US and China Are Pushing Southeast Asia to Pick an AI Side. Will It Crack?

Southeast Asian leaders have long insisted they will not choose sides in the rivalry between Washington and Beijing, but that stance is facing a new and difficult test as artificial intelligence becomes the central battleground [224853]. The United States is preparing to send a blunt message to its 35 closest partners: neutrality is no longer an option [220499]. A draft letter seen by Reuters warns that continued access to American AI technology and investment will depend on a country's alignment with U.S. policy, meaning partners who continue working closely with China risk losing U.S. support [220499].

Washington is pushing the region to join what it calls "Pax Silica"—a plan to build an AI supply chain that excludes China—while Beijing is urging neighbors to join its own group, the World Artificial Intelligence Cooperation Organisation (WAICO) [224853]. Both powers are actively courting Southeast Asian governments, each seeking to lock the region into its own technology bloc [224853].

The pressure comes as China has become the dominant builder of physical internet infrastructure in countries like Thailand, Malaysia, and Indonesia, winning major contracts to lay undersea cables and build cloud servers [224887]. However, infrastructure is not the same as influence: the rules governing data flows, cybersecurity, and e-commerce in Southeast Asia are still being written by local governments, Western tech giants, and regional blocs like the Association of Southeast Asian Nations (ASEAN) [224887]. China has so far failed to export its own model of internet governance, one that favors state oversight and data localization [224887].

For now, the region's official position remains non-alignment [224853]. Indonesia, for example, is looking for new partners to bolster its security and economy while staying true to its non-aligned foreign policy, with Japan emerging as a key contender for the role of principal partner in Asia [223639]. Jakarta has made clear it will welcome partnership, but not at the cost of its independent foreign policy [223639].

The question is how long Southeast Asia can keep refusing to pick a side [224853]. With AI becoming central to economic growth and security, the pressure is rising on governments across the region to make a choice that could define their technological and economic futures for decades [224853].