Southeast Asia Balances US, China AI Influence

Region Seeks Own Tech Path Amid Superpower Competition

As the U.S. and China vie for dominance in artificial intelligence, Southeast Asian nations are aiming to carve out their own technological niche rather than being forced to choose sides. This was a key theme at CNBC’s East Tech West 2025 conference in Bangkok.

Avoiding a Zero-Sum Game

According to Julian Gorman, who heads the Asia and Pacific region for the GSMA, a trade organization, being compelled to pick between the two leading global powers would be detrimental to Southeast Asia. He noted the region’s significant reliance on both countries.

“Southeast Asia is highly dependent on both China and America. I think it is quite difficult to believe that they are going in one way or another,” Gorman stated.

Gorman stressed the importance of focusing on technological standardization and collaboration to transcend geopolitical tensions and harness technology for universal benefit. Increased fragmentation could hinder progress.

US and China Vie for Influence

Initially, Southeast Asia gravitated towards U.S. models from companies like Google and Microsoft, according to George Chen, Asian Group Managing Director and Co-Chairman. However, the rise of Chinese deep learning has made those company models increasingly appealing in Southeast Asia, due to their affordability and open-source licensing, enabling customization for regional needs.

Open source models are viewed as critical for regions outside the U.S. and China to develop independent AI capabilities. As of June 2024, over 184,000 open-source AI projects were available on GitHub, highlighting the rapid growth and collaborative nature of this field (GitHub Octoverse Report 2024).

While the U.S., led by Nvidia, dominates AI processor technology, access to these chips remains open in the Southeast Asian market. Chen advised the region to continue leveraging this advantage. However, he also cautioned that China might emerge as a provider of cheaper alternatives within the next decade.

“Don’t be easy and too fast. Think about how to maximize your economic potential,” he advised.

Gorman pointed out that this balancing act is not new to the region. Southeast Asia’s mobility sector, for instance, heavily relies on Chinese technology for production and hardware, while also depending on the U.S. for other aspects like telecommunications.

Regional Advantages

Despite the U.S. and China being ahead in AI development, panelists emphasized that Southeast Asia possesses unique strengths in the global AI landscape.

“If you are thinking of ai as a technology, you should, after all, apply it to a real product or service. It can be used by people,” Chen said.

Chen noted the region’s robust app ecosystem and youthful demographics provide strong potential. Additionally, research and development costs are relatively lower compared to other regions.

These cost advantages have fueled Malaysia’s emergence as a major hub for AI data centers and computing, particularly in South Johor.

To advance further, Southeast Asia should attract companies with advanced expertise that can benefit local industries, mirroring China’s strategy for catching up with the West in progressive technologies, according to Chen.

Potential Leadership in AI Regulation

According to Gorman, Southeast Asia could act as a neutral ground for China and the U.S. to engage in discussions on responsible AI application. He pointed to regulatory initiatives like Singapore’s shared responsibility framework for scams and fraud as examples of the region’s proactive approach.

While the EU has adopted an AI policy, the U.S. and ASEAN countries have yet to implement similar comprehensive regulations. Chen suggested that adopting joint frameworks would give the region a more prominent role in global AI development and regulation.