrastructure. Daalder shared that the electricity used in data centers alone in 2026 will equal the entire energy needs of the country of Japan, with a population of 125 million.

At the top of Daalder’s list of the most concerning risks, however, are the threats to democracy as the deepening domestic divisions take place within the United States. As political polarization, disinformation, and other threats tear at the very foundation of American civic life.

He added that the threat of domestic actors to the democratic process of transferring power, as well as the growth in isolationist sentiment, undermine the ability of the U.S. to design and implement a long-term foreign policy strategy. If the intense polarization of political beliefs continues to negatively impact the democratic process, Daalder’s message to the conference: “our friends do not think we are reliable; our enemies think we are dysfunctional.”