Vietnam's New AI Law: A Bold Step with Significant Challenges

In March 2026, Vietnam implemented its AI law (Law 134/2025/QH15), marking a significant move in the Southeast Asian technology landscape. This state-led initiative aims to bolster control over data flows, enhance transparency, and address risks associated with artificial intelligence (AI). Analysts note that this law sets a precedent in a region where many countries have relied on voluntary compliance for AI governance, as seen in ASEAN's previous soft-law approach.

“Analysts note that this law sets a precedent in a region where many countries have relied on voluntary compliance for AI governance.”Analysts at The Diplomat

Vietnam's AI law introduces a three-tier risk classification system, categorizing AI activities into high, medium, and low-risk levels, with corresponding regulatory measures. The Vietnamese government has emphasized the importance of balancing regulation and innovation, allowing tech developers to test AI models during a trial phase without facing immediate penalties. However, the law's implementation has raised concerns about its alignment with broader regional frameworks, particularly ASEAN's Guide on AI Governance and Ethics, which promotes principles such as transparency and accountability.

Despite its ambitious goals, the law has notable shortcomings. Critics argue that it overlooks critical socio-economic and environmental implications. For instance, the World Economic Forum highlights that a standard data center can use approximately 25.5 million liters of water annually—equivalent to the daily water needs of 300,000 residents in Vietnam. This raises alarms about the sustainability of resource allocation in a country already vulnerable to climate change.

“The law does not provide social protections for workers displaced by AI technology.”The Diplomat

Moreover, the law does not adequately address the social protections needed for workers displaced by AI technologies. Reports indicate that workers in gig economies across Asia have protested against companies leveraging AI to tighten delivery schedules while reducing wages. Without a robust safety net, Vietnam risks exacerbating economic inequalities and social unrest as AI technologies continue to evolve.

“The energy implications of such resource consumption threaten to deplete local and regional water reserves.”World Economic Forum

Vietnam's approach to AI governance reflects a broader trend where nations seek to assert control over their digital landscapes. However, the challenges posed by this law—ranging from potential economic dislocations to environmental degradation—underscore the need for a more comprehensive regulatory framework that considers the impacts on land and labor. As Vietnam navigates its high-tech ambitions, the government must prioritize cooperation among stakeholders to mitigate these risks and ensure sustainable development.