South African SMEs in the Age of AI Geopolitics: Why Sitting on the Sidelines Is No Longer an Option

We are living through a new kind of geopolitics—one that is no longer just about trade routes and natural resources but about chips, code, and who controls the future of artificial intelligence. AI is not just a new wave of tech. It is reshaping what it means to build an economy, run a government, or grow a business. And much like the last industrial revolution, this shift is going to leave many behind if they do not catch on quickly.

What we are seeing now is the construction of entirely new ecosystems—hardware, software, data, regulations, and the power structures that govern them. The US and China are leading this shift in very different ways. The US approach is what some have called “fragmented globalisation,” where access to advanced chips, AI models, and tools is increasingly controlled through alliances and restrictions. China, meanwhile, is building its own vertically integrated ecosystem—what some are calling “isolation management”—focused on reducing reliance on Western tech and developing its AI stack internally. These are not just policy quirks. They are strategic decisions aimed at securing long-term global power.

For South Africa, this is more than a spectator sport. These moves define who gets access to powerful AI tools, who gets priced out, and who gets a say in how the rules are written. Right now, we are on the outer edges of that conversation. We rely on imported tools, imported infrastructure, and imported narratives. But we are also living in one of the most interesting times in modern history, and SMEs here have a front-row seat. The question is whether they will stay observers or get into the arena.

AI is eating the world, and we are still early in this cycle. This means there is still time to shape how it plays out on the continent. But SMEs in South Africa cannot afford to think of AI as something reserved for Silicon Valley. It is not just for coders and global tech giants. It is already showing up in hiring tools, fintech platforms, e-commerce recommendations, and even agritech. The next wave will affect procurement, logistics, legal services, and every other part of the supply chain.

The legal and policy landscape in South Africa, however, is lagging. POPIA covers data privacy, but it does not go nearly far enough in offering direction for SMEs trying to develop or integrate AI responsibly. There is no national AI framework, no central guidance on liability for AI-driven decisions, no clarity on how IP works when AI generates creative outputs. This regulatory vacuum leaves SMEs exposed. It also makes it harder to get funding from investors who are increasingly asking about legal compliance, data governance, and ethical risk.

Speaking of funding, the kind of support SMEs should be targeting is not just local grants or bank loans. That is yesterday’s thinking. There are AI-focused global innovation funds, development finance channels, and public interest technology grants that are actively looking for scalable, ethical, African solutions. Most SMEs are not applying, not because they are not eligible, but because they are not aware these opportunities exist or because they do not have the support to put together strong applications. This is a missed opportunity.

What is needed now is a shift in mindset. The AI era is not about waiting for the government to catch up or for policies to arrive neatly packaged. It is about building in spite of the gaps. But building with intention. With legal awareness. With eyes wide open to the global shifts shaping the future. Because the timeline we are now living through is different. The old rules of the web era do not apply. Power is consolidating in new ways. And the players who get this will not only survive—they will shape the rules for the next chapter.

For SMEs in South Africa, the challenge is clear. Start creating. Start localising AI for African problems. Get clear on your IP. Understand the risks. Learn what global funders are looking for. And do not wait for perfect conditions. This is the era where being early and intentional matters more than being polished. And most importantly, do not fall into the trap of thinking you are too small to play. You are not. But you do need to start playing smarter.

The StartUp Legal offers expert legal services tailored for SMEs, helping you secure a winning edge. For personalized support, book a complimentary consultation: https://calendar.app.google/thxigR9yhDAu4LP86 or email us at hello@thestartuplegal.co.za.