Malaysia’s defence ministry is exploring how AI can be used in areas like weapons systems, cybersecurity, and data analysis, with other countries across Asean also pressing ahead.
Indonesia is partnering with Turkey to develop AI-powered drones, while Vietnam’s defence tech arm, Viettel, is integrating AI into radar and electronic warfare systems.
As Asean chair this year, Malaysia has also led digitalisation efforts among small and medium enterprises, allocating RM100 million in grants and RM900 million in loans to promote automation and AI adoption to boost productivity.
However, diplomats and analysts have raised concerns over the over-reliance on AI technology and called for a more balanced and human-centred approach surrounding its governance.
At the 2025 Fortune Asean-GCC Economic Forum, Prime Minister Anwar Ibrahim said Malaysia should not abandon human values when adopting AI, and called for legislation to protect digital sovereignty.
Human-centric approach
European Union ambassador to Malaysia Rafael Daerr told FMT that both Asean and the EU shared the same view: that AI must remain people-centric.
As AI will have far-reaching consequences on the future, he said that it was crucial to find the appropriate balance “between ensuring a form of regulation or governance framework that maintains the maximum space for innovation and to make it as human-centred as possible”.
Analysts have also urged caution in deploying AI in military contexts, especially amid rising tensions in the South China Sea and instability in Myanmar.
Faizal Abdul Rahman, a research fellow at Singapore’s S. Rajaratnam School of International Studies, noted that AI-powered propaganda is already shaping narratives in the South China Sea, describing it as a new front in cognitive warfare.
“AI cognitive warfare would be a tactic that claimant countries need to prepare for,” Faizal said.
However, he said it remains unclear whether Asean nations are willing to accept regulatory limits that could constrain their strategic manoeuvring in the South China Sea, a highly contested body of water where China, through its “nine-dash line”, has asserted sovereignty and maritime claims over a large swathe.
Faizal said negotiations over the Asean-China code of conduct, which have dragged on for over two decades, suggest that there is more pessimism than optimism in resolving the dispute.
Rising AI-powered cybercrime
Besides military applications, AI is also fuelling a rise in sophisticated cross-border cybercrime, particularly scams and fraud driven by generative AI, deepfakes and voice cloning.
A 2023 UN report revealed that cybercriminals in East and Southeast Asia defrauded victims of up to US$37 billion through AI-powered scams.
In an interview with FMT, Dusit Manapan, an adviser to Thailand’s foreign minister, said Myanmar’s political instability brings risks of an increase in crimes such as commercial scams, drug trafficking and weapons trading.
He said the Thai government’s “harsh measures” to hinder these criminal activities along the Myanmar border have only been partly successful, as the perpetrators always found a way to replace what they have lost.
Dusit also said the nation’s aerial surveillance through drones has also been hindered by advanced counter-technology.
“The people over there possess high technology to jam our drones, and I think they have the resources and ability to procure some high-tech equipment. This is a business that makes a lot of money for them,” he said.
The Asean Community Vision 2045, adopted at the 46th Asean Summit last week, incorporates AI as a critical component of the region’s development strategy.
Malaysia will lead the establishment of the Asean AI safety network, to institutionalise regional principles of AI safety, ethics, and governance, positioning the region as a leader in responsible AI development.