This study aims to develop a new theoretical framework to explain how geopolitical disintegration in the Middle East and Red Sea region generates transregional shocks that disrupt multinational enterprises (MNEs) and how artificial intelligence (AI) capabilities enhance firm-level strategic resilience.

This study introduces the transregional shock transmission (TST) theory and uses a multi-method quantitative design. It integrates panel data from 75 MNEs in the logistics, energy and shipping sectors with event-based conflict data and machine-coded news sentiment analysis for 2013–2024. A moderated mediation model is tested using structural equation modeling to examine the relationships between geopolitical instability, risk perception, strategic adaptation and AI capabilities.

Firms with advanced AI-driven risk intelligence systems demonstrate significantly higher resilience to geopolitical shocks. These firms adapt supply chains more rapidly, mitigate financial losses and restore operations more efficiently. AI capability moderates the adverse effects of geopolitical disintegration by enhancing real-time risk perception and adaptive decision-making.