Asian firms divided on Chinese AI as geopolitics bite

When Kien Ta pitched an AI solution to a Japanese healthcare firm, he suggested they use Qwen. Ta, the vice president of Vietnam-based software firm Rabiloo, thought that Alibaba’s open-source model was the best at Japanese language among the LLMs available.

But the client was quick to say no. They wanted Meta’s Llama instead. Ta never asked for the reason behind the preference, but he surmised they were only being “careful.”

“They are part of the regulated industry after all,” he adds.

As geopolitical tensions between the US and China continue to heat up, some enterprises in Asia are becoming more vigilant about which AI solutions to tap into.

Image credit: Timmy Loen

Since 2017, the US has increasingly challenged China’s development of AI, implementing measures like bans on crucial chips for AI development. Under new rules issued earlier this year, companies with ties to Chinese firms can even lose access to high-end AI chips.

The concern, among other things, is that Chinese laws require local tech firms to cooperate with the government regarding issues of national security, which could then require them to allow authorities to access their stored data.

In Japan, major companies, from SoftBank to Toyota, have banned the use of Chinese LLM DeepSeek inside company premises and have asked employees not to use it on company devices. One Toyota official reportedly said that the automaker had “concerns from an information security standpoint.”

The Chinese government has stressed that it will “never ask any company or individual to collect or store data against laws.”

The pronouncement hasn’t moved the needle much, though.

In fact, the use of Chinese AI has become a sensitive subject in the business community. In the course of reporting for this story, Tech in Asia encountered some enterprises who refused to even talk about their partnerships with AI companies from the country.

Some Asian firms, especially those with the goal of going global, are making sure their tech stacks do not include Chinese LLMs once they enter the US.

“These companies know they will face some level of uncertainty and scrutiny regarding regulation at some point regarding what AI supplier they use,” says James Pang Yan, co-director of the Business Analytics Center of the National University of Singapore (NUS) Business School.

“It will not be immediate, but long-term, the uncertainty and scrutiny will be there.”

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