From Rule-Takers into Agenda-Setters: How Southeast Asia and the Gulf are Quietly Rewriting the Global AI Order

A Global AI Landscape Defined by Fragmentation

The global AI debate follows a familiar storyline: a race between the United States and China to build the most advanced models, dominate supply chains, and shape the rules of technological power. Yet this framing oversimplifies a more subtle, but increasingly consequential, shift. As the world fractures into competing governance blocs, most countries have been relegated to “rule-takers” rather than rule-makers. They adopt standards rather than shape them, and they consume technologies built elsewhere.

Yet Southeast Asia (SEA) and the Gulf are beginning to challenge this dynamic. Neither region produces frontier models or dominates semiconductor supply chains, but their emerging coalition is built on shaping how AI is applied across finance, governance, and society. This burgeoning relationship is not about competing with great powers at the frontier; it is about shaping the applied layer of the global AI economy, where political and economic influence is exercised daily.

Complementary Strengths: Capital, Energy, Markets, and Demand

The Gulf’s AI ambitions are unmistakable. Saudi Arabia’s Project Transcendence - a $100 billion investment in AI start-ups and data centres - aims to build one of the world’s largest AI investment and data-centre ecosystems. The United Arab Emirates has moved faster, committing $148 billion to AI infrastructure within two years, giving it leverage over where global computing infrastructure is built. ‘Stargate UAE’, a 1-gigawatt compute cluster built with OpenAI, Oracle, SoftBank, and Cisco, is set to become one of the world’s most powerful AI hubs. Meanwhile, the UAE’s Jais 2 model is laying the groundwork for a robust Arabic-language AI ecosystem. Add short clauses after each of these stating why they matter for the nation/region.

Southeast Asia (SEA) brings a different kind of power: scale, demand, and digital dynamism. The region’s digital economy is projected to exceed $300 billion in gross merchandise value, and its data centre market is expected to more than double by 2030. While there is a pronounced imbalance in AI development among ASEAN member states - particularly disparities in technological capabilities - the agenda-setting role is concentrated in a few states. Singapore, Thailand, and Malaysia have emerged as ‘front-runner’ ASEAN AI states. On the other hand, despite demonstrating improvements in their global AI rankings, Indonesia, Vietnam, and the Philippines are still playing ‘catch-up’, as they maintain a cautious, prudent stance towards it. 

The region’s overall structural and geographical demand for external technologies, such as data supplies and a reservoir of natural resources and labour, is precisely what makes SEA attractive to Gulf partners seeking markets for deployment, testing, and scaling.

This intersection is where the Gulf-SEA cooperation becomes strategically potent. The Gulf supplies the capital, compute power, and energy that SEA lacks. SEA supplies the markets, regulatory flexibility, and political diversity that the Gulf needs to test and scale AI applications. Together, they form a middle-power coalition capable of shaping the global AI value chain.

Coalitions That Expand Strategic Autonomy

As US-China competition intensifies, both regions are facing growing pressure to align with one or the other. The risks are particularly heightened in cross-strait competition and narrowed diplomatic flexibility for SEA, and the threat of constraining the Gulf’s ambition to become a global technology hub. Gulf-SEA collaboration offers an alternative path. It allows both regions to secure investment, infrastructure, and technology capability without being forced into binary choices. The deals are not diplomatically symbolic; they are strategically building the pipelines through which compute, capital, and technical expertise flow into SEA’s rapidly expanding digital markets.

Since 2024, the UAE’s G42 has signed multiple agreements with Vietnam to expand AI infrastructure, cloud services, and digital-government tools. With the current partnership valued at  $1 billion, Vietnam gains access to compute and capital it cannot produce domestically, while the UAE gains a rapidly growing market of 100 million people with high digital adoption. This partnership exemplifies how SEA’s demand and regulatory flexibility complement Gulf investment capacity.

Malaysia’s national AI roadmap and partnerships with Gulf investors position it as a leading regional hub for applied AI in finance and logistics. Its ‘front-runner’ status stems from its ability to attract external investment while maintaining relatively independent technological capabilities. The Gulf’s capital accelerates Malaysia’s ambitions to establish comprehensive AI systems to promote rapid economic growth without forcing alignment into US or Chinese blocs. Malaysia’s ambition to become a regional AI hub, exemplified by its establishment of a National AI laboratory, creates new opportunities for collaboration with global technology players. Its recent partnership with the UAE-backed Alif Holding, whose expansion in AI research, smart manufacturing, and critical infrastructure creates opportunities for cross-border partnerships - aligns both states’ ambitions, creating a mutually reinforcing pathway where UAE-backed AI infrastructure scales through Malaysia’s fast-growing digital economy.  

Strategic Leverage: How the Coalition Rewrites Power

SEA’s 700 million consumers give it influence over how AI is deployed. Gulf actors need markets to test and scale their systems; SEA provides them. This lets SEA governments negotiate standards, data-governance terms, and localisation requirements that shape global AI norms. The 2026 ASEAN Digital Economy Framework Agreement (DEFA) introduces one of the world’s first multilateral, non-Western digital economy agreements that embeds responsible AI, cross-border data governance, and interoperable safety standards into a binding regional framework. It offers a pragmatic, scalable governance model other regions can adopt - shifting norm-setting away from US-China paradigms towards more inclusive, middle-power-driven standards. 

The Gulf’s ability to rapidly build hyperscale compute clusters - powered by inexpensive energy - gives it bargaining power with global AI developers. SEA governments benefit from access to compute power they cannot produce domestically, while Gulf states gain influence by becoming primary infrastructure providers.

ASEAN’s ‘flexible collaborative model’ alongside the Gulf Cooperation Council’s (GCC) ‘public-oriented model’ of AI governance creates a hybrid governance space that is neither American, European, nor Chinese. It presents a middle-power alternative that could influence global norms.

Conclusion: A New Kind of Power

The Gulf and SEA are not trying to replicate US or Chinese AI ecosystems. They are building something different: a coalition that turns dependency into leverage, prioritises aligning complementary strengths over frontier competition, and recognises that power in the AI era lies not only in building the machine but in shaping how it is used.

In a world where most countries are treated as rule-takers, SEA and the Gulf are quietly becoming agenda-setters - rewriting the global AI order from the middle.