Business confidence has fallen sharply to its lowest point this year, according to the Institute of Directors

Ministers must focus on delivery rather than “changes in the machinery of government” if business confidence is to be restored, one of Britain’s most influential lobby groups has warned, in a direct message to Andy Burnham as he readies himself to overhaul Whitehall and devolve power to the North of England.

In its monthly business confidence survey, the Institute of Directors revealed that economic sentiment among bosses fell sharply this month. The reading for optimism on the UK economy over the next 12 months dropped to -61 from -53 in May.

Company directors were equally downbeat about their own firms’ prospects and future sales, with revenue expectations sliding to their lowest point this year.

Economists have noted that businesses are still feeling the aftershocks of the collapse in trade across the Strait of Hormuz, the vital Middle Eastern chokepoint that was shut off as a result of the Iran war.

Bank of England analysis has indicated that the impact on consumer demand and the surge in input costs could leave businesses grappling with inflation and sluggish growth for the remainder of the year.

Anna Leach, chief economist at the IoD, said disruption and uncertainty were “becoming normalised” for 80 per cent of companies, and called on ministers to simplify the tax system and reduce regulatory costs in order to ease the pressure on firms.

“As well as easing back on investment and hiring, this is pushing businesses to prioritise resilience over expansion, maintain higher reserves, reduce discretionary spend, diversify their supply chains and enhance their risk management,” Leach said, as reported by City AM.

“While there is a logic to changes in the machinery of government, what matters is delivery on the ground. Businesses need to see meaningful improvements in areas like regulatory cost, tax complexity and swiftness and consistency of government decisions to fundamentally unlock spending and get growth going.”

The IoD’s remarks serve as a cautionary note to Burnham following his announcement of plans to establish a Number 10 in the North and shift power away from London.

According to the survey, cost expectations remained stable despite a sharp drop in oil and gas prices earlier this month, triggered by the announcement of a draft peace deal between the US and Iran. It had been hoped the agreement might ease price pressures and keep inflation in check.

Some 43 per cent of business leaders surveyed said supply shortages could affect their operations, with firms remaining apprehensive about disruptions stemming from the breakdown of trade across the Middle East.

Fuel shortages emerged as the greatest risk facing businesses, with a larger share of directors flagging concerns about the impact compared to April, according to the IoD, which represents thousands of senior executives across Britain.

The IoD’s findings broadly mirrored those of Lloyds Banking’s business barometer, which similarly indicated a drop in confidence levels.

International businesses that participated in Lloyds’ survey were notably more upbeat about growth prospects, according to researchers, as their outlook on the wider economy improved.

Confidence among businesses was strongest in London and the East Midlands, according to the bank, whose survey encompasses companies with an annual turnover exceeding £250,000.

NEW YORK — The Nasdaq Composite Index climbed 64.59 points, or 0.25%, to close at 25,884.73 on Tuesday, extending a modest rebound amid ongoing investor rotation and selective buying in technology shares.

The modest gain came as broader markets displayed caution following recent volatility. Major averages ended mixed, with technology-heavy benchmarks showing relative strength while other sectors faced pressure from economic data and corporate developments. The performance underscored continued investor focus on artificial intelligence-related stocks and big technology names even as concerns about valuations lingered.

Trading volume remained elevated as participants assessed the Federal Reserve’s latest signals on interest rates and digested a steady stream of corporate earnings. The session reflected a market environment where selective optimism in growth sectors offset broader uncertainty.

Technology shares led the Nasdaq’s advance, with several major companies posting gains on bargain hunting after recent pullbacks. Chipmakers and software firms contributed to the index’s upward move, though gains were tempered by losses in other areas. The Philadelphia Semiconductor Index participated in the modest recovery, though it trailed stronger performances seen in prior sessions.

The S&P 500 and Dow Jones Industrial Average showed varied results, highlighting sector rotation at play. Defensive sectors and value-oriented stocks drew interest as investors balanced growth exposure with more stable holdings. Market breadth remained neutral, with advancing and declining issues roughly balanced on major exchanges.

Analysts noted that the Nasdaq’s small advance capped a period of consolidation. The index has navigated fluctuating sentiment around monetary policy expectations and geopolitical developments. Tuesday’s close left the Nasdaq below recent peaks but demonstrated resilience amid crosscurrents.

Federal Reserve officials have continued to emphasize data-dependent decisions on rates. Recent economic indicators, including inflation readings and employment figures, have kept markets attuned to the possibility of policy adjustments later in the year. Bond yields moved modestly, influencing equity valuations particularly in rate-sensitive sectors.

Corporate earnings provided additional context. Several technology firms reported results that met or exceeded expectations, supporting share prices in the sector. However, caution prevailed regarding forward guidance amid economic uncertainties.

The broader market context included ongoing discussions around fiscal policy and global trade. Investors monitored developments in international relations and their potential economic spillover effects. Energy prices and commodity trends also factored into sentiment, with oil prices influencing related equities.

Smaller companies in the Russell 2000 index showed mixed performance, reflecting divergent outlooks for domestic-focused businesses. While some segments benefited from economic resilience, others faced headwinds from higher borrowing costs and consumer spending patterns.

Market participants pointed to artificial intelligence as a continuing theme. Companies positioned in AI infrastructure, semiconductors and cloud computing attracted attention. Yet valuation concerns and profit-taking created volatility within the group.

Tuesday’s trading unfolded against a backdrop of seasonal factors. The end of the quarter often brings rebalancing activity from institutional investors, contributing to volume and price swings. The Nasdaq’s closing cross and related activity highlighted sustained interest in technology names.

Looking ahead, investors await further economic data, including employment reports and inflation metrics. These releases will shape expectations for Federal Reserve actions and influence asset allocation decisions across equities, bonds and other classes.

The technology sector’s outperformance in recent years has been driven by innovation and strong earnings growth. However, periods of consolidation have become common as the market digests rapid gains. The Nasdaq’s 0.25% advance on Tuesday fit this pattern of measured recovery.

Broader participation could support further upside if economic conditions remain favorable. Conversely, persistent inflation or slower growth might prompt shifts toward defensive assets. Professional investors continue to stress diversification and risk management in the current environment.

Trading activity reflected a balance between optimism around technological progress and prudence regarding macroeconomic risks. Large-cap technology names anchored the Nasdaq’s performance, while mid- and small-cap stocks offered varied results.

Global markets provided mixed cues, with European and Asian indexes showing selective gains. Currency movements and commodity prices added layers to the analysis for multinational companies listed on the Nasdaq.

The session’s modest gain left the Nasdaq Composite with solid year-to-date performance, though below peak levels reached earlier. Long-term investors have benefited from the index’s historical upward trajectory, powered by innovation-driven companies.

Market strategists emphasize monitoring key technical levels and corporate fundamentals. Support and resistance points on the Nasdaq will be watched closely in coming sessions as traders position for potential catalysts.

Economic resilience in the United States has supported corporate profitability, particularly in technology. However, challenges such as labor market dynamics and geopolitical tensions remain in focus.

Tuesday’s close at 25,884.73 marked a incremental step in the Nasdaq’s ongoing journey. While not dramatic, the positive finish contributed to sentiment as markets prepare for upcoming events.

Analysts will continue parsing earnings reports and guidance for clues about second-half performance. Guidance from major firms often sets the tone for sector expectations and broader market direction.

The technology sector’s weight in the Nasdaq means its performance disproportionately influences the index. Gains in key constituents helped offset weakness elsewhere, producing the net positive result.

Investor sentiment indicators showed a cautious tilt, with some measures of fear receding after recent volatility. Options activity and volatility indexes provided additional insight into market psychology.

As the trading day concluded, attention shifted to after-hours developments and overnight news flow. Global events and corporate announcements could influence Wednesday’s open.

The Nasdaq’s role as a barometer for growth stocks remains central to market narratives. Its daily movements often signal broader appetite for risk and innovation exposure.

In summary, Tuesday’s session exemplified the market’s nuanced environment. The Nasdaq’s modest gain reflected selective buying amid broader caution, setting the stage for continued monitoring of economic data and corporate results.

This incremental advance contributes to the index’s longer-term story of adaptation and growth amid evolving economic conditions. Market participants will remain attuned to signals that could influence future direction.

Story Homes says outcome paves way for ‘transformation’ of abandoned attraction

Controversial plans to build 350 homes on the former Camelot Theme Park site in Chorley have been given the go-ahead – 12 years after the first bid was made to redevelop the derelict site.

A government-appointed planning inspector approved the Story Homes scheme after chairing a public inquiry into the proposal earlier this month.

Andrew McGlone concluded that the development “would not be inappropriate” for its greenbelt location – judging that the Charnock Richard plot fell within a so-called ‘grey belt’ area.

However, his decision has prompted fury from local politicians who have branded it “utter nonsense” and “grotesque” – and warned that it will cause chaos on the roads.

Story Homes, meanwhile, said the outcome paved the way for “the transformation” of the abandoned attraction – which closed down in 2012, after 29 years in operation. The firm said the development would deliver “much-needed homes” – half of which will be discounted ‘affordable’ properties – along with almost £5m of financial contributions towards improving local infrastructure and services.

The housebuilder had twice been refused permission by Chorley Council for other visions for the site in 2014 and 2018, when it had put forward proposals for 420 and 195 homes respectively – the latter accompanied by office and workshop units.

It submitted a third blueprint for the former attraction last June. However, Chorley Council did not reach a decision on the proposal within the nationally-set 13-week time limit for doing so, blaming Lancashire County Council for a delay in providing highways advice. The hold-up meant Story Homes was able to appeal to the Planning Inspectorate to determine the application instead.

By the time the resultant three-day inquiry began, the county council had withdrawn an earlier objection it had to the scheme on road safety grounds.

Against that backdrop, Chorley Council told the hearing that it would have granted permission for the 25-hectare development – describing County Hall’s highways concerns as “the only outstanding issue”.

Nevertheless, the inspector still had to make a full assessment of the application – which includes a new community hub building – but it was left to Story Homes’ legal representative and expert witnesses to make the case for the development uncontested.

The firm set out a raft of arguments for why its proposal should be approved – with the plot’s greenbelt status being one of the main matters addressed during the inquiry.

However, as part of the consideration given to that issue, the inspector also had to judge whether the location was – or could be made – ‘sustainable’. That meant ensuring a “genuine choice” of transport options would be on offer in order to prevent new residents having to rely on cars to access key services.

It was Mr McGlone’s conclusions on that subject that have drawn particular anger from politicians representing the area.

In a report outlining the reasons for his approval of the scheme, the inspector acknowledged that the site was currently “not currently sustainable” – for reasons including the distance between the proposed development and essential facilities, the frequency of bus services in the area and the speed of vehicles on Park Hall Road and the width of its footpath, which would make both cycling and walking unattractive.

However, Mr. McGlone found that those issues could be addressed by the package of mitigation measures proposed as part of the development. They include a road safety upgrade on Park Hall Road to reduce traffic speed; improvements to the junctions of Park Hall Road and Wood Lane, and Preston Road and Mill Lane; cutting back vegetation along the full length of Park Hall Road to widen the footpath; and investment in boosting public rights of way.

However, he said “further thought” was needed over the bend where Mill Lane meets Park Hall Road so that vehicle speeds are reduced sufficiently.

A bus interchange will also be created within the estate and a financial contribution will be made by the developer to extend the start and end times of bus services and their regularity.

Mr. McGlone concluded that the overall package of enhancements would make the site sustainable, although he recognised that journeys by “non-sustainable” means would still occur.

However, veteran councillor Alan Whittaker, who represents the Eccleston, Heskin and Charnock Richard ward on Chorley Council, excoriated the decision.

Speaking to the Local Democracy Reporting Service (LDRS), he said residents – more than 200 of whom submitted objections to the Planning Inspectorate as part pf the appeal process – were “steaming” over the approval of the plans.

“We’re talking about 350 houses – meaning maybe 600 cars – [so] all the villages to the west of this site will be gridlocked within two years,

“The only justification is that they’re going to put some [extra] bus services on. But the ultimate ridiculousness is that they will also put parking for bicycles in Coppull and Eccleston.

“Do they think that people are going to use bikes to ride a couple of miles to get to the services they need? It’s absolutely ludicrous – and a grotesque decision.

“Also, all the schools in Charnock Richard, Heskin and Eccleston are full – so the children are going to have to go somewhere else. Are their parents going to take them on a bike? Of course not, they’ll go in their cars,” said Cllr Whittaker, who, along with fellow ward councillor Arjun Singh, spoke in opposition to the planned estate at the hearing.

Meanwhile, South Ribble MP Paul Foster – whose constituency covers the former theme park plot and who also made a submission to the inquiry calling for the proposal to be dismissed – added his voice to the condemnation of the outcome of the appeal.

‘I’m obviously hugely disappointed in the inspector’s decision, as he clearly states the development as presented isn’t sustainable.

“It genuinely appears to me [that he] has rushed this appeal and decided because, in his view, it’s grey belt, it passes the test. I’m genuinely all for planning reform – and I’m pro-development, as many [people will] know – but [only] the right development in the right place.

“The planning inspector has stated, in his view, the development doesn’t pass the sustainability criteria [and that] there are outstanding highway issues – but crack on and live with it. I will be seeking a ministerial meeting and request[ing] a formal review. This is utter nonsense,” Mr. Foster told the LDRS.

The planning permission granted by the inspector is in outline form, meaning the finer details of the development will still have to be brought before Chorley Council for so-called ‘reserved matters’ approval. These will include the arrangements for the road that will be used to access the second of the two parcels of the estate, which was one of the main concerns of Lancashire County Council highways chiefs because it runs alongside a body of water en route to the existing Park Hall Hotel.

Story Homes has indicated that work will start on the site no later than September 2027.

Debate over greenbelt policy

The planning inquiry heard three arguments from Story Homes as to why its housing proposal did not conflict with greenbelt policy.

Significant development on greenbelt land is usually prohibited – unless a limited number of permitted exceptions or ‘very special circumstances’ are deemed to apply.

The housebuilder put forward its trio of cases in order, meaning that only if the first was judged unsound by the inspector did he have to consider the second – and only if that was ruled out was he required to assess the third.

The initial strand of the argument was that the proposal fulfilled four criteria laid down in national planning policy which dictate greenbelt development should not be regarded as inappropriate when each of them is met – and Andrew McGlone found that they were, meaning he had no other greenbelt issues to consider.

First, he judged that the scheme would utilise grey belt land which “would not fundamentally undermine the purposes of the remaining greenbelt” across the rest of the district. In doing so, he concluded, amongst other things, that the site was not needed to prevent the “unrestricted sprawl of large built-up areas”; nor to prevent neighbouring towns merging into one another – because Heskin, Eccleston, Charnock Richard and Coppull are all villages.

He noted that the site was not next to a large built-up area – and is “well contained either by road infrastructure or natural features such as ancient woodland”, which would be maintained..

Second, he accepted that the development fulfilled a “demonstrable unmet need” – because Chorley Council is currently able to show that it has only 3.4 years’ worth of land available to meet its new housing requirements, rather than the five required by the government.

Thirdly, because of the highway and public transport upgrades proposed, he concluded that the development could be made sustainable.

Finally, in pledging to offer 50 percent of the properties as ‘affordable homes’, committing to local infrastructure improvements and creating new areas of publicly accessible open space, the application met the so-called ‘golden rules’ introduced by recent changes in planning legislation.

Mr. McGlone also concluded that the proposal chimed with Chorley’s own local planning policy allowing the redevelopment of previously-developed greenbelt sites – provided their appearance is either “maintained or enhanced”.

Builder says development ‘will leave a lasting legacy’

In response to the Planning Inspectorate decision, Story Homes highlighted that its scheme for the Camelot site would generate £3m in what is a compulsory ‘community infrastructure levy’ payment to create or enhance the facilities needed to support the development.

A further £1.85m will be handed over to make good on specific conditions attached to the planning approval, including the highways improvements.

Adam Galleymore, North West Operations Director at Story Homes, said the granting of permission “represents a major milestone in bringing forward the regeneration of a well-known brownfield site that has remained derelict for many years”.

He added: “The approved scheme will deliver a wide range of benefits for the local area, including much-needed new homes, a significant proportion of affordable housing, new community facilities, environmental enhancements and investment in local infrastructure. We are committed to creating a high-quality development that will leave a positive and lasting legacy for Charnock Richard and the wider Chorley area.”

The firm says the construction phase of the development will support around 240 jobs and, once complete, the new households will boost spending in the area by £12.3m.

What’s on the way?

A mix of detached, semi-detached and mews houses are planned, along with apartments. The properties will range in size from one to six bedrooms. – with four-bed dwellings accounting for the largest tranche of the site, at 30 percent.

Story Homes is also promising:

• A new community hub providing a flexible space for use by community groups, remote workers and other users for a range of events and meetings;
• Around 50 percent of the site area will be left as open space;
• A network of walking and cycling routes through that open space on land that has previously been largely inaccessible to the public;
• Retention of existing trees where possible, enhanced by additional planting;
• Play facilities for young people in the new neighbourhood and the wider community;
• Space for a coffee van or food truck, cycle parking and repair stand and parcel delivery lockers as part of the travel interchange;
• A sustainable development, with the potential for all homes to be provided with solar cells and air source heat pumps, in addition to electric vehicle charging infrastructure and very high levels of insulation and energy efficiency.

PARIS — Shares of French biotechnology company Abivax surged Tuesday after fresh clinical trial data eased investor concerns about potential cancer risks tied to the company’s experimental ulcerative colitis treatment, clawing back the bulk of a steep selloff that had hammered the stock earlier this month.

The U.S.-listed stock climbed $32.81, or 34.12%, to $128.96 as of 9:47 a.m. EDT. In Paris, where Abivax is headquartered and primarily listed, shares were trading up roughly 36% at €113.30, after earlier touching gains as high as 36% intraday, according to multiple market trackers. The rally extends a recovery that began Monday evening, when U.S.-listed shares jumped 26.4% to 28% in extended trading immediately following the data release.

Tuesday’s surge comes almost exactly four weeks after Abivax shares collapsed by as much as 44% on June 2, when an earlier readout from the same trial identified seven distinct cancer diagnoses among patients taking the highest dose of the company’s lead drug, obefazimod. While investigators at the time assessed none of those cases as likely connected to the drug itself, the disclosure was enough to rattle markets and trigger one of the steepest single-session declines the stock had experienced.

The newly released data, covering the second part of Abivax’s Phase 3 ABTECT maintenance trial, gave investors a considerably larger and more reassuring safety picture. The expanded, combined safety database from the company’s Phase 2 and Phase 3 programs now spans the equivalent of 1,704 patient-years of drug exposure. Within that larger dataset, malignancies excluding non-melanoma skin cancer occurred at a rate of 0.35 events per 100 patient-years across all active treatment doses combined, falling squarely within the company’s expected background range of 0.30 to 0.70 cases typically seen in ulcerative colitis patients generally. Four cases of non-melanoma skin cancer were reported in the latest data, split evenly between the two dose arms, with all four occurring in patients who carried established risk factors such as older age, prior use of thiopurine medications, or a personal history of skin cancer. Two additional non-skin malignancies were reported in the higher 50-milligram dose group and were deemed unrelated to the drug.

Beyond the safety data, the update also offered encouraging efficacy results for patients who had struggled to respond to earlier treatment. Among patients who failed to respond during the trial’s initial induction phase, 37.2% achieved clinical remission and 34.5% reached endoscopic remission after 44 weeks of continued treatment on the 50-milligram dose of obefazimod. Among patients whose disease had relapsed after initially responding to a lower 25-milligram dose, escalating treatment to the 50-milligram dose helped restore clinical remission in 45.5% of cases.

Abivax Chief Executive Marc de Garidel described the results as a significant milestone for the drug’s development, characterizing the expanded dataset as substantially strengthening the company’s long-term safety database. Remo Panaccione, a professor of medicine and director of the Inflammatory Bowel Disease Clinic at the University of Calgary, offered an outside clinical perspective on the malignancy figures, noting that the observed rates were consistent with expected background rates for the patient population being studied.

Wall Street’s reaction to the update was broadly favorable. Piper Sandler said the results should help put to rest concerns that obefazimod could cause tumors, while analysts at Jefferies called the update supportive, though they cautioned that some generalist investors, as opposed to specialists and physicians closer to the data, might remain hesitant to fully embrace the stock given the lingering cancer signal and the company’s ongoing funding needs. Stifel maintained its buy rating and €115 price target on the stock, while Oddo BHF kept its outperform rating and €120 target, noting that while the new analyses did not constitute definitive proof of an absence of risk, they offered meaningfully more reassurance than the company’s earlier maintenance data readout. Several other firms, including Citizens, Barclays, Guggenheim, Truist and Morgan Stanley, have maintained buy or overweight ratings on the stock throughout the recent volatility.

Abivax confirmed it remains on track to submit a New Drug Application to the U.S. Food and Drug Administration for obefazimod in the fourth quarter of 2026, with a potential commercial launch widely expected in 2027 if the filing is approved. The company is also evaluating obefazimod as a potential treatment for Crohn’s disease, a related and similarly difficult-to-treat form of inflammatory bowel disease, with results from a mid-stage Phase 2b trial expected around mid-2027. Analysts have continued to describe obefazimod as a potential best-in-class treatment within the broader inflammatory bowel disease category, a market collectively worth billions of dollars annually.

The stock’s dramatic swings over the past month reflect both the high-stakes nature of single-asset clinical-stage biotech investing and the considerable run Abivax has had over the past year more broadly. Shares gained nearly 1,700% during 2025, pushing the company’s market capitalization to roughly €8 billion even after accounting for this month’s volatility. Heading into Tuesday’s session, shares had been down about 14% year-to-date, a deficit that has now narrowed to roughly 6% following the rally. Abivax has also long been viewed by market watchers as a potential acquisition target, with persistent, unverified speculation that one or more major pharmaceutical companies have considered a takeover of the Paris-based biotech, a dynamic that some investors said factored into Tuesday’s enthusiastic reaction alongside the underlying clinical data itself.

Tuesday’s rally also came against a generally constructive backdrop for European equities, with the pan-European Stoxx 600 index on track for its strongest quarterly performance since October 2020, and Abivax’s home index, the CAC 40, trading modestly higher on the day. Even so, market commentators were careful to note that the scale of Abivax’s single-session move was driven overwhelmingly by company-specific news rather than broader market tailwinds, underscoring just how heavily clinical-stage biotech valuations can swing on individual trial readouts, in either direction, for a company whose fortunes remain closely tied to the fate of a single experimental drug.

Asia Society Policy Institute calls for shared metrics as fragmented national strategies risk deepening regional inequalities and stalling adoption

A sweeping new analysis of artificial intelligence governance across 15 Asian countries has found that while nearly every nation in the region invokes “trust” as central to its AI strategy, none has a reliable or consistent way to measure it, a gap that experts warn could undermine the continent’s ambitions as it races to harness AI for economic growth.

The report, published by the Asia Society Policy Institute (ASPI), proposes nine measurable factors, or metrics, for what it terms “trusted AI ecosystems,” covering everything from data quality and compute infrastructure to misinformation governance and environmental sustainability. Its findings draw on policy analysis and two roundtable discussions held on the sidelines of the 2026 AI Impact Summit in New Delhi, involving experts from Australia, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Sri Lanka, the United Arab Emirates, and the United States.

A Race with High Stakes

The economic stakes behind the region’s AI push are considerable. UNESCO’s AI readiness assessments project suggests that widespread adoption could add up to USD 1.9 trillion to India’s GDP by 2035 and USD 113.4 billion to Malaysia’s economy by 2030. Indonesia’s national strategy frames AI adoption as the path to developed-country status by 2045.

Yet the report finds that this urgency is running ahead of governance. Regulatory frameworks across Asia remain calibrated largely around model-level risks, even as AI development has moved toward agentic systems, autonomous agents that access, combine, and act on data across jurisdictions. The report’s authors warn that governance frameworks unable to measure trust in static deployments are “even less equipped to track it across dynamic, multi-actor agentic architectures.”

Nine Factors, One Framework

ASPI’s proposed framework breaks trust down into nine domains:

1. Trusted datasets. Many Asian nations acknowledge the importance of open government data, but few have addressed whether that data is actually ready for AI training, properly labeled, structured, interoperable, and representative of diverse populations. The report identifies a three-layer trust problem: trust between government ministries (a challenge Indonesia candidly calls “ego-sectoral” attitudes), trust between the state and citizens regarding data collection and consent, and the technical coherence of the data itself. India’s AI Kosh initiative and Singapore’s “data concierge” mechanism are cited as early models, though the report notes that most countries hold ambitions that “far outpace tangible progress.”
2. AI infrastructure. Nations across Asia are building data centers and expanding cloud services, but geopolitical tensions, particularly between the United States and China, have intensified concern about dependence on foreign providers. Smaller economies like Bhutan and Nepal are positioning their renewable energy resources as a potential competitive edge in hosting energy-efficient infrastructure, while countries such as Indonesia and Sri Lanka continue to face foundational shortfalls in domestic computing capacity.
3. AI skills and awareness. The report draws a sharp distinction between the challenge of developing frontier technical talent, where South Korea and Taiwan are investing in semiconductor expertise and AI chip programs, and the broader challenge of preparing low-skill workforces in populous economies like Bangladesh and the Philippines for automation-driven disruption. Across the region, reskilling ambitions are common, but concrete curricula and measurable targets are rare. The roundtables recommended creating an Asia AI Knowledge Facility to pool process knowledge and enable peer learning.
4. Global AI value chain leverage. Most of Asia remains downstream in the global AI supply chain, dependent on hardware and compute it does not control. China’s dominance in processing rare earth minerals gives it structural leverage over every other nation’s AI ambitions. Indonesia’s experience as the world’s leading nickel producer offers a cautionary note: despite pursuing downstream processing, Chinese firms still control roughly 75% of refining capacity. The report argues that trust in Asia’s AI ecosystem depends partly on “managed interdependence, not pure self-sufficiency.”
5. Ethical AI development. Across the region, ethics guidelines are common; enforceable ethics law is rare. Japan’s flagship AI legislation takes a soft-law, voluntary compliance approach. South Korea stands out with its AI Framework Act, which includes penalties for breaches and an AI ethics committee, though it has drawn criticism from start-ups who say it favors foreign firms. Singapore has built a layered system of sector-specific guidelines across finance, healthcare, and generative AI. Several countries, including Indonesia and Brunei, ground their ethical frameworks in national philosophies or religious principles rather than imported international standards.
6. Misinformation governance. China has enacted the region’s most operationalized response with a 2025 law mandating both implicit and explicit labeling of AI-generated content. South Korea’s Framework Act includes fines for non-compliance with content labeling requirements. The Philippines adopted sector-specific rules during its 2025 elections, requiring disclosure of AI-generated campaign materials. The report notes, however, that some governments may have incentives to exploit AI-enabled misinformation rather than combat it, framing the issue as “a public health problem with a range of responses.”
7. AI governance frameworks and institutions. The region broadly favors “pro-innovation, pro-safety” governance, principle-based, risk-tiered, and sector-sensitive, over sweeping punitive regulation. But institutional capacity varies enormously. Malaysia’s governance has been fragmented across multiple ministries; the country recently created a National AI Office to coordinate efforts. The report calls for “iterative governance” with clear roles for developers, deployers, users, and regulators, and urges that AI governance be reframed around the full lifecycle of agentic AI systems, including post-deployment monitoring.
8. Environmental sustainability. AI’s environmental footprint is growing rapidly. International Energy Agency data cited in the report estimates that data center electricity consumption represented approximately 1.5% of global electricity use in 2024, a figure projected to reach 4.4% by 2035. The report finds that most Asian national strategies treat this challenge as peripheral. Bhutan’s 2025 National AI Strategy is highlighted as an exception for explicitly naming environmental concerns. A coordinated systems approach proposed at the AI Impact Summit calls for energy proportionality, infrastructure assessed against environmental criteria, carbon transparency frameworks, and standardized cross-border metrics.
9. Cybersecurity. Threats range from AI-driven financial crime and phishing (a priority for Singapore, Thailand, and Bangladesh) to vulnerabilities in critical information infrastructure in less-developed digital economies. The report warns that governance discourse has been disproportionately focused on generative AI misuse, synthetic content, and deepfakes, while neglecting model security, data integrity, supply chain vulnerabilities, and systemic resilience. One roundtable speaker described an attempt by a commercial entity to replicate a large language model through systematic prompt injection, illustrating how adversarial AI behavior now extends well beyond nation-states and criminal groups.

A Call for Regional Coordination

A central argument running through the report is that Asian countries are largely pursuing “sovereign” AI strategies in isolation, competing for investors rather than pooling resources, and often replicating, rather than reducing, their dependencies on external players.

The report does not argue that national differences should be erased. Rather, it calls for a common analytical foundation: baseline interoperable principles on safety, accountability, and transparency; mutual recognition pathways for audits and incident response; cross-border data-sharing arrangements; and regular regulator-to-regulator cooperation.

Roundtable participants also recommended that rather than constructing new trust indices, policymakers should extract trust-relevant components from existing governance, digital readiness, and cybersecurity indices that are already being collected, but not yet being used to systematically assess trust.

“Trust cannot be generated in isolation,” the report concludes, “particularly in economies deeply embedded in global markets and technology dependencies.” Without shared metrics, cross-country comparisons remain abstract, and effective practices continue to be shared on an ad hoc basis, leaving one of the world’s most consequential technology transitions without a common map.

Other People are Reading