SINGAPORE -- Southeast Asian countries are caught in the midst of the growing artificial intelligence rivalry between the U.S. and China. Many have sought to maintain ties with both powers, but concerns are growing that they could be forced to choose sides, with implications for business activities in the region.

The U.S. launched Pax Silica in December 2025, an initiative aimed at building supply chains for AI, semiconductors and critical minerals. More than 20 economies, including Japan and the U.K., have joined the initiative. China, meanwhile, established the World Artificial Intelligence Cooperation Organization (WAICO) in July this year, which has since expanded to having more than 30 members.

Among major Southeast Asian nations, Singapore and the Philippines have joined the U.S.-led bloc. Malaysia, Indonesia, Cambodia and Myanmar were founding members of the China-led group, with Vietnam joining later.

Pax Silica is centered on U.S. allies and seeks to ensure stable supplies of semiconductors, critical minerals and energy resources that are essential for AI development and deployment. WAICO promotes AI governance and the creation of international standards, and has attracted countries from the Global South, including those in Southeast Asia, Latin America and Africa.

Concerns are emerging in Southeast Asia that countries may be forced to take a side in the U.S.-China rivalry. Reuters reported in August, citing an internal draft of a U.S. letter, that Washington was preparing to force countries to pick sides in the AI competition with Beijing.

Singapore is likely to find itself at the center of the issue. Having already joined the U.S.-led bloc, Singapore said on Sept. 9 that it had received an invitation to join the China-led organization as well.

Singapore's Digital Development and Information Minister Josephine Teo, responding to a question in parliament, confirmed China's request, saying the government would decide based on national interests.

"Whether we participate in any particular initiative depends on its objectives, the substantive areas of common interest, how it complements our existing engagements and Singapore's overall interests," she said.

The U.S.-China contest for AI hegemony emerged as one of the main topics of discussion at the Eurasia Group's GZERO Summit Asia in Singapore the following day.

"Actually, most of the pressure is coming from the United States," said Chan Heng Chee, Singapore's ambassador-at-large and a former ambassador to the U.S., acknowledging that pressure to choose between Washington and Beijing does exist.

"In fact, since the Ukraine war, I would say there are very many countries trying to enter what I call the third space," she said. "You don't want to be in the U.S. space or Chinese space."

At the conference, Mari Pangestu, Indonesia's special envoy, added: "Pax Silica recently said, 'If you join Pax Silica, you can't join the other one.' ... But we shouldn't be put in that position." Digital technologies and infrastructure, such as AI, data centers and submarine cables, are no longer merely commercial tools. They have become a new focal point of national security.

As most Southeast Asian nations have pursued balancing diplomacy between the U.S. and China, albeit to varying degrees, experts say they would prefer to avoid seeing that equilibrium collapse.

"ASEAN countries will try to avoid an exclusive choice for as long as possible," Li Mingjiang, an associate professor in international studies at the S. Rajaratnam School of International Studies, told Nikkei.

Li pointed out that the two blocs do not pursue identical objectives and therefore "in principle, they can coexist." But in practice, he said, "geopolitical competition could increasingly turn them into rival ecosystems," adding that the key question is whether membership eventually comes with restrictions on technology, suppliers, data, investment or cooperation with the other framework. Another issue is interoperability.

"If countries can participate in projects associated with both frameworks, competition can remain relatively open," Li said. "If participation becomes mutually exclusive, we will see the beginnings of competing AI blocs." Currently, Kazakhstan is the only country belonging to both groups. The split among Southeast Asian countries could affect whether ASEAN can establish unified standards on AI within its region, even as its members states prepare to launch a digital economy framework agreement The formation of the competing blocs is worrying businesses, too.

An executive at a Japanese company producing semiconductor components in Southeast Asia told Nikkei that it does business with countries in both the U.S. and Chinese blocs. With the possibility of competing AI supply chains taking shape, the executive said his company is "considering how to respond if we are forced to choose."