The proliferation of Artificial Intelligence (AI) has far-reaching implications for society, politics, and the economy, necessitating cooperation and diplomacy for its development and governance. For smaller, developing nations like Nepal, balancing AI innovation with regulation is particularly challenging, requiring collaboration with regional and global actors. This report examines how AI is reshaping geopolitics, national security, and foreign policy, and how Nepal can leverage diplomacy to optimize this technology. (Socio-Politics/Science & Technology)