Infrastructure to Intelligence: The AI Development Paradigm in Southeast Asia
For as long as there has been organised international development, infrastructure has served not only as a driver of economic growth, but as a conduit of power. Colonial railways determined the orientation of trade and the extraction of resources; post-war dams and electrification projects underwrote the legitimacy of new states; telecommunication cables and satellites integrated developing economies into global information flows (albeit on terms set by the providers).
With each of these physical systems however, came more than concrete or steel. They came with governance models, technical standards, and often, the cultural priorities of their originators. As scholars have long noted, the building of infrastructure has always been a political as well as a technical project. The age of AI should be considered no different.
This article explores artificial intelligence as the latest heir to the infrastructure-as-development lineage, centering Southeast Asia (SEA) as a barometer for global AI diplomacy. The region’s ongoing approach of hedging between U.S. and Chinese influence offers a timely window for observing how expansive AI efforts are unfolding in contested spaces, particularly within Global Majority nations. I discuss how AI’s general-purpose capacity, its function as a conduit of power, and its ability to embed new norms and governance models position it as a coming paradigm of global development – one in which recipient nations' choices will carry lasting consequences.
AI as Development
In the contemporary iteration of infrastructure-as-development, competition between major powers may be materially understood as a competition over who will build and maintain AI systems in partner countries. In other words, what capabilities will be made available to whom, by whom, and at what cost. Such choices are rarely reversible; once standards are embedded, they create deep path dependencies that bind states to the technical and governance logics of their providers. Unlike earlier paradigms of roads or electricity however, AI is both material and epistemic. That is to say, the technology may rest on chips, data and compute, but it also directly imports governance logics, cultural biases and commercial interests embedded in the models themselves.
Whereas earlier forms of infrastructural development imported culture more diffusely through technical standards and institutional arrangements, the export of AI systems constitutes a more potent form of this same tincture, embedding normative assumptions and value systems within the very functioning of the technology.
Framed in the context of Sino-American geopolitical rivalry, analysts suggest that Chinese systems, developed in the context of strong state oversight, are more permissive of centralised or authoritarian applications of AI, whereas U.S. systems reflect assumptions rooted in market-driven traditions. This dual-character risks locking recipient regions not only into long-term technological dependencies, but into external value systems – a potentially powerful form of digital colonialism.
These embedded logics matter all the more because AI is not merely acting as a niche tool, but is increasingly considered to be a “general-purpose technology” (‘GPT’ — but not the one you think!). In economics literature, GPTs are technologies that are pervasive across sectors, improve continuously, and spawn complementary innovations (e.g. steam power, electricity, computing etc). As with other historical examples of GPTs, this combination means that once AI systems take root, they are unlikely to remain confined to a single sector. Instead, GPTs have historically triggered knock-on innovations, compelling private-sector adjustments that deeply permeate government policy and wider institutional arrangements.
This all has particular relevance when considering where the fight for AI supremacy is taking place. Unlike other regions where diplomatic allegiances tend to lean more in one way or another, Southeast Asia stands apart for its deliberate, seemingly consistent policies for maintaining hedged neutrality between major powers. Governments walk a tightrope; courting both U.S. and Chinese investment without ever committing wholly to either.
This balancing act matters, partly because Southeast Asia holds such immense developmental promise, and partly because it shows – for the moment – that AI path dependencies are still subject to choice. Having large, tech-literate populations and rapid digitalisation already underway, Southeast Asian nations present a compelling case for seizing the AI opportunity on their own terms. However, with the region also being subject to pressing and uneven development needs across different sectors and provinces where AI could help deliver transformative gains, the opportunity is also situated at a pivotal moment.
For the U.S. and China the region is both a prize and a battleground. For nations across Southeast Asia, the question appears as one of diminishing returns: how long can neutrality be sustained before the advantages of hedging give way to the costs of delay – or until the terms of alignment are imposed from the outside.
ASEAN: Opportunity and Constraint
At the regional level, Southeast Asian policymakers are far from ignorant of the encroaching geopolitical landscape. ASEAN, for instance, has been highly proactive in shaping terms for incoming AI arrangements. Having released principle-driven frameworks such as ASEAN Guide on AI Governance and Ethics as well its somewhat more cautionary guide to generative AI, the regional body has taken steps to both insulate member states from the ethical risks of AI, while presenting (in rhetoric, at least), a regionally-unified front. This was strengthened further by the ASEAN Responsible AI Roadmap which proposed more concrete steps to seize the AI opportunity before 2030. In combination, these documents highlight a clear ambition to shape common ground amongst ASEAN nations, as well as shore up regional bargaining power in the face of powerful market entrants.
While these developments show a great deal of initiative in maintaining control of the AI narrative, commitment remains voluntary rather than obligatory, and may be more broadly reflective of ASEAN’s approach to consensus-driven decisionmaking. Indeed, as recent analysis has pointed out, there may be greater opportunity for the region in pursuing interoperable standards among ASEAN member states, rather than seeking strict regulatory uniformity.
Perhaps unsurprisingly then, uneven development, varying state capacities, political will, and an colourful assortment Sino-American diplomatic ties have all shaped the effectiveness of individual nations in subscribing to the ASEAN roadmap. Importantly, while hedging remains a prominent strategy to temper external influences, such strategies are far from coordinated. While space precludes a full analysis here, the position of the key players in the region are broadly summarised below:
Singapore stands alone as a regional leader. Strong institutions, a deep talent base, and well-established Western partnerships underpin governance models that are broadly compatible with Western standards. This orientation is reinforced both by its hosting of major U.S. cloud facilities and by its leadership in regional initiatives such as localized language models and AI safety toolkits, illustrating both compatibility with Western norms and an ambition to shape governance on its own terms.
Cambodia and Myanmar, by contrast, are deeply embedded in Chinese-led ecosystems. Smart-city and surveillance projects have imported Beijing-linked standards into public administration, a reliance compounded by some weak institutions and limited digital infrastructure, leaving these states especially vulnerable to external direction.
Indonesia, Vietnam, Thailand, and Malaysia occupy a hybrid space. Each nation to some degree blends U.S. partnerships in cloud and digital trade with Chinese-backed infrastructure and supply chains. Their approaches reflect both ambition and constraint. Indonesia’s scale and appetite for innovation are tempered by persistent talent shortages; Vietnam has cultivated homegrown AI startups but remains reliant on imported infrastructure; Thailand has moved ahead with draft generative-AI legislation and principles, yet weak data quality and cybersecurity undermine their implementation; and Malaysia, though institutionally stronger than most, has leaned increasingly on Chinese providers in areas such as 5G and smart-city projects.
Yet the balancing act in each nation is becoming increasingly difficult to sustain. Both Washington and Beijing, albeit through very different means, are steadily reducing the space available for hedged manoeuvring. Under the Trump administration, the U.S. has turned to ever-more assertive measures, ranging from tariff threats and export controls, to a diplomacy of ‘trusted technologies’ that seeks to inch partners toward U.S. suppliers and governance models. China, by contrast, relies less on legislative strong-arming and more on widespread, consistent integration with partner nations. By embedding its standards through infrastructure, digital platforms, and supply-chain dominance, Beijing has taken a slowly-but-surely approach to binding Southeast Asian economies more concertedly to Chinese-made systems. Meanwhwile, widespread chip-smuggling operations are dragging the region more sharply into the centre of the argument than is helpful. For Southeast Asia however, the net effect remains the same: whether through pressure, entanglement or deepening ties with both sides, the room for manoeuvre on which hedging depends is steadily being eroded.
ASEAN has sought to respond to this squeeze by advancing the Digital Economy Framework Agreement (DEFA), slated for conclusion in late 2025. If realised, DEFA would be the world’s first binding, region-wide digital economy accord, setting common rules across digital trade, e-commerce, cross-border data flows, cybersecurity, and AI governance. Proponents argue it could help propel ASEAN’s digital economy toward $1 trillion by the end of the decade, while presenting the region with a stronger, more unified position in international digital trade negotiations. Yet the agreement’s design arguably reflects the very same political and developmental constraints it seeks to overcome. The proposed two-tier model would allow digitally advanced members to move faster while others follow with support. While this flexibility helps to make consensus possible, it also risks further entrenching divides – locking less digitally ready states into a subordinate position and undermining ASEAN’s much-needed claim to cohesion. Unless backed by meaningful investment and sustained political will, DEFA risks remaining more a symbol of aspiration than a vehicle of regional agency.
Stormy SEA Ahead?
At time of writing, Southeast Asia’s AI future remains open. Analysts disagree on whether mounting U.S. pressure is pushing the region into more inventive forms of hedging , or whether China’s expanding digital footprint is already cracking the strategy of safe distance. Both readings capture an essential truth: hedging cannot continue indefinitely. As the space is continuously narrowed, Southeast Asian nations will have to get creative in order to take best advantage of the encroachment of major powers; and in many ways, they already are. Multiple pathways exist: sustaining neutrality while leveraging AI for domestic growth; cultivating a pluralist, pragmatic, and interoperable ‘Southeast Asian way’; or fragmenting under external pressure in pursuit of short-term gain (or at least, mitigating loss).
What follows for policymakers, is that AI must be understood as not merely another technology to be adopted, but as a development paradigm in its own right – one that is multipolar and suitably grey in its implication. In this way, the choices made in the coming months and years may be understood not only as shaping the development pathways of Southeast Asia, but as a litmus test for global AI governance in a time of increasingly high-stakes and ever-more aggressive geopolitical diplomacy. The challenge for Southeast Asia is in transmuting neutrality into genuine agency: to channel external competition into durable, equitable outcomes; or to risk becoming shackled to an unwanted path.
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