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View all search resultsASEAN firms can’t afford to ignore EU’s AI Act
Brussels’ landmark AI ruling has a global reach. For ASEAN businesses, early compliance is the key to turning regulation into advantage.
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A message reading “AI artificial intelligence“, a keyboard and robot hands are seen in this illustration taken on Jan. 27. (Reuters/Dado Ruvic)
T
he European Union is racing to regulate artificial intelligence but its flagship law, the EU Artificial Intelligence Act (AI Act) faces delays and industry resistance. For ASEAN businesses, this is not just a distant Brussels story. Like the GDPR, the Act has extraterritorial reach.
Exporters of smart electronics, automotive parts, healthcare diagnostics or AI-driven services across Asia will soon face strict European rules.
Enforcement begins in 2025, phasing in through 2027, and can impose penalties worth up to 7 percent of a firm’s global turnover. The question for ASEAN firms is therefore not whether these rules will matter, but rather how quickly will firms can turn their compliance into a source of competitiveness.
At the heart of the EU AI Act lies two, near contradictory, goals: Europe wants to lead the world in AI regulation, while maintaining its position in the global innovation race. Penta’s recent survey of 1,500 senior policymakers across the EU and the United States reveals that over 46 percent of EU officials rank AI among their top three regulatory priorities.
Industry leaders are uneasy. More than 40 CEOs from Europe’s largest companies, including ASML and Siemens, have urged a two-year ‘clock stop’ on enforcement, warning that overlapping provisions and heavy obligations could stifle the very innovation that Europe needs to remain competitive globally.
Competitiveness has become the defining political priority in Brussels. Calls to simplify regulation have persisted for years, but AI’s rapid acceleration has raised the stakes. The AI Act, once a seminal framework, now risks being outpaced by technology itself.
For businesses in Asia, this tension creates uncertainty. However, there is also an opening. Firms that adapt early by auditing AI systems, embedding ethics into AI design and demonstrating transparency will stand out in markets where trust is increasingly the currency of choice.
