Overview

Artificial Intelligence (AI) is a driving force behind ASEAN’s ongoing digital transformation. With a rapidly expanding digital economy, AI is projected to contribute between 10% and 18% of the region’s GDP by 2030 (Prilliadi, 2025). Among the most disruptive innovations is Generative AI, which enables machines to produce human-like content, ranging from text and images to code and audio. Its early applications in sectors such as finance, healthcare, and education have shown promise in enhancing productivity, expanding financial inclusion, and improving fraud detection.

Despite these opportunities, ASEAN faces several structural challenges. Legal and regulatory frameworks remain fragmented across member states; digital infrastructure, AI readiness, and talent development are uneven; and public trust in AI technologies is still in its early stages (Prilliadi, 2025).

Recognizing these gaps, ASEAN has begun to take collective action through regional coordination and shared ethical principles. The ASEAN Guide on AI Governance and Ethics, endorsed in 2024, along with the upcoming ASEAN AI Malaysia Summit in 2025, demonstrates the region’s growing commitment to establishing a harmonized and future-oriented AI governance framework (ASEAN, 2024; ASEAN, 2025).

This policy brief outlines ASEAN’s current momentum, key national initiatives, and practical case studies that reflect the region’s evolving approach to responsible AI. By strengthening regional collaboration and embedding ethics into digital innovation, ASEAN can ensure that AI contributes to inclusive, sustainable, and equitable growth across all member states.

Background

Across ASEAN, nations are at varied stages of digital readiness and AI adoption. Economies like Singapore, Malaysia, and Indonesia have made significant investments in digital infrastructure and national AI strategies, positioning themselves as early movers in the regional transformation. Meanwhile, other member states continue to face capacity gaps in connectivity, skills development, and institutional frameworks. These disparities pose challenges to inclusive and interoperable digital growth across the region.

A particularly transformative advancement in this landscape is Generative AI—AI systems capable of creating content that mimics human output, including text, images, and code. This marks a paradigm shift from traditional rule-based automation to machine-generated creativity and reasoning. Generative AI enables new capabilities across both public and private sectors, from intelligent chatbots in e-government to AI-assisted agriculture, manufacturing, and financial services. As noted in recent discussions, "Generative AI goes beyond traditional rule-based AI by enabling systems to create, synthesize, and optimize content in ways that closely mimic human intelligence" (Kiantara, 2024).

However, this shift also introduces new risks. Generative AI models can produce human-like outputs that may be misleading, inaccurate, or biased, raising concerns around misinformation, fairness, and data ethics. Without appropriate governance, the rapid deployment of such technologies could undermine public trust and create barriers to cross-border AI integration (ASEAN Secretariat, 2024).

ASEAN governments increasingly acknowledge AI's central role in shaping future economic competitiveness and societal progress. With Southeast Asia hosting one of the world’s fastest-growing internet user bases, the region presents a fertile ground for AI-powered services. From automating customer interactions in banks to optimizing agricultural supply chains, AI is already reshaping key sectors. Yet, the absence of a cohesive regional framework risks fragmenting efforts and stalling broader digital integration. To ensure that all member states benefit equitably from AI advancements, ASEAN must develop harmonized policies that balance innovation with inclusion and safeguards. This has elevated AI governance as a regional policy priority, prompting collaborative actions which this brief will explore in the following sections.

Key Issues

ASEAN Momentum: Country Highlights

ASEAN's momentum in AI continues to accelerate, driven by strong national initiatives and a growing focus on regional cooperation. Member states are investing in infrastructure, formulating strategies, and convening leadership forums, while ASEAN works to harmonise ethics and governance across borders. This layered progress, spanning national actions and region-wide frameworks, lays essential groundwork for delivering AI benefits that are inclusive, secure, and innovation-driven.

Malaysia

• Host of ASEAN AI Malaysia Summit 2025: Malaysia is set to host the region’s first summit on AI policy and innovation in August 2025, demonstrating leadership in the AI space (ASEAN, 2025).

• RM43 billion (US$10.1 billion) grid upgrades: Tenaga Nasional’s investment in AI-infused power and battery storage systems aims to meet surging demand from data centres and AI infrastructure (Reuters, 2025).

• Green AI initiatives: Petronas is developing large-scale carbon capture and storage (CCS) projects and YTL is pioneering a solar-powered Green Data Centre Park, supporting both sustainability and AI growth (Reuters, 2025; Wikipedia, 2025).

Indonesia

• National AI Strategy by August 2025: Indonesia is finalising its first comprehensive AI roadmap to guide development in sectors like healthcare, agriculture, and fintech, and attract foreign investment (Reuters, 2025).

• Microsoft’s US$1.7 billion AI and cloud investment: Microsoft will build data centres and train 840,000 people in AI skills by 2025, marking its largest tech investment in Indonesia’s history (AP News, 2024).

• Rural digital access via Starlink: Indonesia is deploying SpaceX’s Starlink satellite internet to bridge connectivity gaps in remote communities, enabling broader AI adoption (Reuters, 2024).

ASEAN-wide Initiatives

• ASEAN Guide on AI Governance and Ethics (2024): Endorsed by Digital Ministers, this framework outlines shared principles such as transparency, fairness, and accountability (ASEAN Secretariat, 2024).

• Working Group on AI Governance (WG‑AI): Established to coordinate member states’ AI policies, develop guidance for generative AI, and align ethical standards (ASEAN Secretariat, 2024).

• High business uptake, growing concerns: While 85% of businesses report using AI, 47% also express heightened concern regarding trust, bias, and accountability (Ecosystm survey via Business Today, 2024).

• ERIA-led AI roundtables: These events support emerging start-ups—like Kata.AI and Nalagenetics—by addressing funding challenges, regulatory alignment, and capability development (ERIA, 2024).

Case Study: Implementation of AI Ethics and Governance in ASEAN

The application of ethical and governance principles for artificial intelligence (AI) is no longer a normative discourse, but has been effectively adopted by various public and private actors in ASEAN. The official ASEAN Guide on AI Governance and Ethics features numerous case studies that demonstrate how organisations are implementing AI governance principles in practice, from system design to implementation on the ground. 

Indonesia | Gojek – AI in Promotion Automation and Decision-Making

As an Indonesia-based technology company, Gojek uses AI to manage automated promotion allocation and maintain user engagement. In developing this model, Gojek established a clear internal governance structure, including a division of roles between the Data Science team and Campaign Managers. They also implemented an offline benchmarking process before model launch to ensure technical reliability, as well as a regular monitoring system to measure model performance directly in a production environment. In this way, Gojek prioritises not only technical performance but also maintains transparency and accountability across teams, embodying structured and collaborative governance principles.

Philippines | Aboitiz Group – AI Ethics and Risk Management Framework

Aboitiz Group, a Philippine conglomerate, has adopted a holistic approach to AI governance, encompassing organisational structure, risk management, and multi-stakeholder oversight. They established a cross-divisional AI governance committee comprising a Chief Data Officer, Chief Risk Officer, and Chief Technology Officer. They developed internal policies that explicitly emphasised the company's ethical values. To determine the level of human involvement in AI-assisted decisions, Aboitiz conducted pre- and post-deployment risk assessments. This step demonstrates how private sector organisations can build an AI ethics framework that is not only formal but also applicable across various business lines.

Singapore | Singapore's Ministry of Education – AI-Based Adaptive Learning System

The Singapore Ministry of Education (MOE) developed the Adaptive Learning System (ALS) within the national Student Learning Space (SLS) platform. ALS uses AI to recommend personalised learning paths for students while maintaining human oversight (teacher-in-the-loop) through a progress dashboard feature and manual teacher intervention. During the development process, the MOE engaged stakeholders, including teachers, policymakers, and curriculum experts, to ensure the system aligned with educational values and user needs. ALS is an example of human-centric AI implementation, where students needs and human control remain at the centre of the system's design.

Challenges in the ASEAN Region

Despite the enormous potential for digital transformation in ASEAN, various structural challenges continue to hinder the optimal utilisation of AI technology. Legal and regulatory frameworks related to AI remain fragmented across countries. The absence of binding regional legislation leads to differing approaches that can hinder interoperability and cross-border technology integration. Another increasingly pressing challenge is the intense data and energy consumption of data centres and advanced AI systems. If not managed wisely, this surge in energy consumption has the potential to increase carbon emissions and put pressure on ASEAN's efforts to decarbonise.

Furthermore, the shortage of AI talent presents a significant challenge to policy formulation, technical oversight, and the development of AI-based products. This gap is not limited to the private sector but is also evident in the technical capacity of government agencies and regulators. According to ASEAN (2024), the AI Governance Principles should be harmonised by referring to the framework's guiding principles (Figure 1). This Guide focuses on encouraging alignment within ASEAN and fostering the interoperability of AI frameworks across jurisdictions. It also includes recommendations on national- and regional-level initiatives that governments in the region can consider implementing to design, develop, and deploy AI systems responsibly.

Figure 1. AI Guiding Principles for the Framework

Source: ASEAN, 2024

Policy Recommendations for ASEAN

To address the strategic challenges facing the region, ASEAN needs to adopt a hybrid approach to AI governance, combining the principles of flexibility and innovation while maintaining a strong foundation in ethics and accountability. This approach can draw inspiration from various global models. Within ASEAN, early efforts by countries like Singapore and the Philippines demonstrate how institutional and private sector leadership can operationalize responsible AI governance. In contrast, Indonesia and Malaysia remain in the development stage but have signalled strong political and financial commitment to advancing AI readiness. These varied approaches across member states underscore the need for regional coordination, as outlined in Table 1.

Table 1. Mapping Benchmark Approaches to AI Ethics and Regulation in ASEAN.

 Sources: ASEAN, 2024

 One crucial aspect of AI governance that should not be overlooked is the ethical dimension. Ethics are the foundation for public trust in the use of AI, particularly regarding algorithm transparency, fairness in automated decision-making, personal data protection, and accountability for social and economic impacts. To this end, ASEAN needs to strengthen and expand the implementation of the ASEAN Guide on AI Governance and Ethics, so that it becomes an operational, rather than merely normative, guideline tailored to the national capacities of each member state.

Furthermore, as the need for digital infrastructure increases, ASEAN must direct the development of data centres and AI systems toward greater sustainability. Support for green data centres, the use of renewable energy, and integration with the ASEAN Power Grid program must be prioritised to ensure that digital transformation aligns with the region's commitment to decarbonization and energy security.

Collaboration between the public and private sectors also needs to be strengthened. Forums such as the ASEAN AI Malaysia Summit can serve as permanent platforms for policy dialogue, consensus-building on technical standards, and cross-border learning and collaboration. Initiatives such as regulatory sandboxes and support for AI startups also need to be expanded to encourage innovation that remains ethically and legally controlled.

For businesses in ASEAN, their role extends beyond being users of AI technology to also being key actors in ensuring the responsible implementation of AI. Companies are advised to begin implementing ethical AI principles, such as model transparency, consumer data protection, and human oversight of automated decisions. These practices can be implemented through the appointment of an AI accountability officer, the development of internal policies that align with ASEAN ethical guidelines, and regular system risk evaluations. A commitment to ethics not only fosters trust among customers and international partners but also prepares for future regulations.

Finally, human resource capacity development is the foundation for sustainable AI governance in the region. ASEAN needs to promote AI training and education that emphasises not only technical aspects but also the integration of ethical values, accountability, and digital security. Partnerships among governments, universities, and the private sector are crucial for developing talent capable of responsibly building and overseeing AI.

Conclusion

ASEAN’s digital transformation is accelerating, and AI—especially Generative AI—is redefining what’s possible. However, as the seminar insights show, without inclusive, trusted governance and capacity development, the benefits will be unevenly distributed. A collaborative ASEAN AI policy framework can secure innovation while protecting rights and reducing inequality.

References:

ASEAN. (2024). Joint media statement of the 4th ASEAN Digital Ministers’ Meeting (ADGMIN) – Endorsement of ASEAN Guide on AI Governance and Ethics. ASEAN Secretariat, Singapore.

ASEAN. (2025). Malaysia to host inaugural ASEAN AI Malaysia Summit 2025 [Press release].

ASEAN Secretariat. Retrieved from https://asean.org/malaysia-to-host-inaugural-asean-ai-malaysia-summit-2025/

AP News. (2024). Microsoft will invest $1.7 billion in AI and cloud infrastructure in Indonesia.

Australian Government, Department of Industry, Science and Resources (National AI Centre). (2024). Voluntary AI Safety Standard – Guiding safe and responsible AI use in Australia.

Business Today. (2024). Getting ASEAN ready for AI: Survey highlights key findings.

ERIA – Economic Research Institute for ASEAN and East Asia. (2024). Unlocking ASEAN’s AI start-up potential: ERIA convenes second policy roundtable.

ERIA – Economic Research Institute for ASEAN and East Asia. (2025). Prilliadi, H. Harnessing AI for ASEAN’s future: Governance, adoption, and sustainability under the DEFA (ERIA Policy Brief No. 2025-01). Jakarta.

European Commission. (2024). European Artificial Intelligence Act enters into force [News release]. Directorate‑General for Communication, Brussels. 

Isono, I., & Prilliadi, H. (2023). Accelerating artificial intelligence discussions in ASEAN: Addressing disparities, challenges, and regional policy imperatives. Economic Research Institute for ASEAN and East Asia.

Kiantara, R. F. (2025). Generative AI in Indonesia’s financial sector: Challenges and opportunities [Conference presentation]. The 3rd CFP JCLI – Journal of Central Banking Law & Institutions, Bank Indonesia, Yogyakarta.

OpenGov Asia. (2025). Indonesia leading ASEAN’s digital transformation. Retrieved from https://opengovasia.com/indonesia-leading-aseans-digital-transformation/ 

Reuters. (2025). Indonesia targets foreign investment with new AI roadmap, official says.

Reuters. (2025). Malaysia PM says $10 billion committed to national grid upgrade.

Reuters & AP News. (2025). AI investments in Indonesia. 

Xinhua News Agency. (2023). China moves to support generative AI, regulate applications. Via english.gov.cn.

Zhu, Q., & Shen, Z. (2025). Digital transformation in ASEAN humanities: Integration of AI and language technologies for multilingual information retrieval. African Journal of Library, Archives and Information Science, 35(1). 

ASEAN Centre for Energy. (2025). The rise of data centres, artificial intelligence and ASEAN’s decarbonisation goal. Retrieved from https://accept.aseanenergy.org/the-rise-of-data-centres-artificial-intelligence-and-aseans-decarbonisation-goal/