Asean must watch US-China deal on AI

When President Donald Trump and President Xi Jinping meet in Washington today, attention will inevitably focus on trade, tariffs, strategic rivalry and the wider trajectory of Sino-American relations.

Yet another issue may prove even more consequential: artificial intelligence.

International relations are increasingly about how the United States and China manage AI — not merely how they compete over it.

Ahead of the summit, US treasury secretary Scott Bessent said Washington had proposed an AI safety notification mechanism through which the two countries could alert each other to AI-related incidents serious enough to affect national security.

The proposal is still preliminary. Its thresholds, procedures and institutional arrangements remain to be negotiated.

Nevertheless, the fact that Washington and Beijing are discussing such a mechanism is important.

Malaysia and Asean must watch carefully.

For decades, international relations have revolved around military power, nuclear deterrence, trade, energy security and strategic waterways. All remain crucial. But AI is rapidly becoming another organising principle of international power.

The states controlling advanced AI models, semiconductor supply chains, computing infrastructure, data and technological talent will possess advantages extending far beyond the digital economy.

AI increasingly touches intelligence, cybersecurity, manufacturing, financial markets, logistics, military planning and critical infrastructure.

The US-China relationship therefore contains two seemingly contradictory dynamics — competition and cooperation.

Competition is unavoidable.

Washington does not want China to overtake the United States in frontier AI. Beijing has equally little intention of accepting permanent technological dependence on America.

Their rivalry consequently extends across semiconductors, computing power, algorithms, data centres, investment and scientific talent.

But cooperation is becoming equally necessary.

Neither country benefits if advanced AI produces catastrophic cyber incidents, disrupts critical infrastructure or generates an escalation that neither government intended.

During the Cold War, Washington and Moscow eventually understood that intense nuclear competition required communication precisely because they distrusted each other. AI increasingly requires a comparable logic.

An AI-related incident affecting electricity grids, financial systems, communications networks or military infrastructure could easily be interpreted as deliberate aggression.

Was an attack authorised? Was it accidental?

Did an autonomous system behave beyond the intentions of its operators? That is potentially a dangerous self recursive improvement system.

Without communication, technological accidents can become geopolitical crises.

This is where Asean has a direct interest.

Southeast Asia sits economically and strategically between the world’s two largest powers.

Asean economies are deeply connected to Chinese manufacturing and trade while simultaneously depending extensively on American technology, investment and financial markets.

Asean cannot afford an AI world divided completely into hostile technological blocs.

Neither should Asean simply accept rules written in Washington and Beijing.

Malaysia and other Asean members must strengthen their capabilities in AI governance, cybersecurity, data protection and technological diplomacy.

Malaysia has particular reasons to pay attention.

Its expanding semiconductor, data centre and AI ecosystems mean that technological sovereignty will increasingly overlap with economic and national security.

But sovereignty does not mean isolation.

No Southeast Asian country can independently control every layer of the AI ecosystem.

Hardware may originate in one country, cloud infrastructure in another, algorithms elsewhere and data across multiple jurisdictions.

Asean must therefore remain polytropous — spreading and deepening its technological relationships without surrendering strategic autonomy to either major power.

Asean’s diplomatic tradition may also have something useful to contribute. Its emphasis on dialogue, confidence-building and incremental institutionalisation can appear slow.

Yet AI governance requires precisely the ability to keep competing powers talking without demanding complete strategic alignment.

The Trump-Xi summit should therefore be watched as more than another encounter between two great powers.

If Washington and Beijing can construct even rudimentary guardrails around dangerous AI incidents, they will have acknowledged an important reality — technological superiority does not eliminate mutual vulnerability.

Malaysia and Asean should support such dialogue while insisting that global AI governance cannot eventually become an exclusive US-China condominium.

Southeast Asia and the wider Global South must have a voice too.

Today, Sept 24, 2026, could therefore mark an important moment in international relations.

The central question of the AI age is no longer simply whether America or China will lead.

It is whether both can compete intensely while establishing sufficient guardrails to prevent their competition — or their increasingly powerful machines — from producing consequences that neither can control.

For Malaysia and Asean, watching this relationship carefully is no longer optional.

It is becoming an essential part of diplomacy in the age of artificial intelligence. Three concrete actions should follow.

First, Malaysia and Asean should establish a regional AI safety and incident-reporting mechanism.

It should connect national regulators, cybersecurity agencies, critical-infrastructure operators and defence establishments, with clear procedures for reporting serious AI failures, which invariably include cyber incidents and unintended system behaviour.

Regular exercises and confidential communication channels would help distinguish accidents from deliberate attacks before they escalate.

Second, Asean should create a permanent regional forum on AI governance and strategic stability.

Meeting regularly under an Asean-led framework, it should bring together governments, technical experts, industry and civil society to develop common standards on testing, transparency, data protection, autonomous systems and the use of AI in security operations.

Asean should also coordinate its positions in global institutions so that Southeast Asia is a rule-maker rather than merely a rule-taker.

Third, Malaysia and its Asean partners should invest collectively in technological autonomy.

This means expanding regional research and development, semiconductor packaging and testing.

Indeed, that includes securing cloud infrastructure, public-interest datasets, AI education and trusted digital infrastructure.

Diversifying suppliers is essential, but so is building indigenous capabilities that reduce dependence on any single external power while preserving openness to international cooperation.

These steps would not make Asean immune to great-power rivalry.

They would, however, give the region greater resilience, bargaining power and strategic choice.

For Malaysia and Asean, watching this relationship carefully is no longer optional.

It is becoming an essential part of diplomacy in the age of artificial intelligence.

The views expressed are those of the writer and do not necessarily reflect those of FMT.

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