Conferences for Emerging Markets and Technologies

AI Infrastructure and Regulation: How Asia’s Policy Landscape Is Shaping Investment

Governments across Asia are recalibrating investment frameworks as AI data centers become strategic assets.

4 months ago 2 min read

At the launch of LKYSPP’s ASEAN AI report, Prof. Vu Minh Khuong highlights how next-gen infrastructure and 5G policy are shaping national AI strategies across the region – positioning digital infrastructure as the next frontier of geopolitical alignment.

Artificial intelligence has evolved from a commercial innovation to a geopolitical asset. In Asia, data centers and the computing infrastructure that powers AI models are now treated with the same urgency once reserved for ports, power grids, and telecommunications networks. This shift is prompting governments and investors alike to reevaluate the capital allocation map.

A standout example is the Stargate project – a joint venture between OpenAI, SoftBank, and Oracle. The initiative envisions up to 10 gigawatts of compute capacity, representing over 2 million AI chips and up to $500 billion in projected investment. While based outside Asia, it reflects a global trend: hyperscale computing is becoming part of national industrial policy.

Regional Policy Developments in Southeast and East Asia

Southeast Asian nations are crafting legal frameworks to keep pace. The Philippines has announced plans to propose a region-wide ASEAN AI regulatory framework in 2026, while Vietnam and Thailand are drafting their own national strategies. These developments reflect a push to align innovation with accountability and to create a more predictable environment for infrastructure investment.

In East Asia and South Asia, larger economies are rolling out incentive programs and regulatory support to accelerate domestic AI infrastructure:

Japan is considering a new AI legislative package to support local innovation amid global competition.
India’s IndiaAI Mission will invest approximately $1.2 billion over five years, with a key focus on GPU-driven supercomputing infrastructure for startups and researchers.

Power Supply, Policy, and the Investor Risk Lens

As the energy footprint of AI grows, so does investor scrutiny of power systems and energy security. Deloitte projects that global demand for AI-related compute could rise more than 30-fold by 2035. In response, investors are increasingly “pricing in” a country’s grid stability and renewable energy strategy.

Beyond talent pipelines or software ecosystems, capital allocators are now examining:

Whether a country has sufficient energy infrastructure to support hyperscale AI projects.
How governments are regulating data flows, localization, and cybersecurity.
The level of exposure to geopolitical or supply chain disruptions.

These factors are changing how and where capital is deployed. Nations that can offer regulatory clarity, energy reliability, and strategic alignment are becoming more attractive destinations for long-term infrastructure plays.

These themes will be front and center at the AI Week Asia 2025 Investor Day in Manila, where industry leaders, investors, and policymakers will convene to explore the intersection of AI, energy, and industrial policy across Asia.