Geopolitical Risk Meets AI: How Business Leaders Can Stay Ahead

By: Alex de Castro (B’25), Research Assistant at the Baratta Center for Global Business

In today’s unpredictable world, global risks are no longer background noise — they are central to every business strategy. Once the domain of policymakers and academics, geopolitics now shapes corporate decision-making. From supply chain disruptions and regulatory shifts to resource shortages and rising insurance costs in climate-vulnerable regions, businesses must approach global risks with the same rigor as financial forecasting. Conversely, geopolitical analysts must also spend time looking for opportunities — geopolitical developments that can lead to transactions accretive in nature.

Figure 1: Geopolitical Risk Index by Share of News Articles (1945-2025)

The Baratta Center invited Michael Armao, CEO of Verstand AI to pilot the skills workshop series, in one of Professor Ricardo Ernst’s classes, focusing on the role of geopolitical analysis to help corporate decision-making. Workshopping with Georgetown McDonough’s Global Business Fellows, Armao showcased how his team at Verstand AI leverages cutting-edge AI models to help businesses assess and preemptively plan responses to global risks and opportunities.

“Geopolitics has been around for a long time, but 10 years ago it was an afterthought. Today, it’s a key concern in every boardroom,” Armao noted. This resonated deeply with the senior undergraduates as they prepared to present consulting solutions to Airbus Helicopters in Spain as part of the Global Business Experience program. Armao’s session explored how AI is reshaping decision-making in complex geopolitical issues, providing valuable insights into the intersection of AI and human judgment in corporate strategy.

The Power and Peril of AI Tools

Artificial Intelligence (AI) has become an indispensable tool for assessing global risks, but its effectiveness depends on how well businesses interpret and apply its insights. The challenge is not just collecting data — it is overcoming cognitive biases, avoiding false precision, and integrating AI’s probabilistic models into strategic decision-making.

Cognitive Barriers to AI-Driven Strategy

One of the biggest hurdles in geopolitical analysis is not technological but rather psychological. Human biases shape decision-making at every level, from analysts to executives, often skewing how data is collected, interpreted, and applied. Acknowledging and addressing these biases in AI forecasting models is crucial for ensuring objective, actionable insights. Cognitive biases, such as availability heuristic, confirmation bias, and anchoring effect, can distort decision-making, impact the quality of forecasts, and lead to the misallocation of resources.

To maximize AI’s potential, leaders must recognize these biases and adjust their decision-making processes accordingly. Overcoming these challenges requires a shift in mindset – one that resists oversimplification and embraces a more nuanced approach to opportunity and risk assessment. It is easier said than done, yet it is precisely this challenge that keeps boardrooms engaged.

As executives seek to balance technological insights with strategic judgment, the ability to interpret AI-driven analysis without falling into common cognitive traps will be critical.

The Art of Communicating AI Outputs

Even with AI-driven insights, one major challenge remains: how do you effectively convey forecasts to business leaders?

AI models do not predict the future with certainty; instead, they offer a probabilistic approach to decision-making, providing multiple scenarios with assigned probabilities. However, many executives resist this approach. Armao coined a term for this dilemma: the Conveyance Paradox – business leaders demand absolute answers, yet the best AI models can only provide probabilities within a forward-looking geopolitical model.

This tension is exacerbated by those that employ ex-post and ex-ante analysis in geopolitical forecasting. Explaining past events is easy — news pundits do it daily, often leveraging hindsight to bolster their credibility for future predictions. Forecasting geopolitical shifts, however, is far more uncertain, and articulate analysts can make uncertain predictions sound convincing.

The challenge for corporate leaders is to resist overconfidence and instead adopt a mindset that values adaptability and scenario planning over false precision. In an unpredictable world, the best strategy is not seeking certainty – it is preparing for multiple outcomes and shifting priorities and resources as more data presents itself.

Integrating the Human and the Artificial

During the workshop, students gained a greater glimpse into the latest AI trends and how AI is shaping the future of work and how it will directly impact future roles.

Adelle Barkhuizen (B’25), a current Global Business Fellow and incoming investment banking analyst at BNP Paribas, reflected on her summer analyst experience at the same firm she will join full-time after graduation. She noted, “AI isn’t just a buzzword anymore, it’s becoming a real tool in day-to-day work as an analyst. Tasks like financial modeling, building slide decks, and even taking minutes can be streamlined by AI, leaving more time to focus on analysis and decision-making that really drives value.”

While AI offers unparalleled capabilities in processing large datasets and identifying trends, it is human judgment that remains indispensable. AI can process mountains of data quickly, but it is the human element that provides depth, context, strategic insight, and frames the questions that guide AI’s analysis.

This collaboration between AI and human expertise is vital to ensure that AI-generated insights are developed and applied effectively. Human decision makers can interpret findings, add contextual understanding, and adjust strategies based on nuanced factors that AI models may not fully capture. In this way, AI serves as a powerful tool to complement human decision-making, not replace it.

The future of work will be defined by collaboration between humans and AI. Global Business Fellows and current Georgetown students will encounter AI tools in their future careers, making it essential to start understanding AI’s capabilities and their evolution today.

“Working in finance upon graduation, I can already see how AI is driving an industry-wide shift,” said Barkhuizen. “It’s not about crunching numbers faster or identifying more deals and opportunities, but about using AI to spot early patterns and push analysis further at a rapid pace. Collaborating with AI will be just as important as understanding markets.” 

The Airbus Case Study

When theory meets turbulence, strategy gets real. As part of their consulting work for Airbus Helicopters, the Global Business Fellows tackled a case study that put AI-driven geopolitical forecasting to the test.

Students analyzed Airbus’ complex risk landscape and then compared their insights to AI-generated scenarios presented by Armao. 

Figure 2: Verstand AI GEO Use Case

The illustrative simulation that Armao demonstrated during his workshop, as seen in Figure 2, indicated potential risks and opportunities for Airbus from an analytical perspective. Like many global businesses, Airbus faces an increasingly complex global landscape as U.S. protectionism further intensifies competition, particularly in the defense sector, where domestic firms pose a challenge.

At the same time, Airbus benefits from its position within the European Union (EU). With rising EU defense spending and growing momentum for “strategic autonomy,” the company is well-positioned to play a key role in the region’s defense industry.

By leveraging AI-driven scenario planning and analyzing “signal traffic” – from policy shifts to social media trends – Airbus can better anticipate geopolitical risks and capitalize on emerging opportunities.

Shaping a New Boardroom

The modern boardroom is no longer just about balance sheets and quarterly earnings – it also includes an understanding of global risk, leveraging AI, and making strategic decisions in an unpredictable world. AI does not just speed up analysis: it uncovers patterns, detects weak signals, and simulates future scenarios that would be impossible to model manually. Shareholders demand due diligence, and executives must prove they can anticipate geopolitical threats before they become crises.

For the Baratta Global Business Fellows, this shift represents both a challenge and an opportunity. Their studies in global business, policy, and AI-driven strategy are preparing them to lead in this evolving landscape. As they enter the workforce, they won’t just be adapting to the new boardroom – they’ll be shaping it.

The Baratta Center’s skills workshop series is designed to equip these future leaders with the tools to navigate uncertainty, apply AI effectively, and make sound decisions in a rapidly changing world. To stay ahead, today’s students, and tomorrow’s executives, must master the blend of machine insight and human judgment.

Stay tuned for more from the Baratta Center’s skills workshop series, launching in fall 2025. Sign Up for Updates.