Sovereign AI in ASEAN: More Than Just Models

A recent article in The Diplomat, "Can Southeast Asia Benefit From the China-US AI Race?", frames the region's AI development as a navigation of great power competition. The piece suggests that as the US and China use technology as a tool of influence, ASEAN states must weigh the benefits of engagement against the concessions they may have to make. This correctly identifies the geopolitical stakes but overlooks a deeper, structural dimension of AI sovereignty.

The Infrastructure Layer

The development of artificial intelligence is often viewed through the lens of model creation and application deployment. However, the true foundation of a sovereign AI capability rests on the underlying infrastructure. As discussed in ASEAN Rising, the real test for AI in the region is not about launching new models, but rather about "who controls the compute, the data layer and the digital identity rails that sit underneath everyday economic life."

Access to high-performance computing is the most immediate constraint. The concentration of advanced semiconductor fabrication and cloud computing capacity outside of Southeast Asia creates a structural dependency. While nations like Singapore and Malaysia are attracting significant investment in data centers, a considerable portion of the region's processing power for advanced AI training remains reliant on external providers. This raises long-term questions about resilience, cost, and the ability to pursue independent AI development paths without external influence or disruption.

Data and Digital Identity

Beyond compute, the control of data and digital identity systems represents a core component of AI sovereignty. Data is the essential feedstock for training relevant and effective AI models. For ASEAN to develop AI that serves its specific economic and social contexts, it must have access to large, high-quality datasets generated within the region. This requires robust data governance frameworks that can facilitate data sharing for innovation while upholding privacy and security standards.

Digital identity is the mechanism through which data is accessed and authenticated in the digital economy. Systems that manage how individuals are identified online are becoming inseparable from economic participation. If these fundamental rails are designed and controlled by external actors, it could subordinate the region's digital economy to foreign standards and priorities. Establishing trusted, interoperable digital identity systems at a national and regional level is therefore a prerequisite for a self-determined digital future. The execution of such institutional frameworks will be a defining factor.

The Role of Capital

Capital allocation will direct the future of ASEAN's AI ecosystem. The flow of investment, whether from domestic sources or international partners, determines which parts of the AI stack are built out. If investment prioritizes application-level services that rely on foreign infrastructure, it may yield short-term gains but deepen long-term dependencies.

Conversely, if private and public capital can be directed toward building out the region's own compute capabilities, data infrastructure, and digital identity solutions, it can foster a more balanced and sustainable AI environment. The challenge for ASEAN institutions is to create the right policy signals and de-risk investments in these foundational layers, encouraging a long-term view on sovereign capability over immediate returns from application-level deployments.

What to watch: The extent to which ASEAN member states coordinate their investment in and regulation of the foundational layers of AI will determine the region's autonomy in the digital era. Observe whether national AI strategies prioritize the development of domestic compute, data governance, and digital identity systems, or if they continue to focus primarily on adopting applications built on external infrastructure. The balance of these choices will shape Southeast Asia's role in the global AI landscape.