The proliferation of Artificial Intelligence (AI) has far-reaching
implications for society, politics, and the economy, necessitating
cooperation and diplomacy for its development and governance1. For
smaller, developing nations like Nepal, balancing AI innovation with
regulation is particularly challenging, requiring collaboration with regional
and global actors. This report examines how AI is reshaping geopolitics,
national security, and foreign policy, and how Nepal can leverage
diplomacy to optimize this technology.