The study examines how authoritarian and democratic political institutions can affect innovation in the field of artificial intelligence. The paper shows how authoritarian states can gain a competitive advantage in the development of new AI systems, if large amounts of data – generated for example through state surveillance – are being used as subsidies by the state, to advance research in AI. The study will appear in the book "Diginomics Research Perspectives: The Role of Digitalization in Business and Society" edited by Lars Hornuf, and can be downloaded through the following link: https://arxiv.org/pdf/2111.00992.pdf