Artificial intelligence, economic inequality, and the financial hurdles to sustainable peace: Navigating the interconnected challenges of the 21st century

Artificial intelligence (AI) is transforming economic and political systems at a pace that outstrips existing governance capacities. While AI offers significant potential for innovation, its rapid and uneven diffusion is amplifying structural inequalities within and between states. This paper develops an integrated conceptual framework to explain how AI-driven technological disruption interacts with political economy dynamics to deepen inequality, erode fiscal capacity, and weaken the foundations of sustainable peace. It argues that AI reshapes labor markets, concentrates wealth and data governance power, and reinforces global asymmetries, producing a systemic pattern of vertical and horizontal inequality. These inequalities narrow domestic tax bases, heighten debt dependency, and redirect scarce fiscal resources away from peacebuilding priorities toward technological adaptation and crisis management. As a result, in fragile contexts, institutions face diminishing ability to provide essential services, address grievances, and maintain legitimacy. By linking AI-induced inequality with fiscal fragility, the paper frames technological transformation as a potential economic, political and security threat. The analysis advances policy pathways for mitigating these risks through inclusive AI governance, equitable global cooperation, progressive fiscal reforms, and investment in local technological capacity. Ensuring that AI becomes a driver of resilience rather than a catalyst for exclusion is essential for building durable and just peace in the digital age.