Asia struggles with AI policy 'gaps'

Asia's patchwork of Artificial Intelligence (AI) governance poses a potential minefield for companies. According to a report in Nikkei Asia, it is breeding uncertainty for businesses keen to deploy AI solutions throughout the region.

Calls are now mounting for greater cross-border cooperation and alignment on core principles and safeguards so that AI can be fully unleashed across Asia while mitigating privacy, security, and ethical norms risks.

From China to Singapore, governments have hesitated to pursue regionwide rules, opting instead for AI policies tailored to their own national agendas, Nikkei Asia said.

This approach, which stands in contrast to the European Union and its recently approved AI Act, risks creating a minefield for companies.

"Where it becomes problematic is if, say, 15, 20 major countries in Asia start enacting markedly different laws," Adrian Fisher, Asia head of technology, media and telecommunications at British law firm Linklaters, told Nikkei Asia.

"When you're launching a product right then, you've got to understand exactly what you're supposed to do in each country, which is quite difficult."

Professional services company KPMG recently cited "AI governance gaps" as a key risk to business growth in the coming year, despite investment in the field surging more than fivefold from 2013 to 2023.

The East Asia Forum in a recent report said Southeast Asia is projected to reap a considerable economic benefit from using artificial intelligence, estimated to increase the region’s total gross domestic product (GDP) by up to US$950 billion or 13 percent by 2030.

Yet it is imperative to ensure that AI governance does not only benefit a handful of countries but collectively benefits the region, the Forum said.

The region’s AI governance initiatives, from establishing a national strategy to creating an AI governance framework, are primarily led by a small number of countries with more advanced digital economic systems. Singapore has launched 25 governance initiatives, including the National AI Strategy and Model AI Governance Framework.

 Vietnam, Thailand and Indonesia have all launched six, five and one initiatives, respectively. Several other countries are in the initial stages of developing AI, such as Cambodia, which in 2023 issued detailed recommendations on how the government should facilitate and regulate AI.

"Asian countries currently regulate AI as part of their respective nationwide technology legislations, which lack clarity on processes and systems that are specific to AI," Laveena Iyer, an analyst at the Economist Intelligence Unit, told Nikkei.

"China is the only exception, where the government progressed from hurriedly issuing guidelines in 2023 ... to drafting a national AI law that could be released for debate in 2024."

Some governments, however, are wary of scaring off businesses with heavy-handed regulation and missing out on the AI investment rush.

Until recently, Japan has let companies self-regulate based on government guidelines. Now it is considering regulating large domestic and foreign AI developers to limit risks such as the spread of misinformation. The government's AI strategy council started discussions in May on creating a legal framework and is expected to analyze approaches in the U.S. and Europe as part of the process.

In South Korea, the Act on Promotion of AI Industry and Framework for Establishing Trustworthy AI is under review. In contrast to Europe's AI Act, this bill is based on the principle of technology adoption first, and regulation later, according to partners from the law firm Lee and Ko.

Singapore has also shied away from sweeping, EU-style rules, opting instead to issue guidelines for the technology.

In the absence of clear legal frameworks, some businesses have taken it upon themselves to self-regulate. U.S. telecommunications firm Verizon, which in May unveiled AI tools to analyze customer profiles to more accurately serve their needs, has promised "responsible use of AI."

The company, which has a presence in Asian countries including China, South Korea and Singapore, told Nikkei that it wants to work with regional policymakers to set "commonsense laws and regulations."

Priya Mahajan, Verizon's head of public policy for the Asia-Pacific, said countries should consider setting up a single regulatory body for AI to "prevent gaps in regulation ... and avoid duplicative enforcement of AI rules across multiple agencies."

Asia's political and digital diversity make crafting a common AI policy in the region extremely difficult, according to Amita Haylock, technology, media, and telecom partner at law firm Mayer Brown.

"Businesses operating in Asia should prepare themselves to understand and engage with varying and at times competing sets of regulatory frameworks," she said.

EU officials last year toured Asian countries in a bid to convince governments in the region to follow its lead in adopting new AI rules for tech firms that include disclosure of copyrighted and AI-generated content.

In contrast to the EU's AI Act, the ASEAN "AI guide" asks companies to take countries' cultural differences into consideration and doesn’t prescribe unacceptable risk categories, according to the current version reviewed. Like all ASEAN policies, it is voluntary and is meant to guide domestic regulations.

With almost 700 million people and over a thousand ethnic groups and cultures, Southeast Asian countries have widely divergent rules governing censorship, misinformation, public content and hate speech that would likely affect AI regulation.