Constraints Create Routes

I have been thinking about geographic discoveries. Why did Europeans go looking for new sea routes to Asia?

The simple version is that the Ottomans blocked the East-West trade routes, so Europeans had to go around them. I think that is directionally right, but probably too clean. It was not like one day someone in Istanbul put a giant “closed” sign on Asia.

Trade still existed. Goods still moved. Venice, the Ottomans, Arab merchants, Indian Ocean traders, everyone had a role.

But the route was expensive, intermediated, and politically constrained. And that is enough.

Sometimes you do not need a wall. You just need a tollbooth, a chokepoint, a dependency, a margin structure that makes everyone else feel stupid for accepting it.

Then someone starts asking: can we go around this? That is the part I find interesting.

A lot of innovation is not born from abundance. It is born from frustration. The existing route works, but it works on someone else’s terms. So you look for another route.

Portugal did not wake up one morning and say, “what if we had a fun little ocean adventure?” They were trying to bypass a system. They wanted direct access to gold, spices, India, Asia. They wanted to remove the middleman. The ocean became interesting because the land route was controlled.

This pattern shows up everywhere. Oil dependency is bad, so people build alternatives. EVs, batteries, nuclear, solar, efficiency, domestic drilling, strategic reserves. None of these are just cute inventions. They are responses to being vulnerable.

If you depend on something critical and someone else controls it, your brain changes. You stop optimizing inside the current system and start looking for an exit.

That is why I think the AI situation is interesting. Right now, frontier LLMs are basically a US-China game.

Maybe that sounds too harsh, but I think it is true in the strategic sense. The US has the frontier labs, chips, cloud infrastructure, capital markets, talent density, and energy base. China has the scale, state urgency, industrial base, engineering depth, and increasingly very capable models.

Everyone else is kind of irrelevant. Mostly America and China.

So what does everyone else do?

One option is dependency. Just use American APIs. Maybe use Chinese open-source models when convenient. Accept that the most important economic tool of the next decade is imported.

But even open-source is not a full escape. A Chinese open-source model still has to run somewhere. That means data centers, chips, electricity, cooling, networking, and operational talent. And where does that usually live? AWS, Azure, Google Cloud, American chip supply chains, or some sovereign cloud that still depends on the same scarce inputs.

So the dependency moves around, but it does not disappear. That feels unstable.

Countries do not like depending on foreign oil. They will like depending on foreign intelligence even less.

And maybe the best-case scenario is that AI becomes a commodity. Maybe models get cheaper. Maybe inference costs collapse. Maybe everyone can access intelligence the way they access electricity or cloud software. That sounds nice.

But even then, who is selling the commodity? Mostly the US and China.

That is in some ways worse than energy. With oil, gas, coal, uranium, hydro, solar, wind, there are many countries with some form of supply or substitute. You may hate your dependency, but you can diversify it. You can buy from the Gulf, Norway, the US, Australia, Indonesia, Russia, Canada, Brazil, whoever. It is messy, but the map has options.

With frontier intelligence, the map may have two real sellers. So even if AI becomes cheap, it may not become geopolitically safe.

Maybe non-US and non-China countries can pool resources. Europe, the Gulf, India, Japan, Korea, Singapore, maybe some coalition of capital, energy, talent, and demand. In theory, that sounds reasonable.

But even then, I am not sure. These systems cannot simply be copied. Talent is hard to copy. Chips are hard to copy. Energy is hard to copy.

Data centers are hard to copy. Research culture is hard to copy. Distribution is hard to copy. The feedback loop between users, products, infrastructure, and model improvement is especially hard to copy.

This is why I think the geopolitical implications are huge. I just do not know the solution.

So the question is: what is the AI version of the sea route around the Cape?

I do not know.

Maybe the constraint forces creativity. Or maybe this time a few countries really take off and the gap between the US, China, and the rest of the world becomes meaningfully bigger. You still have places like the Netherlands, Korea, and Japan inside the supply chain, so maybe they stay relevant too.

But for countries that are not in the AI supply chain, I am not sure how they stay competitive. Especially if robotics takes off sharply too. That would be brutal for emerging markets.

I know this is probably a five- to ten-year horizon. But if things are moving this fast, who knows.

That is usually where things get interesting. The Portuguese did not beat the Ottomans by becoming better overland traders. They changed the map.

Maybe the next wave of AI innovation will come from the same impulse: not because everyone has equal access to the frontier, but because they do not.

Constraint creates rerouting. And sometimes the reroute becomes the new world.