Japan & ASEAN Forge AI Alliance Amid Tech Rivalry

Japan and officials from the Association of Southeast Asian Nations (ASEAN) have agreed to collaborate on developing artificial intelligence tailored to the region's unique languages and cultures. The partnership aims to help Southeast Asian countries build "sovereign AI" and reduce their growing dependence on Chinese technology.

For Japan, this strategic move is an opportunity to help its domestic AI firms expand into new, high-growth markets.

The Push for Sovereign AI

Southeast Asia has rapidly become a key battleground in the global competition for AI dominance. A survey by the Carnegie Endowment for International Peace revealed the extent of China's influence, finding that five of the region's specific large-language models (LLMs) were built on open-source technology from Alibaba Group's Qwen.

In response, nations in the region are pursuing sovereign AI—systems developed and operated in alignment with their own national interests and values.

At a digital ministers meeting in Hanoi, Japan's Ministry of Internal Affairs and Communications tabled a broad proposal for cooperation on information technology, with AI as the centerpiece. The plan focuses on four key areas:

• Promoting AI governance

• Joint development projects

• Human resources training

• Using AI to solve social problems

Japanese Communications Minister Yoshimasa Hayashi noted the regional sentiment after meeting with counterparts from Vietnam and Singapore. "A number of countries frankly expressed their concerns and expectations for cooperation with Japan," he said, citing "the importance of AI development that reflects their own languages and cultures, and the need for platforms that do not excessively increase dependence on foreign countries."

A Test Case in Cambodia

A concrete example of this partnership is a new agreement with Cambodia. Before the main meeting, Hayashi and his Cambodian counterpart, Chea Vandeth, signed a joint memorandum to cooperate on an LLM for Khmer, Cambodia's official language.

Cambodia's AI development is still in its early stages, and the country is keen to partner with Japan. The Cambodian government is currently building a Khmer LLM using a Google open-source model but is facing a critical shortage of Khmer-language data needed to train the system effectively.

Japan's government is now exploring how to provide support, which could include assistance with developing training data and providing data processing resources. Tokyo is also considering a project to build a Khmer LLM based on Japanese-developed AI technology.

High Stakes in a Booming Market

The strategic push into Southeast Asia is fueled by massive economic potential. The region's AI market is projected to nearly quadruple from 2024 to reach $17.2 billion by 2033.

Global tech giants are already placing major bets on the region. AI chipmaker Nvidia has announced plans for an R&D facility and data center in Vietnam, while Google is investing $2 billion in Malaysia.

ASEAN itself predicts that AI technologies could boost the region's collective gross domestic product by 10% to 18% by 2030, representing a potential economic impact of up to $1 trillion. This collaboration positions Japan as a key partner in unlocking that value, building on its track record in multilateral AI governance, such as the Hiroshima AI Process established during its G7 presidency in 2023.