Policy, regulation and national AI ecosystem strategies

AI Governance & National Strategy

East Asia’s AI ecosystem in early 2026 continues to exemplify a robust convergence of sovereign technological innovation, evolving governance sophistication, and strategic geopolitical positioning, reinforcing its status as a global leader in secure, sovereign, and ethically governed AI development. Recent developments further illuminate the region’s deepening capabilities, market maturation, and the complex interplay of international IP tensions and regulatory evolution shaping its trajectory.

Consolidating Sovereign AI Stack: Renewed Investments, Hardware-Software Synergy, and Edge-Centric OS Innovation

Central to East Asia’s AI strategy remains the principle of compute-stack sovereignty, with new investments and technology breakthroughs consolidating this foundation:

Baidu’s ongoing financial commitment is a testament to the region’s strategic prioritization of applied AI innovation. As reaffirmed in Baidu’s Q4 2025 earnings, the company has poured over 10 billion RMB (~$1.5 billion USD) into AI development since launching the Wenxin large model family, underscoring a pragmatic focus on embedding AI into high-value application scenarios rather than pure model scale.
The hardware-software co-design paradigm continues to accelerate, with recent announcements highlighting chip-level integration of large language models that achieve inference speeds exceeding 17,000 tokens per second. This innovation not only dramatically reduces energy consumption and operational costs compared to traditional GPU-based systems but also enhances sovereignty by relying on domestically designed accelerators.
Momentum behind a “terminal large model operating system” (终端大模型操作系统) has intensified. This edge-focused OS aims to decentralize AI inference, enabling secure, efficient local processing on devices, which both alleviates cloud dependence and strengthens data sovereignty. Such edge AI deployments are critical for industrial IoT, smart city applications, and consumer electronics.
Alibaba Cloud’s expanded “Coding Plan” ecosystem continues to aggregate premium domestic large models under stringent national security and data sovereignty compliance. This ecosystem enhances the trusted local compute infrastructure and supports scalable AI deployments across sectors, reinforcing a vertically integrated, sovereign AI technology stack from chip to cloud to edge.

Domestic Model Leadership, Market Maturation, and Intensifying Geopolitical-IP Frictions

East Asia’s AI model landscape remains vibrant, with notable advancements and market signals alongside ongoing geopolitical and IP disputes:

China’s DeepSeek large model ecosystem retains a leading domestic position, with deployments such as Taisi IoT’s smart space solutions demonstrating practical enhancements in low-latency inference and contextual scene understanding in industrial IoT and consumer domains.
DeepSeek’s selective access policy excludes U.S. chip vendors like NVIDIA, favoring trusted domestic alliances with Huawei and other local manufacturers. This restrictive approach reflects a strategic imperative to safeguard sovereign innovation pipelines amid intensifying U.S.–China technology rivalry.
The intensifying DeepSeek-Anthropic IP dispute has expanded beyond initial allegations to the contentious use of Anthropic’s proprietary “distillation” algorithms. Chinese legal commentators dismiss these claims as lacking legal substance and evidentiary support, framing the dispute as part of a broader politicized conflict over AI intellectual property. The controversy underscores the critical need for internationally enforceable AI IP protection frameworks and transparent audit standards, particularly concerning training data provenance and model originality.
On the market front, the “阶跃星辰计划” (Leap Star Plan) announced plans for a Hong Kong IPO, positioning itself as a potential third major publicly listed AI company in China after Baidu and Alibaba. This move signals growing investor confidence and sector maturity in the domestic AI market.
Complementing DeepSeek’s leadership, the 可灵3.0 (Kling 3.0) series has recently topped the global video-generation large model benchmark with a remarkable Arena ELO score of 1240, securing the number one spot in the text-to-video category and placing seven models in the top 15. The benchmark dominance symbolizes the region’s competitive edge in multi-modal AI capabilities.

Governance and Safety Framework Advancements: Benchmarks, Filings, and Cross-Border Policy Dynamics

Governance innovation has accelerated with a focus on standardization, safety, and transparency:

The bilingual ForesightSafety Bench (前瞻安全基准) has been officially launched, providing a comprehensive AI safety auditing framework that evaluates robustness, ethical compliance, and risk mitigation. Its integration into national model filing and validation processes signals a critical step toward institutionalizing trustworthy AI deployment.
The Ministry of Industry and Information Technology (工信部) has intensified efforts to promote AI adoption across key manufacturing sectors, embedding AI centrally within China’s industrial modernization and supply chain resilience initiatives.
Parallel developments in the West include Anthropic’s Responsible Scaling Policy (RSP) Version 3.0, which introduces more rigorous risk governance measures and signals a shift away from traditional human-in-the-loop safety models. This evolution adds a crucial governance counterpoint and informs ongoing dialogues on harmonizing AI safety standards internationally.
Institutional mechanisms such as the “神威环知” model’s national filing approval and the 鲸智社区·大模型公共服务平台 enhance public accountability and regulatory oversight, fostering a governance-centric AI ecosystem.
Public discourse, exemplified by former Taiwanese Minister of Digital Development Huang Yannnan’s recent commentary (《黑天鹅学院EP278》), underscores the regional emphasis on sovereign AI strategies, digital resilience, and the interplay between national policy and technological innovation.

Infrastructure Scaling and Indigenous Hardware: Intelligent Supercomputing and Domestic Accelerators

Infrastructure remains a cornerstone of East Asia’s AI ambitions:

The latest CNCC report on intelligent supercomputing highlights the deployment of AI-optimized supercomputing clusters tailored for sovereign supply chain control. These systems accelerate training and inference of large models and underpin scientific and industrial AI applications.
Domestic chipmakers and startups are rapidly advancing low-cost, energy-efficient AI accelerators designed for inference workloads, complementing hardware-software co-design efforts and the emerging terminal AI OS.
This integrated infrastructure—from indigenous processors through cloud platforms to edge devices—fortifies the region’s sovereign AI technology stack amid global supply chain uncertainties.

Navigating Geopolitical and IP Challenges: Toward Multilateral Governance and Strategic Sovereignty

Geopolitical tensions and IP issues remain central to East Asia’s AI ecosystem dynamics:

The DeepSeek-Anthropic dispute epitomizes the challenges around cross-border technology transfer, IP ownership, and model originality, highlighting the limits of current international governance frameworks.
The persistent U.S.–China technology rivalry shapes domestic R&D priorities and infrastructure investments, with NVIDIA CEO Jensen Huang’s 2025 remarks on China’s narrowing chip performance gap further galvanizing indigenous development efforts.
Despite geopolitical frictions, East Asian governments and industry actively engage in multilateral efforts aiming to build interoperable AI governance frameworks that balance national security, innovation protection, and openness—reflecting pragmatic recognition of global interdependence.
Commentary from policy experts and former officials stresses the importance of sovereign AI capabilities as a pillar of national security and digital resilience, advocating for strategic investments and governance innovation as essential to sustaining competitive advantage amid uncertainty.

Outlook: Deepening Sovereignty, Governance Innovation, and Regional Expansion

Entering mid-2026, East Asia’s AI ecosystem stands at a critical juncture characterized by:

Deepening domestic AI capabilities, driven by flagship consortia such as the “AI Six Tigers,” innovative enterprises like 明略科技, and expanding regional contributors including Vietnam, which is actively investing in localized language models and startups—signaling a broadening regional AI footprint.
Accelerated industrial AI embedding, supported by state-led policies targeting manufacturing and strategic sectors to drive productivity and supply chain modernization.
Maturing governance frameworks that integrate model filing, safety benchmarking (e.g., ForesightSafety Bench), and public AI service platforms, fostering transparency, accountability, and public trust.
Sustained technological innovation in hardware-software co-design, indigenous processors, and terminal AI operating systems enabling scalable, secure, and sovereign AI deployments.
Managed but persistent geopolitical and IP tensions, driving calls for international AI IP protection standards, audit protocols, and governance harmonization to stabilize cross-border collaboration and competition.

Collectively, these developments reinforce East Asia’s commitment to a resilient, sovereign, and ethically grounded AI ecosystem that balances cutting-edge innovation with national security and public trust. The region is not only poised to compete vigorously on the global AI stage but also to pioneer governance models likely to influence international AI norms for years ahead.

East Asia’s AI landscape in 2026 thus reflects a dynamic synthesis of strategic sovereignty, technological innovation, and institutional evolution, setting global benchmarks for responsible, competitive, and secure AI development amid an increasingly complex geopolitical environment. The ongoing surge in platform consolidation, regulatory sophistication, and hardware advancement signals an ecosystem that is simultaneously consolidating its core strengths and expanding its regional and global influence through a distinctly domestic and sectorally integrated strategy.

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