The recent wave of American tariffs on allies and adversaries alike has fractured the global economy to a degree we haven’t seen in decades. While the tariffs have, for now, only targeted goods, for multinational companies, this recent round of trade brinksmanship reflects a broader, sustained shift towards greater complexity and volatility in their global operations.

This splintering has also prompted the emergence of new geographic boundaries in the digital economy. The result is that just as technology has assumed a central role, touching nearly every aspect of a company’s operations, geopolitical tensions are limiting which technologies international firms can use and how they can use them, threatening to wipe out the gains from increasing technological integration.

This is a dramatic U-turn from the longstanding prevailing corporate belief of a continued expansion of the transnational digital economy. That belief drove multinationals to centralize their tech stacks as they banked on their continued ability, for example, to dispatch top tech staff across the globe as they saw fit, and to transmit data freely across borders to benefit from their scale.

This new market environment, however, has upended that assumption and elevated IT resilience from what was once an operational concern to a strategic imperative. Simply keeping up with technological change to avoid ending up as “roadkill on the information highway” is not enough anymore. Today, companies must compete and innovate while also tiptoeing around the widening geopolitical cracks of the global economy

Navigating this new, fractured global economy requires a different approach for multinational players that starts with finding a strategic balance between operational resilience and flexibility and operational efficiency. Building resilience and proactively mitigating risk through “just-in-case” operations can be costly, but centralized tech stacks and operations are now an important driver of enterprise risk.

To strike that balance, multinationals should assess their exposure to geopolitical disruption by focusing on two core variables: the regional footprint of their tech operations and the layers of the tech stack that they are most reliant upon. To illustrate this balance, we analyzed the impact of geopolitical fragmentation on the GenAI tech stack of a European automotive supplier operating globally, including in China, the U.S., and the European Union.