From Washington to New Delhi, governments are allocating large sums to reduce dependence on foreign suppliers and to ensure they can keep operating if a crucial external link is severed. Policies and investments differ by country, but the underlying objective is the same: to construct a usable backup plan.
What the major players are doing
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United States: To reshore rare-earth and magnet production, Washington is funding projects and supply chains. The Round Top project in Texas aims for a commercial start in 2028; the U.S. government has made available up to $277 million in direct support and $1.3 billion in loans to develop a domestic “mine-to-magnet” chain.
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China: Under Xi Jinping, China is preparing a roughly $295 billion national AI infrastructure program intended to source at least 80 percent of key technologies from domestic suppliers. Today that is difficult without Nvidia, AMD and other U.S. technologies, so the plan aims to reduce that dependence within a few years.
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Russia: Vladimir Putin has announced plans for series production of small nuclear reactors and intends to build 38 new nuclear power blocks in less than two decades, mainly in the Urals, Siberia and the Far East. Putin also stressed that Russia must avoid critical dependence on foreign AI technologies — which requires significant domestic power generation, data centres, chips and cooling capacity.
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European Union: The EU aims to create some €800 billion of additional defence fiscal space by 2030. Within that, the SAFE programme includes €150 billion in loans, and loosening budget rules could open roughly €650 billion more capacity for member states. The aim is to expand European defence-industrial capabilities, stockpiles and supporting infrastructure.
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BRICS and India: The 2026 New Delhi declaration backed local-currency settlements, interoperable payment systems and multiple financing channels, while noting there is no single model for everyone. Narendra Modi’s government allocated 1.275 trillion Indian rupees to the Semicon 2.0 programme so that India builds not only chip packaging but also design, manufacturing, materials, machinery and skilled workforce capacity.
Why now?
The past three decades of globalisation prioritised cost optimisation: produce where it is cheap, source energy where favourable, rely on a single trusted supplier, and minimise inventories. That model works in peacetime but becomes fragile when geopolitical tensions disrupt trade or technology flows. An efficient supply chain can quickly become a dependency chain.
Geopolitical shocks — the war in Ukraine, the U.S.–China technology rivalry, and energy-security concerns — have turned what once were theoretical risks into immediate policy priorities. As a result, governments and large firms are investing in defensive capabilities and redundancies.
What this means for SMEs
Small and medium-sized enterprises face a similar debate on a much smaller budget. The rapid adoption of AI is reshaping jobs: U.S. companies cited AI in connection with more than 120,000 announced layoffs during the first nine months of 2026. While not every affected position was directly replaced by an algorithm, the cost-reduction incentives are clear — a subscription to an AI service can be cheaper than two paid employees.
For a Hungarian SME owner, the arithmetic can be convincing in the short term: why keep separate copywriters, graphic designers, marketers or analysts if fewer people using AI can handle multiple roles? Over time, however, outsourcing or shedding institutional knowledge carries risk: losing decades of customer familiarity, undocumented manufacturing know-how, routines, relationships and other tacit expertise that algorithms may not fully replicate.
Hungary: recent labour data and open questions
According to the Hungarian Central Statistical Office (KSH), the number of unemployed increased by 10,000 in monthly figures between March and August 2026; using a three-month rolling average, the rise is 16,000. It is not clear how much of that change can be attributed to AI specifically, but the trend points to risk.
The K&H SME confidence index fell by 7 points from the previous quarter to stand at 6, though the indicator remains in positive territory.
Every entrepreneur should ask themselves a hard question relevant for the coming years: if a supplier fails, a major customer disappears, energy costs surge, an AI provider changes terms, and some company knowledge was already outsourced to machines — how much real choice and operational flexibility will remain?
Cost of independence versus cost of dependence
Strategic autonomy carries a price tag, but dependence also has a cost if a critical link breaks. International examples and domestic data together suggest that striking a balance between independence and competitiveness will be a central challenge for states and businesses alike in the years ahead.
Author: Kovács Sándor, business consultant and member of the Piac & Profit expert team, with more than 25 years of practical experience focused on developing the Hungarian SME sector.
