Why Singapore is the only Southeast Asian country in Pax Silica, the U.S.’s new AI ‘inner circle’
Singapore is “precisely the kind of ‘trusted node’ the U.S. is seeking to anchor AI-era supply chains,” says Ruben Durante, a professor at Singapore's NUS.
With its new Pax Silica Declaration, Washington has picked its most trusted partners in the AI sector: An array of close U.S. allies, including Australia, the U.K., and Israel.
Yet despite deepening trade relations between the U.S. and ASEAN nations like Thailand, Malaysia and Vietnam, Singapore remains the agreement’s only Southeast Asian signatory. That decision comes even as ASEAN nations like Malaysia are investing in their own AI industries, like semiconductors and data centers.
Singapore is “precisely the kind of ‘trusted node’ the U.S. is seeking to anchor AI-era supply chains,” says Ruben Durante, a professor of economics and Provost’s Chair at the National University of Singapore (NUS). Singapore “offers strong governance, regulatory credibility, capital markets, logistics, and advanced data center and connectivity infrastructure.”
The country has a long history with chips. U.S.-based National Semiconductor set up a plant there in 1968, followed by the government’s creation of Chartered Semiconductor Manufacturing in 1987. Singapore now accounts for around 10% of all chip production.
More recently, Singapore has strived to become an “AI nation,” investing in skilling programs to train its workforce and encouraging local AI development. The country has also attracted billions of dollars’ worth in cloud computing and data centers, including from Big Tech companies like Amazon and Google.
While the U.S. is trying to shore up its AI supply chain, Singapore might also benefit from being part of Pax Silica, Atreyi Kankanhalli, a computing professor from NUS, suggests. Being part of Pax Silica gives the country—which has less land area than New York City—a seat at the table when the U.S. discusses joint ventures in chip production and logistics. It also gives the resource-poor city-state a safety net to ward off future supply shocks, while enabling access to the latest AI technologies.
Both the U.S. and China are trying to leverage their dominance in particular industries against each other.
Washington has blocked the sale of advanced processors, key to training and running AI models, to China since 2022. Beijing, in turn, has slapped export controls on rare earth minerals, a crucial component used for semiconductors and magnets in the AI supply chain. (China has a stranglehold on rare earths, supplying 90% of the world’s processed rare earths and rare earth magnets.)