Singapore Stands Alone as Southeast Asia’s Representative in U.S.’s New AI Alliance, Pax Silica

With its new initiative, Washington has identified its most reliable partners in the AI sector: a group of close U.S. allies, including Australia, the U.K., and Israel.

However, despite the presence of countries like Thailand, Malaysia, and Vietnam, Singapore remains the sole Southeast Asian signatory to the agreement. This decision comes even as ASEAN nations such as Malaysia are actively investing in their own AI industries, including semiconductors and data centers.

Singapore is “precisely the kind of ‘trusted node’ the U.S. is seeking to anchor AI-era supply chains,” according to Ruben Durante, a professor of economics and Provost’s Chair at the National University of Singapore (NUS). Singapore “offers established infrastructure, regulatory credibility, capital markets, logistics, and advanced data center and connectivity infrastructure.”

The nation has a long-standing connection to the chip industry. U.S.-based National Semiconductor established a plant there in 1968, followed by the government’s creation of Chartered Semiconductor Manufacturing in 1987. Singapore now accounts for approximately 10% of global chip production.

More recently, Singapore has been actively working to become an “AI nation,” investing in skill development programs to train its workforce and promoting local AI innovation. The country has also attracted billions of dollars in investments for cloud computing and data centers, including from major technology companies like Amazon and Google.

While the U.S. aims to strengthen its AI supply chain, Singapore could also benefit from its inclusion in Pax Silica, suggests Atreyi Kankanhalli, a computing professor from NUS. Membership in Pax Silica provides the country—which is smaller in land area than New York City—a voice in U.S. discussions regarding joint ventures in chip production and logistics. It also offers the resource-limited city-state a safeguard against future supply disruptions and grants access to the latest AI technologies.

Both the U.S. and China are attempting to leverage their dominance in specific industries against each other.

Washington has prohibited the sale of advanced processors, crucial for training and operating AI models, to China since 2022. Beijing, in response, has imposed export controls on rare earth minerals, a vital component used in semiconductors and magnets within the AI supply chain. (China holds a dominant position in rare earths, supplying a significant portion of the global market.)

“The AI race is often characterized as a competition over data or models, but the primary limitations are increasingly physical—chips, energy, and supply chains,” states Simon Chesterman, a law professor from NUS and the senior director of AI governance at the research institute AI Singapore.

In addition to Singapore, the U.S. has included several close allies in the Pax Silica agreement: Japan, South Korea, Australia, the U.K., and Israel.

Japan, for instance, is a key player in semiconductor manufacturing, according to Durante of NUS. Furthermore, Australia is crucial for critical minerals, the U.K. contributes to standards-setting and intelligence alignment, and Israel offers advanced AI and defense-related innovation.

Experts anticipate that the U.S.’s inner circle for AI will likely expand. Durante from NUS argues that a small founding group will facilitate early coordination on sensitive matters. Several non-signatories, such as the Netherlands and the United Arab Emirates, were involved in the initial discussions for Pax Silica, which Durante views as an “outer ring” of contributors, even if they are not yet fully aligned with the U.S.

“Expansion will hinge on whether Pax Silica establishes concrete mechanisms, such as financing, standards, or procurement coordination,” he notes, adding that countries combining industrial relevance with a willingness to align on economic-security priorities are the most probable candidates for inclusion.

While other Southeast Asian nations could eventually become significant components of the AI supply chain, they still face challenges such as a lack of established infrastructure and a smaller pool of highly skilled talent, explains Anant Shivraj, a managing director and partner at Boston Consulting Group (BCG).

However, this situation could change soon, as Vietnam and Malaysia are striving to become key regional hubs, particularly in semiconductors and data centers.

“Pax Silica’s initial phase is more concentrated on countries capable of anchoring long-term control, governance, and security across the entire AI ecosystem,” says Shivraj. “Many countries play essential roles, and even if they are not yet part of the inner circle, that circle may well expand.”