The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Finley Grimble – founder and CEO of the Knightsbridge Strategic Group, a geopolitical intelligence, scenario planning, artificial intelligence, and wargaming advisory in London – is the 464th in “The Trans-Pacific View Insight Series.”
Explain how multinational companies are responding to geopolitical risks.
There is a popular myth circulating recently suggesting that multinational companies (especially those in finance, energy, technology, and logistics) stopped including geopolitical risk as a key consideration after the Cold War ended. This is not really true, and strategic decision-making functions across multinationals remained alert to these risks. What has changed since the Russian invasion of Ukraine in 2022, and catalyzed by the October 7, 2024 attacks on Israel, is the sophistication with which those geopolitical risks are now being tracked, assessed, wargamed, and mitigated.
Of course, national governments have several decades (and centuries in the U.K.’s case for example) of experience collecting geopolitical intelligence, assessing it, strategizing based on it, and ultimately taking actions to capitalize rather than be negatively impacted by the risk.
Therefore, multinationals are building trusted relationships with strategic intelligence companies like KSG whose intelligence analysts, strategists and wargamers have performed these services with great outcomes for various governments, and in the case of KSG, still provide those services to governmental/intergovernmental clients, as well as private sector clients.
How should companies integrate geopolitical risk management into their strategic decision-making and corporate governance?
Multinational companies need an intimate relationship with a geopolitical risk agency, be it KSG or some of the other exquisite capabilities available. This intimate understanding of the company’s strategy and operations allows us to take the “questions of concern” they have for their operations/assets/plans and use all the intelligence methods at our disposal to gather the necessary insights to answer the questions.
We do not simply read open-source information in government communications or the media but rely on building deep human networks to acquire intelligence to answer those questions that no publicly available information can truly answer. With that intelligence we can produce a “forward look” of where geopolitical risks are heading, and then wargame through how the company should alter its strategy and corporate governance based on the severity and likelihood of the events.
It is essential that geopolitical risk intelligence is fed into strategic processes at all strata of an organization. Another myth is often that this kind of intelligence is just for board-level readers, but this should not be the case.
Why should business strategists analyze China’s response to the recent U.S.-U.K. trade deal and ascertain implications for China-U.K. trade relations?
China’s reaction to evolving Western trade architectures provides strategic signals on the future trajectory of U.K.-China economic relations. Business strategists must go beyond the very immediate tariffs or diplomatic rhetoric and seek to understand the long-term strategy of Beijing and how that will affect them. The rhetoric is a veneer designed to shape people’s beliefs, so this should be analyzed but not relied on. That is where an intelligence company comes in to look beneath the veneer.
A major U.S.-U.K. alignment on critical technologies, tariffs, or security-related trade measures may provoke Chinese regulatory retaliation, export controls, or scrutiny of British firms operating in China. Conversely, a muted response might signal an attempt to preserve certain trade flows amid its own economic slowdown. Understanding these signals helps U.K. firms manage compliance risk, supply chain exposure, and operational continuity in China.
Moreover, the Chinese response informs broader strategic questions for companies across Europe, Asia, and the Americas: Is the Chinese market still viable for long-term growth? What sectors may face rising political costs? Should we diversify to Southeast Asia or India? Strategists must model China’s likely behavioral and policy responses to external deals, especially where national security and economic statecraft intersect.
How should multinationals use wargaming for contingency planning in a possible Taiwan Strait conflict?
Wargaming is a key strategic method for stress-testing assumptions, identifying vulnerabilities, and rehearsing strategic responses to geopolitical shocks – none more consequential than a potential conflict in the Taiwan Strait. For multinationals, particularly in sectors with high exposure to geopolitical volatility like energy and finance, wargaming enables strategic functions to prepare before a crisis unfolds, rather than reacting when it’s already too late.
For energy companies, Taiwan Strait instability poses significant risks to shipping lanes, LNG markets, oil prices, and access to Asian downstream infrastructure. A conflict could disrupt the South China Sea, through which a third of global shipping passes – including vital crude and LNG shipments. Through wargaming, energy strategists can test how different conflict trajectories (e.g., limited blockade, kinetic escalation, sanctions regimes) affect upstream operations, refinery access, insurance premiums, and pricing volatility. These simulations allow energy firms to alter strategy ahead of time – by pre-positioning inventory, diversifying supply routes, accelerating investment in alternate markets, and stress-testing joint ventures in Asia that could become politically compromised. Importantly, they can also model regulatory responses from the U.S. and its allies – such as export controls on critical energy tech or decarbonization tools – and prepare mitigation strategies.
For financial institutions, especially asset managers and banks with diversified global portfolios, the Taiwan scenario has implications that go far beyond headline risk. A major conflict or sanction regime could freeze cross-border capital flows, crater equities with Taiwanese or Chinese exposure, provoke sovereign debt distress in Asia, and trigger a global risk-off cascade across emerging markets. Wargaming allows finance companies to model how a sudden de-risking event affects different asset classes – equities, bonds, currencies, and commodities – and how markets would react to secondary sanctions or insurance market seizures.
These simulations are not about predicting the future but about preparing multiple pathways. They enable investment committees to explore contingency options: rebalancing portfolios in advance, tightening exposure thresholds to specific geographies or suppliers, and developing structured communications to clients and regulators in the event of market dislocations. Crucially, wargaming exercises also allow boards and risk teams to refine trigger points – what early indicators will drive reallocation, capital calls, or market exits.
Without a doubt this scenario is the main one KSG has been wargaming through with clients in both the public and private sector.
Assess the role of AI in geopolitical risk analysis, scenario planning and wargaming in helping business leaders develop risk mitigation strategies.
AI has become an accelerant in the geopolitics space, particularly in three domains: early warning, scenario generation, and complexity management.
In geopolitical risk analysis, AI models can process vast volumes of open-source intelligence, trade flows, satellite imagery, and diplomatic signaling to flag emerging threats faster than traditional human analysis. Machine learning models, when paired with expert judgment, can refine probabilistic assessments and challenge cognitive biases – particularly in pattern detection, adversary modeling, and escalation forecasting.
For scenario planning, AI can generate plausible futures by combining structured data with large language models trained on diplomatic/military histories, conflict patterns, and market data. This allows strategists to widen their planning aperture beyond the “expected” or “most likely” scenario.
In wargaming, AI enables more dynamic and responsive adversary behavior and can simulate market or civilian responses to geopolitical events. Hybrid models – where human decision-makers are supplemented by AI-generated prompts or constraints – are especially valuable for testing non-linear risk cascades and unexpected actor moves.