Davos 2026: When World Leaders Stopped Pretending

Executive Summary

At the World Economic Forum Annual Meeting 2026 in Davos, Switzerland, international leaders publicly acknowledged what ISAR Global has been systematically documenting: the rules-based international order has collapsed, and great powers now openly pursue national interests without multilateral constraint. This represents a fundamental shift from governance rhetoric to governance reality – leaders no longer pretend the old system functions whilst pursuing contradictory national strategies.

This diagnosis finds independent confirmation from the UK’s premier defence and security institution. The Royal United Services Institute assessed on 22 January 2026 that “Russia, China and now the US, to varying degrees, reject an international order based first and foremost on international law and are pursuing power-based policies to manage affairs until a new order emerges.”¹ The pattern documented across nine world leader addresses at Davos 2026 demonstrates precisely how this power-based coordination functions operationally.

Between 20-22 January 2026, nine major addresses revealed a remarkable convergence on diagnosis coupled with radical divergence on response based purely on power position. All speakers acknowledged permanent systemic change: European Commission President Ursula von der Leyen referenced the 1971 Nixon shock and Bretton Woods collapse as historical parallel for today’s “permanent” transformation; Canadian Prime Minister Mark Carney declared “we are in the midst of a rupture, not a transition” and called the rules-based order a “pleasant fiction”; French President Emmanuel Macron described “a world without rules where international law is trampled underfoot”; even Chinese Vice-Premier He Lifeng warned against returning to “the law of the jungle where the strong prey on the weak.”²³⁴⁵

US President Donald Trump’s address – which took 104 minutes rather than the scheduled 45 – provided the clearest articulation of great power unilateralism, demanding “immediate negotiations” for Greenland whilst asserting that without American intervention in World War II, European leaders “would all be speaking German and a little Japanese perhaps.”⁶ Notably, both Denmark and Greenland – the directly affected parties – chose not to attend Davos, instead addressing their respective parliaments and issuing statements from their capitals emphasising territorial integrity and international law.⁷

Hours after these addresses, the pattern they described was validated in real-time: Trump announced following his meeting with NATO Secretary General Mark Rutte that they had “formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region” – a framework negotiated without Denmark or Greenland present.⁸ This mirrors precisely the historical pattern of great powers (US and Russia) negotiating frameworks about Ukraine’s territorial integrity without Ukraine at the table. When territorial sovereignty is directly threatened, the affected parties’ choice to address their own parliaments rather than attend Davos reflects strategic refusal to legitimise forums where their interests are negotiated without their participation.

ISAR Global Strategic Positioning: This moment validates our core thesis that governance coordination mechanisms fail when rhetoric diverges from geopolitical reality. The Davos addresses demonstrate that when great powers openly acknowledge pursuing national interests through economic coercion, the fiction of harmonised international frameworks collapses. For AI governance specifically, this means:

1. The harmonisation fantasy ends – Variable geometry coalitions, not universal frameworks, will define coordination
2. Infrastructure sovereignty becomes operational – Middle powers must build defensive capabilities rather than rely on multilateral protection
3. Enforcement reality diverges – Great powers will exempt themselves whilst demanding compliance from others
4. Process intelligence becomes essential – Tracking what governance mechanisms actually deliver (versus what they promise) provides competitive strategic advantage

Organizations navigating multi-jurisdictional AI governance now face a fundamentally different landscape than the one described in most international coordination frameworks. ISAR Global’s systematic tracking of governance reality versus rhetoric positions us as the definitive intelligence source for this new era.

Part One: The Shared Diagnosis – Permanent Systemic Change

All six Davos addresses acknowledged the same fundamental reality: the international order that shaped the post-Cold War era has ended, and this change is permanent rather than temporary disruption.

1.1 Historical Parallel: The Bretton Woods Moment

European Commission President Ursula von der Leyen explicitly framed the current moment through historical comparison to previous systemic collapse:

“1971 was the year of the so-called Nixon shock and the decision to delink the US dollar. In an instant, the foundations of the Bretton Woods system and the entire global economic order set up after the war effectively collapsed. But it also had two major effects. It inadvertently created the conditions for what would become a truly global outlook and it provided a sharp lesson for Europe to strengthen its economic and political power. It was a warning to reduce our dependencies, in this case on a foreign currency.”²

Von der Leyen continued: “The world may be very different today, without any question, but I believe the lesson is very much the same. That geopolitical shocks can and must serve as an opportunity for Europe… the seismic change we are going through today is an opportunity, in fact, a necessity, to build a new form of European independence.“²

The invocation of 1971 carries specific analytical weight. The Nixon shock represented unilateral great power action (US suspension of dollar-gold convertibility) that destroyed established multilateral architecture (Bretton Woods) whilst creating new geopolitical realities that forced adaptation. Von der Leyen’s parallel suggests Europe recognises this moment carries similar transformative significance.

1.2 Carney’s “Rupture Not Transition”

Canadian Prime Minister Mark Carney provided the most explicit articulation of systemic collapse, framing it through Václav Havel’s concept of “living within a lie”:

“For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection. We knew the story of the international rules-based order was partially false that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically. And we knew that international law applied with varying rigour depending on the identity of the accused or the victim.”³

Carney continued: “This fiction was useful, and American hegemony, in particular, helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes. So, we placed the sign in the window. We participated in the rituals, and we largely avoided calling out the gaps between rhetoric and reality. This bargain no longer works. Let me be direct. We are in the midst of a rupture, not a transition.“³

The “rupture not transition” framing carries significant analytical implications. A transition implies temporary disruption followed by return to stability; a rupture implies permanent structural break requiring fundamental strategic recalibration.

1.3 Macron’s “World Without Rules”

French President Emmanuel Macron characterised the current moment through multiple systemic failures:

“Look at the situation where we are. I mean, a shift towards autocracy, against democracy. More violence, more than 60 wars in 2024 – an absolute record, even if I understood a few of them were fixed. And conflict has become normalized, hybrid, expanding into new demands, space, digital information, cyber, trade and so on. It’s as well a shift towards a world without rules. Where international law is trampled underfoot and where the only laws it seems to matter is that of the strongest. And imperial ambitions are resurfacing.”⁴

Macron continued: “This is as well as shift towards a world without effective collective governance and where multilateralism is weakened by powers that obstruct it or turn away from it, and rules are undermined.”⁴

1.4 He Lifeng’s “Law of the Jungle” Warning

Even Chinese Vice-Premier He Lifeng – representing a great power often accused of strategic competition rather than rules-based cooperation – warned against abandoning international frameworks:

“As President Xi Jinping noted, at difficult times, we must uphold our original commitment to peaceful co-existence and strengthen our confidence in win-win cooperation. Multilateralism is the right way to keep the international order stable and promote humanity’s development and progress. The rules must apply equally to everyone. A handful of countries should not enjoy privileges based on their strength, and the world must not return to the law of the jungle, where the strong will eat the weak. Every country is entitled to defend its legitimate rights and interests.”⁵

1.5 Trump’s Unvarnished Great Power Logic

US President Donald Trump’s 104-minute address (scheduled for 45 minutes) provided the clearest articulation of why other leaders believe the system has collapsed. On Greenland, Trump asserted:

“We literally set up bases on Greenland for Denmark. We fought for Denmark. We weren’t fighting for anyone else. We were fighting to save it for Denmark… And then after the war which we won – we won it big – without us right now you’d all be speaking German and a little Japanese perhaps. After the war we gave Greenland back to Denmark. How stupid were we to do that? But we did it. But we gave it back. But how ungrateful are they now…“⁶

Trump continued: “We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won’t do that… Now everyone’s saying, ‘Oh, good.’ People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force.”⁶

Later in his address, Trump characterised Europe more broadly: “Certain places in Europe are not recognizable anymore. They’re not recognizable… Friends come back from different places – I don’t want to insult anybody – and say, I don’t recognize it. And that’s not in a positive way, that’s in a very negative way.”⁹

1.6 Parmelin’s Neutral Acknowledgment

Swiss Federal President Guy Parmelin, as host nation leader, provided diplomatic acknowledgment of transformation without taking partisan positions:

“2026 has barely started, yet there are indications of upheavals to come, and potential flashpoints: Ukraine, Gaza, Sudan, and now Venezuela and Iran, to name but a few. In terms of economic policy, protectionism is on the rise all over the world… This should come as no surprise. For humans, standing still is not an option. Or to quote philosopher Henri Bergson: ‘to exist is to change.’”¹⁰

Governance Intelligence: The convergence on diagnosis across six major addresses – from EU, Canada, France, China, USA, and Switzerland – demonstrates that leaders no longer find it politically viable to maintain the fiction of functioning multilateral order. This represents fundamental shift from previous WEF gatherings where leaders affirmed commitment to international cooperation whilst pursuing contradictory national strategies. The shared acknowledgment of systemic rupture validates ISAR Global’s “governance reality versus rhetoric” methodology: when rhetoric aligns with reality, it signals that pretending otherwise has become more costly than acknowledging breakdown.

Part Two: Divergent Strategic Responses by Power Position

Whilst diagnosis converged remarkably, strategic responses diverged sharply based purely on power position and geopolitical interests.

2.1 Great Power Unilateralism: United States (Trump)

Strategic Approach: Explicit pursuit of national interests through economic coercion, territorial demands, and unilateral action without multilateral constraint.

Core Elements:

On Greenland: Trump called for “immediate negotiations” for US acquisition whilst threatening tariffs against eight NATO allies (Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, United Kingdom) who opposed the demand. He framed Greenland as essential for “the Golden Dome” missile defence system and repeatedly referred to the territory as “a big beautiful piece of ice” that Denmark should relinquish.⁶⁹

On European Allies: Trump explicitly weaponised historical obligations: “Without us you’d all be speaking German and a little Japanese perhaps” whilst characterising Denmark as “ungrateful” for not acquiescing to territorial demands.⁶

On NATO: Trump criticised the alliance by saying “(the US) give so much and we get so little in return. What we got out of NATO is – nothing” after funding “100% of it.”⁹

Governance Intelligence: Trump’s address represents explicit abandonment of even rhetorical commitment to rules-based order. Previous US administrations pursued national interests whilst maintaining multilateral rhetoric; Trump eliminates the rhetorical gap entirely. This forces allied nations to respond to stated rather than implied great power logic, removing diplomatic ambiguity that previously enabled compromise. For AI governance, this suggests US will demand regulatory deference whilst maintaining unilateral capacity for standard-setting through market dominance.

2.2 Great Power “Multilateralism”: China (He Lifeng)

Strategic Approach: Position China as defender of rules-based order and multilateralism whilst maintaining strategic flexibility.

Core Elements:

On Multilateralism: He Lifeng positioned China as champion of international frameworks: “China advocates a universally beneficial and inclusive economic globalization. We are committed to building bridges, not walls. We will firmly support trade and investment, liberalization and facilitation, and continue to share development opportunities with the world.”⁵

On Trade: He stated “We never seek trade surplus; on top of being the world’s factory, we hope to be the world’s market too. However, in many cases, when China wants to buy, others don’t want to sell. Trade issues often become security hurdles.”⁵

On WTO Compliance: He emphasised: “Since joining the WTO, China has strictly followed the organization’s rules, earnestly fulfilled its commitments and taken voluntary steps to contribute more. Last year, it solemnly announced that it will not seek new, special and differential treatment in current and future negotiations at the WTO.”⁵

Governance Intelligence: China’s positioning as multilateral champion occurred at precisely the moment when Western leaders acknowledged multilateral order collapse. This represents strategic opportunity – claiming moral high ground on rules-based cooperation whilst Western allies openly question system viability. However, Macron’s simultaneous criticism of “Chinese underconsumption and overinvestment” and demands for “massive excess capacities” to be addressed reveals that European powers view Chinese “multilateralism” as strategic positioning rather than genuine commitment.⁴ For AI governance, this suggests China will defend international frameworks that constrain Western regulatory extraterritoriality whilst maintaining domestic autonomy.

2.3 EU Trade Bloc Response: European Commission (von der Leyen)

Strategic Approach: Build resilience through massive trade diversification, strategic autonomy, and economic scale whilst maintaining selective multilateral engagement.

Core Elements:

Trade Diversification: Von der Leyen announced: “On Saturday, I was in Asunción in Paraguay to sign the EU-Americas trade agreement. It was a breakthrough after 25 years of negotiations. With it, the European Union and Latin America have created the largest free trade zone in the world, a market worth over 20% of global GDP; 31 countries, with over 700 million consumers.”²

She continued: “Last year, we reached new agreements with Mexico, Indonesia and Switzerland, our host country. We’re working on a new free trade agreement with Australia. We are also advancing with the Philippines, Thailand, Malaysia, the United Arab Emirates and more. Right after Davos, next weekend, I will travel to India. There’s still work to do, but we are on the cusp of a historic trade agreement. Indeed, some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP.”²

Strategic Autonomy: Von der Leyen explicitly stated: “This agreement sends a powerful message to the world that we are choosing fair trade over tariffs, partnership over isolation, and sustainability over exploitation. And that we are serious about de-risking our economies and diversifying our supply chains.“²

On Greenland: Whilst maintaining solidarity with Denmark, von der Leyen framed response strategically: “The sovereignty and integrity of their territory is non-negotiable… We will work on a massive European investment search in Greenland. We will work with Greenland and Denmark hand-in-hand to see how we can further support the local economy and infrastructure… we will look at how to strengthen our security partnerships with the UK, Canada, Norway, Iceland and others.”²

Governance Intelligence: EU strategy combines defensive and offensive elements. Defensively, “de-risking” and “diversifying supply chains” acknowledge that economic integration creates strategic vulnerabilities when partners weaponise interdependence. Offensively, creating “the largest free trade zone in the world” and potentially adding India’s 1.4 billion people positions EU as alternative pole of economic gravity. This represents governance reality that multilateral protection has failed; resilience requires scale and diversification. For AI governance, EU will likely pursue similar strategy – building regulatory bloc through trade agreements that require adoption of EU standards as market access condition.

2.4 Middle Power Coordination: Canada (Carney)

Strategic Approach: “Variable geometry coalitions” – different groupings for different issues based on shared interests rather than universal multilateral frameworks.

Core Elements:

Core Diagnosis: Carney stated: “Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited. You cannot live within the lie of mutual benefit through integration, when integration becomes the source of your subordination.”³

Variable Geometry: Carney articulated new approach: “To help solve global problems, we’re pursuing variable geometry, in other words, different coalitions for different issues based on common values and interests. So, on Ukraine, we’re a core member of the Coalition of the Willing and one of the largest per capita contributors to its defence and security. On Arctic sovereignty, we stand firmly with Greenland and Denmark… On plurilateral trade, we’re championing efforts to build a bridge between the Trans Pacific Partnership and the European Union, which would create a new trading bloc of 1.5 billion people.”³

Middle Power Strategy: Carney warned: “Argue, the middle powers must act together, because if we’re not at the table, we’re on the menu. But I’d also say that great powers, great powers can afford for now to go it alone. They have the market size, the military capacity and the leverage to dictate terms. Middle powers do not. But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what’s offered. We compete with each other to be the most accommodating. This is not sovereignty. It’s the performance of sovereignty while accepting subordination.“³

Direct Response to Trump: On Greenland specifically, Carney stated: “We stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland’s future. Our commitment to NATO’s Article 5 is unwavering… Canada strongly opposes tariffs over Greenland.“³

Governance Intelligence: Carney’s “variable geometry” represents explicit abandonment of universal multilateral frameworks in favour of issue-specific coalitions. This acknowledges that middle powers lack capacity for bilateral negotiation with great powers (“if we’re not at the table, we’re on the menu”) but also cannot rely on multilateral institutions that great powers now openly disregard. The framework carries significant implications for AI governance: rather than expecting universal coordination through UN or OECD mechanisms, middle powers will form defensive coalitions on specific issues (data sovereignty, infrastructure independence, enforcement coordination). ISAR Global’s tracking of which coalitions form around which issues provides strategic intelligence for navigating this fragmented landscape.

2.5 European Sovereignty with Selective Multilateralism: France (Macron)

Strategic Approach: Build European autonomy through protection and industrial policy whilst attempting to maintain reformed multilateral frameworks where strategically beneficial.

Core Elements:

Three-Pillar Strategy: Macron outlined: “The three pillars of our strategy to deliver more sovereignty, more efficiency and more growth should be based on protection, simplification and investment.“⁴

On Protection: “Protection doesn’t mean protectionism. Today’s Europeans are too naive. This is a unique market, open to everybody without checking level playing field… The Europeans are the only one not to protect their own companies and their own markets, when the other countries don’t respect the level playing field. This is why we have to be much more realistic.”⁴

European Preference: Macron stated: “We must also advance the principle of European preference. There is a North American preference in your market. There is no European preference today. We are progressively creating it… this is a decisive project and I count on the European Commission to present the proposal this way by early 2026, with the highest possible level of ambition.”⁴

G7 as Cooperation Vehicle: Despite acknowledging system breakdown, Macron positioned France’s G7 presidency as cooperation mechanism: “This year, France holds the G7 presidency with a clear ambition – to restore the G7 as a forum for frank dialogue among major economies, and for collective and cooperative solutions. Trade wars, protectionist escalation, races towards overproduction will only produce losers.”⁴

On China: Macron specifically criticised: “Competition from China, where massive excess capacities and distortive practices threaten to overwhelm entire industrial and commercial sectors. Export control has become more dangerous, new tools destabilizing global trade and the international system… China is welcome, but what we need is more Chinese foreign direct investments in Europe, in some key sectors, to contribute to our growth, to transfer some technologies and not just to export towards Europe.”⁴

On Greenland: Macron positioned military exercises as alliance solidarity: “We have decided to join a mutual exercise in Greenland without threatening anyone, but just supporting an ally and another European country, Denmark.”⁴

Governance Intelligence: Macron’s approach combines defensive European sovereignty (preference, protection) with aspirational multilateralism (G7, cooperation). This reflects France’s position as both European power requiring defensive capabilities and permanent UN Security Council member with institutional interest in maintaining multilateral frameworks. The tension between these objectives – building European protections whilst championing cooperation – reveals the challenge facing powers that benefit from international architecture but face great power coercion. For AI governance, France will likely pursue European regulatory harmonisation (protection) whilst advocating for international frameworks where France holds institutional advantage (UN, UNESCO, OECD).

2.6 Neutral Facilitation: Switzerland (Parmelin)

Strategic Approach: Maintain dialogue space and emphasise stability whilst acknowledging transformation.

Core Elements:

On Dialogue: “Society, science, economics and politics must work together hand in hand, in a spirit of partnership. Otherwise problems can only be addressed in a partial and imperfect manner.”¹⁰

On Change: “This should come as no surprise. For humans, standing still is not an option. Or to quote philosopher Henri Bergson: ‘to exist is to change.’ It takes courage to innovate, to remain true to one’s values, to ask for assistance or advice when necessary. The courage to make a long-term commitment.”¹⁰

On Free Trade: “Even in the current climate, which is prone to protectionism, we believe in the success of free trade and wish to continue expanding our networks of agreement. To achieve this, we must be able to conduct negotiations on an equal footing, yielding good results for the benefit of all parties.”¹⁰

Governance Intelligence: Switzerland’s position as host nation and permanent neutral requires diplomatic language that acknowledges transformation without endorsing any particular strategic response. Parmelin’s emphasis on “equal footing” negotiations and “benefit of all parties” represents aspiration rather than current reality – Trump’s Greenland demands and tariff threats explicitly reject equal negotiations. Swiss neutrality provides forum for dialogue but cannot compel compliance with multilateral norms when great powers choose unilateral action.

Part Three: The Significance of Absence – Denmark and Greenland

Denmark and Greenland – despite being the primary subjects of Trump’s demands – chose not to participate in Davos 2026. This absence carries significant analytical weight for understanding how sovereignty crises override normal diplomatic channels.

3.1 Confirmed Non-Attendance

Multiple sources confirmed deliberate non-attendance: “The Danish government was invited to Davos, but a forum spokesperson said Monday no representatives planned to attend.”⁷ Similarly, “Greenland’s Prime Minister Jens-Frederik Nielsen, who is not attending the Davos conference” remained in Nuuk.⁷

This was not scheduling coincidence. Denmark’s absence was “widely regarded as a snub to the US president,”¹¹ representing deliberate strategic choice to refuse participation in forum where territorial sovereignty would be subject to international pressure.

3.2 What Denmark and Greenland Did Instead

Rather than attending Davos, both governments addressed their own democratic institutions and conducted bilateral coordination:

Danish Parliament Address (20 January): Prime Minister Mette Frederiksen told Danish lawmakers: “We are now being threatened by our closest ally… the worst may still be ahead of us. We have never sought conflict. We have consistently sought cooperation.”⁷

Joint Press Conference Copenhagen (13 January): Nielsen and Frederiksen presented united front, with Nielsen stating: “If the self-governing Danish territory must choose between the U.S. and Denmark, we choose Denmark.”¹²

Nuuk Press Conference (21 January): Nielsen stated his government had “met with NATO members and other allies, and that Western countries should be united by respect for national, territorial integrity (and) respect for international law.”⁷

Bilateral Meetings: Frederiksen scheduled meeting with UK Prime Minister Keir Starmer in London (22 January) for direct coordination rather than Davos multilateral engagement.¹³

3.3 How Others Addressed the Absent Parties

Von der Leyen: Pledged European solidarity: “Full solidarity with Greenland and the kingdom of Denmark. The sovereignty and integrity of the territory is non-negotiable.”²

Carney: Declared: “We stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland’s future.”³

Macron: Announced military participation: “We have decided to join a mutual exercise in Greenland without threatening anyone, but just supporting an ally and another European country, Denmark.”⁴

Trump: Called for “immediate negotiations” with parties who were not present, stating: “They have a choice. You can say yes and we will be very appreciative, or you can say no and we will remember.”⁶

Governance Intelligence: The coordinated absence of both Denmark and Greenland whilst being the primary subject of multiple addresses demonstrates limits of multilateral dialogue forums when core sovereignty is at stake. Denmark chose democratic accountability (Parliament) and bilateral coordination (UK, Nordic allies) over elite forum participation. This pattern suggests that when territorial integrity faces direct challenge, affected states prioritise national institutions over international persuasion.

For AI governance coordination, this implies that when regulatory frameworks threaten core sovereignty (e.g., extraterritorial enforcement, mandatory data sharing, infrastructure access requirements), affected states will exit multilateral negotiation in favour of bilateral defensive coordination. ISAR Global’s tracking of which states attend which forums under what conditions provides early warning of coordination breakdown.

Part Four: Implications for International AI Governance Coordination

The Davos 2026 addresses reveal fundamental shifts in international coordination that directly undermine assumptions embedded in most AI governance frameworks.

4.1 The Harmonisation Fantasy Collapses

Current AI Governance Rhetoric: Most international AI governance frameworks assume that states will converge toward harmonised standards through multilateral dialogue, voluntary compliance with principles-based frameworks, and shared recognition of global challenges requiring cooperative solutions.

Davos Governance Reality: When great powers openly acknowledge pursuing national interests through economic coercion (Trump: “We probably won’t get anything unless I decide to use excessive strength and force”), when middle powers state “if we’re not at the table, we’re on the menu” (Carney), and when economic blocs prioritise “de-risking our economies and diversifying our supply chains” (von der Leyen), the prospect of voluntary harmonisation becomes implausible.

Governance Intelligence for AI Coordination:

1. Universal frameworks will fragment into variable geometry coalitions: Following Carney’s model, AI governance will splinter into issue-specific groupings – data sovereignty coalitions separate from model safety alliances separate from infrastructure access agreements. States will participate selectively based on specific interests rather than committing to comprehensive frameworks.
2. Great power exemptions will be explicit rather than implicit: Trump’s demand for Greenland whilst threatening NATO allies demonstrates that major powers will not subordinate strategic interests to multilateral norms. For AI, this means US and China will maintain unilateral capacity for AI development, deployment, and standard-setting regardless of international agreements they nominally endorse.
3. Regulatory arbitrage becomes strategic competition: When Macron demands “European preference” and criticises Chinese “overcapacity,” he acknowledges that regulatory environments are competitive advantages. AI governance will become tool for protecting domestic industries rather than mechanism for global coordination.

4.2 Infrastructure Sovereignty Becomes Operational Necessity

Current AI Governance Rhetoric: Most frameworks assume AI infrastructure (compute, data centres, cloud services, model hosting) can remain globally distributed because economic efficiency benefits all parties.

Davos Governance Reality: When von der Leyen explicitly emphasises “de-risking economies and diversifying supply chains” after acknowledging permanent systemic change, she signals that economic integration creates strategic vulnerabilities when partners weaponise interdependence.

Governance Intelligence for AI Infrastructure:

1. Cloud dependency equals strategic subordination: Carney’s warning that “bilateral negotiation with hegemon equals subordination” applies directly to AI infrastructure. States hosting critical AI systems on US-controlled cloud infrastructure face structural vulnerability to unilateral American action – not hypothetical threat but acknowledged governance reality.
2. Infrastructure diversification becomes defensive requirement: Just as EU pursues trade diversification to reduce dependency, states will require AI infrastructure redundancy. This means regional data centres, sovereign compute capacity, and regulatory requirements for infrastructure location transparency become operational necessities rather than nationalist preferences.
3. Framework proliferation reflects infrastructure fragmentation: The proliferation of AI governance frameworks (EU AI Act, UK approach, Singapore model, various bilateral agreements) reflects not coordination failure but strategic competition for infrastructure control. Different regulatory regimes serve as protection mechanisms for domestic AI capabilities.

4.3 Enforcement Reality Diverges from Framework Rhetoric

Current AI Governance Rhetoric: International AI frameworks assume that enforcement mechanisms will apply consistently across jurisdictions, that treaty obligations will constrain state behaviour, and that reputation costs will incentivise compliance.

Davos Governance Reality: When He Lifeng states “The rules must apply equally to everyone” whilst Macron criticises China’s “massive excess capacities,” both acknowledge that rules apply asymmetrically based on power rather than universal principle. Trump’s threat of tariffs against allies who oppose territorial demands demonstrates that enforcement operates through economic coercion rather than multilateral mechanisms.

Governance Intelligence for AI Enforcement:

1. Great powers will demand compliance whilst maintaining exemptions: Expect US and China to advocate for international AI safety standards, algorithmic accountability, and transparency requirements that constrain competitors whilst maintaining national security exceptions broad enough to exempt their own strategic capabilities.
2. Middle powers face enforcement without protection: Carney’s acknowledgment that middle powers “negotiate from weakness” in bilateral context applies to AI enforcement. States lacking scale or strategic leverage will face enforcement of international standards without reciprocal capacity to compel great power compliance.
3. Enforcement tracking becomes competitive advantage: Organizations that systematically track which AI governance requirements are actually enforced versus which remain rhetorical – ISAR Global’s core methodology – gain strategic intelligence about which obligations genuinely constrain versus which provide compliance theatre.

4.4 Process Intelligence Becomes Strategic Differentiator

Current AI Governance Rhetoric: Most governance analysis focuses on policy design – what frameworks promise to deliver, how regulations structure obligations, what coordination mechanisms exist on paper.

Davos Governance Reality: When Carney declares the rules-based order was always “partially false” but that “we participated in the rituals,” he acknowledges that understanding gap between governance rhetoric and governance reality provides strategic advantage. Leaders who recognised system fiction earlier could position for rupture; those who believed rhetoric faced strategic surprise.

Governance Intelligence for AI Coordination:

1. Track implementation not announcements: ISAR Global’s methodology – systematically tracking what governance mechanisms actually deliver versus what they promise – becomes essential for navigating fragmented landscape. When frameworks proliferate and great powers pursue contradictory strategies, understanding which coordination mechanisms function versus which provide legitimation theatre creates competitive advantage.
2. Monitor coalition formation patterns: As “variable geometry” becomes operational reality, tracking which states coordinate on which AI issues (safety testing, infrastructure access, enforcement cooperation, standard-setting) reveals actual alignment versus rhetorical commitments. Early identification of emerging coalitions enables strategic positioning.
3. Identify structural contradiction indicators: When governance rhetoric diverges significantly from geopolitical action (e.g., announcing AI cooperation framework whilst implementing infrastructure exclusion policies), contradiction signals likely framework failure. ISAR Global’s systematic tracking of these patterns provides early warning for coordination breakdown.

4.5 Real-Time Pattern Validation: Three Cases of Power-Based Coordination

Current AI Governance Rhetoric: International frameworks assume that directly affected parties will participate in negotiations concerning their interests, that territorial sovereignty provides veto authority over external arrangements, and that multilateral institutions constrain rather than enable great power unilateralism.

Davos Governance Reality Validated Across Three Cases: Between 21-22 January 2026, the pattern described in the addresses was validated through three distinct cases demonstrating how power-based coordination functions when international law no longer constrains great power action. Each case reveals different tactical responses to identical structural reality.

4.5.1 Great Power Framework Without Affected Parties (Trump-Rutte)

Hours after the addresses analysed above, President Trump announced via Truth Social that following his meeting with NATO Secretary General Mark Rutte at Davos, they had “formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region.” Trump stated this “framework” meant he would not impose the threatened tariffs on eight European nations scheduled to begin 1 February 2026.⁸

The Structural Pattern: This announcement demonstrates the exact governance pattern that Carney, von der Leyen, and Macron warned about:

1. Negotiating parties: United States (Trump) + NATO (Rutte)
2. Subject of negotiation: Greenland/Arctic sovereignty and security architecture
3. Absent from negotiation: Denmark (sovereign authority) and Greenland (self-governing territory with independence referendum rights)
4. Presented outcome: “Framework” announced as if sovereign consent is procedural detail

This replicates precisely the pattern from Ukraine: great powers (US and Russia) negotiating frameworks concerning territorial integrity and security arrangements of directly affected state (Ukraine) without that state’s participation at the negotiating table. In both cases, great powers position themselves as negotiating “security architecture” whilst directly affected territories become objects of negotiation rather than subjects with agency.

Denmark and Greenland’s Strategic Response: Denmark’s government chose not to attend Davos, with Danish Prime Minister Mette Frederiksen instead addressing the Danish Parliament, stating “We are now being threatened by our closest ally,” whilst Greenland’s premier held a press conference in Nuuk emphasising “respect for territorial integrity and international law.”⁷¹³ This absence was not diplomatic oversight but strategic choice: refusing to legitimise a forum where their sovereignty would be negotiated without them at the table.

4.5.2 European Accommodation Despite Rhetoric (Merz)

German Chancellor Friedrich Merz, speaking 22 January, acknowledged “great power rivalry” as the new reality whilst demonstrating the impossible position facing European powers directly threatened by the Trump-Rutte framework. Germany was amongst the eight nations threatened with tariffs, now suspended based on a framework negotiated without German participation.¹⁴

Merz’s address revealed the tension between rhetorical principle and operational accommodation:

“I welcome President Trump’s remarks from last night… [but] any threat to acquire European territory by force would be unacceptable… We will uphold the principles… namely sovereignty and territorial integrity… [Denmark and Greenland] can count on our solidarity.”¹⁴

Yet having drawn these rhetorical red lines, Merz immediately signalled accommodation: “We support talks between Denmark, Greenland, the United States on the basis of these principles.”¹⁴ He welcomed the framework whilst maintaining principled rhetoric – classic accommodation from subordinate position. His declaration that “democracies do not have subordinates” occurred within an address demonstrating precisely such subordination: European power welcoming great power framework whilst unable to influence its terms.

Merz’s substantive response centred on defensive capability building: announcing 5 per cent GDP defence spending (up from 2 per cent), trade diversification beyond US markets, and acknowledgement that Europe “must become capable of defending ourselves on our own.”¹⁴ When you cannot shape frameworks, you build defensive capabilities against their consequences.

4.5.3 Affected Party Forced Accommodation (Zelenskyy)

Ukrainian President Volodymyr Zelenskyy’s sudden appearance at Davos on 22 January provided the most revealing validation of subordination dynamics. Earlier reporting indicated Zelenskyy would only attend “if documents on security guarantees with the US and a ‘prosperity plan’ were ready to be signed.”¹⁵ Those documents were not ready – the $800 billion prosperity plan signing was postponed due to Greenland tensions. Yet Zelenskyy appeared regardless.

The timing is instructive: immediately following US-Russia envoy meetings in Davos where Trump envoy Steve Witkoff announced a Putin meeting and stated “land deals” were the last obstacle, Zelenskyy reversed his position and attended. His address opened with systematic dismantling of European response:¹⁶

“Everyone remembers the great American film ‘Groundhog Day’… that’s exactly how we live now… Just last year, here in Davos, I ended my speech with the words: ‘Europe needs to know how to defend itself.’ A year has passed – and nothing has changed.”

Zelenskyy then validated Trump’s approach whilst savaging European inaction:

“President Trump led an operation in Venezuela. And Maduro was arrested… Sorry, but Putin is not on trial. And this is the fourth year of the biggest war in Europe since World War II… Why can President Trump stop tankers from the Shadow Fleet and seize oil – but Europe doesn’t?”

The most devastating assessment:

“He will not change. President Trump loves who he is. And he says he loves Europe. But he will not listen to this kind of Europe… Instead of becoming a truly global power, Europe remains a beautiful but fragmented kaleidoscope of small and middle powers.”¹⁶

Having systematically validated Trump’s actions against European inaction, Zelenskyy concluded by signalling accommodation to the framework being shaped: “Today we met with President Trump – and our teams are working almost every day… The documents – aimed at ending this war – are nearly, nearly ready.”¹⁶

The Pattern Across Three Cases: Denmark refuses to attend and maintains principled resistance from exclusion. Germany attends, maintains rhetorical principles whilst signalling accommodation, and focuses on defensive capability building. Ukraine initially refuses, then forced to attend when frameworks negotiated without participation, opens by backing Trump against Europe, signals accommodation to emerging terms. Three different tactical responses to identical structural constraint: when great powers negotiate frameworks about your interests, you cannot shape the terms, only manage your response to predetermined outcomes.

4.5.4 Strategic Disengagement as Alternative Response (Prabowo)

Indonesian President Prabowo Subianto’s address on 22 January provided instructive counterpoint. Indonesia – G20 member, ASEAN’s largest economy, 280 million people – completely avoided international coordination topics, instead focusing exclusively on domestic achievements, economic stability, and investment opportunities.¹⁷ Where Carney actively diagnosed coordination breakdown, Prabowo demonstrated strategic disengagement: when great powers negotiate frameworks you cannot influence, focus on domestic resilience and maintain maximum strategic flexibility through studied neutrality.

Governance Intelligence for AI Coordination: These real-time validations demonstrate why process intelligence matters:

1. The pattern is consistent across domains: What happens with territorial sovereignty (Greenland, Ukraine) mirrors what will happen with AI governance – great powers will negotiate frameworks affecting smaller states without their participation, then present outcomes requiring procedural ratification.
2. Multilateral institutions enable rather than constrain: NATO’s Secretary General negotiating “frameworks” for territorial arrangements demonstrates that international institutions increasingly serve as facilitators for great power coordination rather than constraints on unilateral action.
3. Tactical responses vary but structural constraint is identical: Whether Denmark’s principled refusal, Germany’s accommodation through rhetoric, Ukraine’s forced alignment, or Indonesia’s strategic disengagement – all acknowledge inability to shape great power frameworks. The difference is tactical approach to managing subordinate positioning, not genuine agency to determine coordination outcomes.
4. Market reaction validates power dynamics: Stock markets surged immediately after Trump’s “framework” announcement, demonstrating that financial markets reward great power coordination even when it contradicts formal sovereignty principles. This market validation reinforces incentives for great power deal-making over multilateral process respect.

Variable Geometry as Implemented Reality: The pattern across these three cases – occurring just hours after leaders described the collapse of rules-based order – demonstrates that “variable geometry” is not future prediction but current operational pattern. Different configurations of actors negotiate different issues, with participation determined by power position rather than affected interest. When Carney warned that “bilateral negotiation with hegemon equals subordination,” these cases demonstrate precisely this mechanism in operation.

For AI governance, this means tracking who negotiates with whom about what aspects of AI coordination becomes essential intelligence. Framework announcements reveal little; the negotiating structure reveals everything about which interests will prevail.

Conclusion: Variable Geometry as Operational Reality

The World Economic Forum Annual Meeting 2026 in Davos marked a fundamental shift in international governance discourse: leaders stopped pretending the rules-based order functions and explicitly acknowledged pursuing national interests through economic coercion, strategic autonomy, and defensive coordination. This validates ISAR Global’s core thesis that systematic tracking of governance reality versus rhetoric provides strategic intelligence advantage.

For AI governance specifically, this means:

• Harmonisation ends: Variable geometry coalitions, not universal frameworks, will define coordination
• Infrastructure matters: Strategic autonomy requires sovereign capabilities and dependency diversification
• Enforcement diverges: Great powers exempt themselves whilst demanding compliance from others
• Process intelligence wins: Understanding what mechanisms actually deliver versus what they promise creates competitive advantage

When world leaders publicly acknowledge governance reality rather than maintaining multilateral fiction, the analytical frameworks that track implementation reality versus coordination rhetoric become essential for strategic navigation. Davos 2026 demonstrated that understanding what governance mechanisms actually deliver – rather than what they promise – provides the intelligence foundation for navigating the fractured coordination landscape ahead.

END ANALYSIS

Document Classification: Strategic Intelligence Brief
Distribution: External Publication
Next Review: Following UN AI Scientific Panel launch (anticipated Q1 2026)

References and Citations

ISAR Global – Institute for Strategic AI Research Global
Understanding governance reality, not governance rhetoric
www.isar-global.org | directorate@isar-global.org