The race to develop artificial general intelligence is no longer just a technology story. It is emerging as a global competition with economic, geopolitical, and systemic implications, precisely the kind of long-horizon risk public pension fiduciaries are expected to monitor. A new RAND Corporation report, A Prisoner’s Dilemma in the Race to Artificial General Intelligence, offers a clear, neutral way to understand what’s driving this race and why it matters.

The 2025 report, written by RAND researchers Lisa Abraham, Joshua Kavner, and Alvin Moon, uses a simple game-theory model to explain why nations may accelerate AGI development even when doing so increases shared risks. All findings in this article are drawn directly from the report.

 For a conversation about the report—and practical insights on how pension fund managers can discuss its findings with their boards—listen to our latest podcast episode of The TEXPERS Deep Dive: https://www.podbean.com/ep/pb-6tzz9-19e027a.

Inside the Report: Who, What, and Why It Matters

The study comes from RAND’s Center for the Geopolitics of Artificial General Intelligence, part of the organization’s Global and Emerging Risks division. The center focuses on some of the most consequential challenges shaping civilization and global security.

The authors model how countries choose between two strategies:

• Baseline development, which emphasizes risk mitigation.
• Accelerated development, which speeds progress by pulling resources away from safety measures.

The report examines both one-time and repeated decision scenarios to illustrate how incentives, perceived risks, and expected rewards influence national strategies. The goal is not to predict when AGI will arrive, but to show how nations behave under different conditions and why cooperation is so tricky.

Key Findings: Incentives That Push Nations Toward Risk

The RAND model highlights several strategic pressures:

• First-mover advantage is powerful. The country that reaches AGI first stands to gain significant economic and strategic benefits.
• Accelerated development increases shared risk. Pushing ahead without adequate safeguards increases the likelihood of developing an unaligned or uncontrolled AGI, which could enable new weapons or cause instability among major powers.
• The race resembles a classic prisoner’s dilemma. Even when countries recognize that restraint would make everyone safer, each has an incentive to move ahead out of fear of falling behind.
• Cooperation requires shared risk recognition. Countries will consider coordination only when they agree that the dangers of accelerated development outweigh first-mover benefits.
• Verification is essential. In ongoing development scenarios, cooperation holds only when nations can detect and respond to noncooperative behavior.

What This Means for Public Pension Fiduciaries

The report’s findings may appear abstract, but they point directly to the long-term, system-level risks fiduciaries are expected to understand and monitor.

Long-horizon risk awareness. AGI development could reshape global economies, public finances, and workforce needs. Trustees responsible for decades-long obligations must understand how such systemic forces may affect future returns.

Potential for market and geopolitical volatility. The report frames AGI as both an economic opportunity and a potential source of instability between great powers. Either outcome, rapid technological gains or strategic conflict, could influence global markets, supply chains, and public budgets that fund retirement systems.

Informed strategic planning. A clear understanding of the incentives driving AGI development enables trustees to prepare for shifts in investment landscapes, correlations, and risk profiles. Even without predicting outcomes, understanding the logic of this race helps boards think strategically about emerging risks.

A grounded framework for big-picture oversight. The RAND model cuts through hype by presenting a structured way to think about an issue that often generates extreme or speculative narratives. For fiduciaries, it serves as a tool for disciplined foresight rather than prediction.

Conclusion: Monitoring Transformative Risk Is Part of the Job

Public pension systems will not decide how AGI is developed. Still, they will live with the economic and geopolitical environment it shapes. The RAND report helps fiduciaries see the underlying incentives driving the AGI race and the potential systemic risks that may follow. In an era of rapid technological change, monitoring these forces is not optional; it is a core part of safeguarding long-term retirement security.

About the Author: Allen Jones is the director of communications and event marketing for TEXPERS. He joined the Association in 2017. Before TEXPERS, he worked in the news media industry, producing content for newspapers, magazines, and online publications and leading newsrooms as an editor and publications manager. [email protected]