AI, logistics and geopolitics – The silent revolution: How China is seeking control over global trade through warehouses

Intelligent logistics infrastructures as a power instrument of the future: Whoever controls the data in the warehouses controls the future.

The global economic order is shifting in a place long considered a purely operational necessity: the warehouse. What happens in these logistics centers is evolving into a factor whose strategic importance is comparable to semiconductor manufacturing or the energy sector. While Western countries primarily viewed logistics as an efficiency issue, China recognized early on that intelligent, automated warehouse systems are a crucial instrument for geopolitical power control. Control of these systems means control over data flows, supply chains, and the very rhythm of global trade.

This seemingly purely technological field is in reality a strategic instrument in the systemic competition between democracies and dictatorships, between decentralized markets and centralized planning. The figures underscore this development: The global market volume for artificial intelligence in logistics reached US$20.8 billion in 2025, representing exponential growth averaging 45.6 percent per year over the past five years. This development reflects not only technological progress but also a fundamental restructuring of global power relations, ultimately revolving around the question of economic sovereignty and dependence.

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Whoever controls the warehouses controls world trade – and China has known this for a long time.

The global economic order is currently shifting in a place long considered a purely operational necessity and rarely the focus of strategic attention: the warehouse. What happens in these logistics facilities will be no less significant in the coming years than semiconductor production or the energy sector. While Western countries long viewed logistics as a purely efficiency-related issue, China already recognizes that intelligent, automated warehouse systems represent an instrument of geopolitical power control. Control over warehouse systems means control over data flows, supply chains, and the very rhythm of global trade. What sounds like mere technology is, in reality, a strategic instrument in the systemic competition between dictatorships and democracies, between centralized planning systems and decentralized markets, between dependency and sovereignty.

The global market volume for artificial intelligence in logistics will reach $20.8 billion by 2025. This isn't simply a doubling or tripling – it represents an average annual growth rate of 45.6 percent over the past five years. For a technology field of this size, that's exponential. These figures don't just reflect technological progress, but a profound restructuring of power relations in the global economy. Any company that isn't yet fully automated will face significant economic pressure in the coming years. At the same time, technological leadership in this domain is already concentrated in very few hands – and these aren't the usual suspects from the West.

The silent revolution in bearing technology: From cost reducer to strategic instrument

The transformation of warehousing and logistics can only be understood by recognizing the three levels of this change: the operational level, the organizational level, and the geopolitical level. At the operational level, we have seen fundamental changes to physical processes in warehouses over the past few years. Amazon currently operates over 520,000 artificially intelligent robots in its fulfillment centers worldwide. These robots aren't simply more efficient—they enable Amazon to increase its cost efficiency by about 20 percent while simultaneously increasing the number of orders processed per hour by 40 percent. This isn't a 10 or 15 percent improvement; it's a fundamental redesign of how things are done. Computer vision systems in these warehouses now identify with 99.8 percent accuracy which item belongs where. This virtually eliminates incorrect deliveries.

These technologies don't work in isolation. DHL uses artificial intelligence to predict supply chains across 220 countries with 95 percent accuracy. It doesn't simply analyze historical data—the systems integrate weather data, traffic information, new pickup requirements, and emerging logistical dynamics in real time. The result: 25 percent faster delivery times and a saving of 10 million driving miles per year. Nike is implementing artificial intelligence in its global manufacturing network, managing over 120,000 different variations of a single product across 500 production sites. Delivery times are reduced by 50 percent, while fulfillment accuracy reaches 99.7 percent. This isn't just increased efficiency—it's efficiency magic.

But the most important aspect of all these developments is this: all these systems generate data. Immeasurable amounts of data. They collect every minute, every second, every movement. They know when goods are where. They recognize patterns in demand. They understand how international supply chains function. They can predict where bottlenecks will occur next week. These data streams are not simply byproducts of automation—they are the strategic nervous system of global trade. Whoever controls this data, whoever has access to this information, whoever is able to manipulate or block these systems, possesses a form of economic control that goes beyond traditional production capabilities.

At an organizational level, we are witnessing a parallel redistribution of power and influence. China has long benefited from its role as the world's manufacturing hub. But China already understands that the next phase of economic dominance is not just production, but the management of supply chains themselves. Alibaba's Cainiao network operates massive fulfillment centers where autonomous robots operate with near-perfect precision. JD Logistics achieves a reduction in fulfillment times of over 60 percent. Order fulfillment accuracy is 99.9 percent. This is not simply an imitation of Western systems—it is an independent technological capability that has developed in Asian warehouses.

China is not merely a follower, but in some respects a driver of innovation. In drones and aircraft artificial intelligence, Chinese companies are responsible for 55 percent of all breakthroughs seen in China, the EU, or the US. The development of swarm intelligence for logistics applications is particularly significant – here, China has long since overtaken the US, and the European Union lags far behind. Swarm intelligence means that hundreds or thousands of robots are not controlled by a central system, but communicate with each other in a decentralized manner and act in a self-optimizing way. This is a fundamentally different paradigm from the Western approach.

The invisible infrastructure of control: How power is redistributed

While the operational level of warehouse technology is technically fascinating, it becomes truly critical at the geopolitical level. The United States has a long history of cementing its economic dominance in hardware, software, and standards. The European Union has long attempted to use regulation as an instrument of power—the so-called Brussels Effect, whereby European standards for data protection or security become the international standard for operating in the EU market. But China plays this game differently.

Between 2000 and 2023, China invested approximately €138 billion in strategic sectors of the European economy. While this sounds like a large sum, what's important is that the success rate of acquisitions in sensitive technology sectors is around 80 percent. This is remarkable because in the US, where investment vetting is stricter, over 90 percent of such acquisitions have been blocked in recent years. The Chinese strategy is twofold. One model involves acquiring companies, gutting them, and transferring the technology to China – essentially, dismantling the companies. This was the case with the British chip designer Imagination Technologies: it was acquired by Chinese investors, the British engineers were either trained or laid off, and then the company was sold on after its valuable innovation capabilities had been extracted.

The second model is about long-term control. The Dutch semiconductor company Nexperia is a prime example. Chinese companies gradually acquired a stake in the company with the help of €800 million in state bank loans. Today, Nexperia is a beacon of Chinese expansion into Europe's semiconductor industry. This is strategy – not opportunism.

When these investment flows are linked to investments in port and logistics infrastructure, the picture becomes clearer. Chinese companies have acquired stakes in European ports, terminals, and logistics hubs. These investments are often justified by purely commercial motives—and in many cases, that's true. But the strategic significance lies elsewhere. China's ownership of a stake in a European port doesn't automatically mean it will block supply chains in peacetime. The reality is more subtle and dangerous: such investments provide insight into trade flow data. They influence investment decisions, the selection of suppliers for crane bodies, sensors, and logistics software. They create the possibility—not the necessity, but the possibility—that in a crisis, China could exploit regulatory delays, artificially created work stoppages, or the deliberate withholding of services to hinder military logistics or blackmail specific allies.

The mere perception of this possibility changes calculations: If European governments fear that Chinese companies have control over critical logistics infrastructure, they will be more hesitant in their decisions. This isn't paranoia – it's game theory. China doesn't even have to actively do this; the threat alone is enough.

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In-house production of key components is particularly advantageous. This allows for optimal control of quality, supply chains, and interfaces.

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The race for intelligence: Why AI factories will decide the fate of superpowers

The European Union has noticed these geopolitical shifts and is trying to respond. In October 2025, the EU expanded its network of AI Factories – specialized data centers that provide European startups and companies with access to high-performance computing compatible with European data protection and transparency standards. This may sound like a technical detail, but it is one of the more radical strategic initiatives the EU has undertaken in years.

The background is this: In the past, European startups wanting to work on artificial intelligence had to either go to American cloud providers or acquire their infrastructure in China. Both options lead to dependencies. A European AI startup based on Amazon or Google is strategically dependent on American corporate and potentially government decisions. A European AI startup working with Alibaba or other Chinese providers exposes itself to Chinese access to its data, code, and models. The AI ​​Factories offer a third option: European infrastructure, European control.

What initially appeared to be a clean infrastructure project is in reality an attempt to safeguard European sovereignty in a critical technology sector. If European AI systems are not trained on European infrastructure, but on American or Chinese systems, then these models will eventually become dependent on external sources – in their training data, their security updates, and their capabilities. This is not simply a technical problem; it is a problem of technological sovereignty.

Currently, AI factories are spread across specialized sectors. Finland is developing sustainable AI, Germany is focusing on automotive AI, Greece on maritime AI, and Italy on manufacturing AI. This is deliberate specialization, not accidental. Europe is trying not to compete with America and China in the race for generic AI capabilities—the EU would lose. Instead, it is trying to dominate in specialized applications where European industrial expertise offers an advantage. This is a smart strategy in the context of resource constraints.

The EU's planned investment in AI gigafactories amounts to €20 billion. That's not a small sum, but it's not astronomical either, especially compared to American or Chinese investments. The European Union knows it can't amass billions of training gigafactories like America can. Instead, it's trying to invest more strategically – less volume, but better focus.

However, there is a fundamental problem that the EU has not yet solved: The United States still dominates in the most advanced subfields of artificial intelligence – in machine learning, chip design, materials engineering, and quantum systems. China focuses on production-oriented subfields and achieves 65 percent of all new patents in these areas – an impressive feat for a single player. The EU, however, has isolated islands of excellence, such as ASML in semiconductor equipment technology or individual locations in quantum photonics and explainable AI. But there is no density. There is no scaling. There is no networking that ensures innovations multiply.

This is the European dilemma: depth without density. Density without scaling. Scaling without networking.

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The reorganization of labor relations: From people to machines, and back

Before fully understanding the macroeconomic impact of smart warehouse systems, one must also understand the level of human labor. The classic narrative of automation is that machines replace workers. This is partly true, but it is not the whole story. The reality is more complex and less bleak—but also less optimistic—than tech enthusiasts like to portray.

The data shows that industries investing heavily in automation don't simply reduce their workforce, but rather redefine it. In a warehouse that previously employed 100 people for manual order fulfillment, the same or even greater volume of orders can now be processed by 40-50 people plus automated systems. This means 50-60 people lose their jobs. But for the 40-50 who remain, the work changes fundamentally. They move from physically repetitive tasks to system monitoring, exception management, process optimization, and robot maintenance. This is conceptually different work. It requires different skills.

Countries like Malaysia and Indonesia have recognized that this transition won't happen automatically. They are launching national retraining programs to prepare logistics workers for digital operations. This is smart because it understands automation not as an enemy of employment, but as a catalyst for job transformation. In emerging economies, automation could actually lead to job growth—not decline—because it allows smaller logistics companies to compete without having to invest in huge workforces.

This is only possible, however, if retraining programs are effective and if psychological and social support for workers is included. In countries without such programs, automation in warehouses will lead to short-term unemployment, social tensions, and resistance to further technological adoption.

The hidden return of mercantilism: Why local warehousing is becoming strategically important

One of the most important yet least noticed phenomena is the relocalization of logistics infrastructure. After decades in which supply chains became increasingly global, complex, and interconnected, a countermovement is beginning. Not because globalization is bad, but because its vulnerabilities have become apparent.

Between 2023 and 2025, the percentage of companies identifying geopolitics as a significant risk to their supply chain rose from 35 percent to 55 percent. This isn't a minor shift—it's a fundamental change in corporate thinking. A large number of these companies are now pursuing a "China plus 1" strategy, meaning that while some production remains in China, alternative production facilities are being established in other countries. This is not only economically sound, but also geopolitically viable: by not being completely dependent on China, companies have more options.

But perhaps the more significant shift is this: If you pursue a regional or local warehousing strategy, intelligent automation is no longer optional—it's essential. A local warehouse with 50 employees may have fewer economies of scale than a large, centralized warehouse. But if you equip that local warehouse with AI-driven systems, automated robots, and real-time optimization, it can suddenly compete with large, centralized warehouses. This means that the ability to develop and sell intelligent logistics infrastructure is becoming a strategic advantage for countries and regions that control this technology.

Europe has understood that it cannot compete with China or America in global mass production. But Europe could compete in intelligent, state-of-the-art logistics solutions – if it maintains technological sovereignty in this area. This is a classic example of specialization: not being bigger, but being smarter.

Cybersecurity and the vulnerability of the interconnected supply chain

The phenomenon of intelligent warehouse systems also creates massive new vulnerabilities. A traditional supply chain was relatively robust against cyberattacks because it used many independent, unconnected systems. A hacker could disrupt individual warehouse systems, but not cripple the entire supply chain. Those days are over.

When a large logistics network relies entirely on artificial intelligence, IoT sensors, cloud infrastructure, and automated systems, the entire supply chain becomes simultaneously vulnerable to coordinated cyberattacks. A successful attack on the central AI system could cripple not just a single warehouse—it could bring an entire network of warehouses to a standstill.

This is not a theoretical risk. One-third of all security breaches in 2023 resulted from third-party access. A single misconfigured device, a forgotten login, a contractor with outdated credentials—and suddenly adversaries have access to critical systems. In a context where nation-states are actively seeking to disrupt supply chains, this becomes a real problem.

China is also developing highly specialized cyber capabilities for disrupting supply chains. This includes not only passive surveillance but also active sabotage capabilities. If China were to initiate a crisis with Taiwan or a regional conflict, cyberattacks on European or American logistics infrastructure could lead to a complete paralysis of supply chains.

This is a new form of military strategy – not direct confrontation, but disruption of economic nervous systems. It works asymmetrically: China doesn't need to destroy the entire supply chain; it only needs to cripple the crucial points to paralyze the West.

The consolidation of power: Whoever sets the standards wins.

One final critical point: standards. This may sound technocratic, but it's actually a question of power. Whoever sets the standards for intelligent logistics systems—how robots communicate with each other, how data is transmitted, how security is implemented—determines who can compete in this industry and who cannot.

In the 1990s, Europe set the standard for global telecommunications with standards like GSM. But then Europe lost this position. America took over with the internet and later with various software standards. China is now trying to dominate in selected areas such as 5G and IoT standards.

There is currently no clear winner in logistics standards. It's an open field. If the EU succeeds in enforcing European standards for smart logistics – not through regulation, but through technical excellence – then Europe can shape the field. That would be a form of soft power that goes far beyond traditional regulatory approaches.

But time is running out. China is already investing heavily in alternative standards. America is establishing standards through large tech companies. Europe is still hesitating, while the blueprint for the future is currently being written.

A new mercanitilism of data and algorithms

What do intelligent storage systems mean for the geopolitical order of the next ten years? Several conclusions suggest themselves.

First, control over logistics infrastructure will become a core element of geopolitical power—much like control over ports in the past or control over energy today. Countries and regions that develop leading intelligent logistics systems will not only benefit economically; they will also exert geopolitical influence. China already understands this. Europe is just beginning to understand it. America, in some ways, takes it for granted.

Secondly, the competitive dynamics between the blocs will shift. Traditional competition was based on production, materials, and labor costs. The new competition will be based on data, algorithms, and system integration. China has a structure that allows for massive and rapid scaling. America has innovative capacity and talent. Europe has regulatory expertise and specialized industrial strengths. Competition will be structured around these different capabilities.

Third, the resilience of supply chains will become a direct security concern – not for logistics companies, but for governments. NATO countries will begin to treat logistics infrastructure similarly to energy infrastructure or communication systems. This means government investment, security vetting, and strategic independence from potential adversaries.

Fourth, small and medium-sized enterprises (SMEs) will benefit. A world where intelligent logistics systems are readily accessible – for example, through European AI Factories or similar initiatives – is a world where a medium-sized company in Portugal or Lithuania can compete with large corporations. This isn't altruistic tech transfer – it's economic democratization, and it leads to broader innovation.

The next three to five years will be crucial. The investments being made now—in smart warehouses, robotics, AI systems, and data infrastructure—will shape the structure of global trade for the next two to three decades. Countries that lead the way here will not only have economic advantages; they will also have options that countries that follow will not.

For a long time, the warehouse was the invisible site of globalization, the place where goods were stored before embarking on their journeys. But the coming transformation will bring the warehouse out of the shadows and into the spotlight of geopolitical attention. The smart warehouse will become one of the most important battlegrounds of 21st-century economic competition. The question of who will win this battle remains open. But the battle itself has long since begun.

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