MARCHASIA BUSINESS OUTLOOK8NEWSROOMVIETNAM'S AI LAW KICKS OFF: 1ST IN SOUTHEAST ASIA TO REGULATE GEN AIVietnam's Artificial Intelligence (AI) Law, passed in December 2025 and effective from March 1, 2026, makes the country the first in Southeast Asia to implement a comprehensive legal framework governing AI.The law applies to Vietnamese organizations and foreign entities operating in Vietnam, covering developers, providers, and deployers of AI systems.A central pillar of the law is human oversight of generative AI. AI-generated content that cannot easily be distinguished from reality, including deepfakes, synthetic video, audio, and images must be clearly labeled. Entities must also disclose when users are interacting with an artificial agent rather than a human. The legislation adopts a risk-based regulatory model, drawing heavily from the EU AI Act. AI systems are classified as high-, medium-, or low-risk.High-risk providers must conduct a conformity assessment before deployment and again after significant modifications. In certain cases, high-risk deployers may be required to compensate victims first and subsequently seek reimbursement based on contractual arrangements and exemptions.Legal experts from LNT & Partners and Patrick Keil of DFDL note that the law's real impact will depend on forthcoming implementing decrees, sector-specific regulations, and enforcement practices.The government has directed the creation of a National AI computing center, improved national data resources, and the development of large language models in Vietnamese, aligning AI growth with international standards while maintaining "digital sovereignty." The framework also establishes a National AI Development Fund, startup support mechanisms such as HPC and GPU vouchers, and a regulatory sandbox to trial sensitive AI applications, including potential use cases in medical data systems and autonomous vehicles.Vietnam's leadership has linked the law directly to national economic ambitions. Prime Minister Pham Minh Chinh described AI as a pillar of sustainable development and central to expanding the country's digital economy and achieving five-year growth targets. SAMSUNG & SK HYNIX SHARES SLIDE AS MIDDLE EAST TENSIONS HIT MARKETSShares of Samsung Electronics and SK Hynix fell more than 3% in Seoul trading on March 3, as escalating US and Israeli military strikes on Iran triggered renewed risk aversion across global markets.Investors said fears that a prolonged blockage of the Strait of Hormuz, through which roughly 20% of the world's oil flows, could push crude prices higher and dent economic growth were weighing on share prices.This follows a global sell-off that also saw other Asian equity markets slump amid geopolitical uncertainty and oil price spikes.Market participants pointed to the possibility that sustained Middle East tensions would disrupt the global energy supply chain, putting upward pressure on fuel costs and inflation.Lee Kyung-min, a researcher at Daishin Securities, warned that past spikes in oil prices have preceded economic downturns and financial stress after lags, and that a protracted conflict could weaken oil supply stability, lift prices further, and harm the broader economy.Foreign institutional investors were net sellers on the KOSPI, driving much of the decline, with net foreign selling at around 1.8 trillion won by mid-morning trading. Domestic retail investors absorbed some of the pressure with net buying of approximately 1.25 trillion won, which helped limit losses.A similar dynamic emerged on February 27, when foreign investors recorded their largest single-day net selling on the KOSPI at 7.03 trillion won while individuals bought 7.543 trillion won in shares. Defensive and conflict-related sectors outperformed during that period, with defense firm Hanwha Aerospace rallying about 24%, and shipping stocks hitting daily upper price limits as investors rotated into areas perceived as benefiting from global tensions.The sell-off arrived amid broader concerns about escalating oil prices due to possible disruptions through the Strait of Hormuz. Some analysts and securities firms believe the situation could be resolved within a month, limiting long-term damage, but uncertainty remains high.South Korea's semiconductor landscape heavily dependent on memory chips and cyclical in nature also faces long-term budgetary pressure. SK Hynix, which controls an estimated 62­64% of the High Bandwidth Memory (HBM) market as of Q2 2025, has announced plans for an ambitious 600 trillion won (~$420 billion) fab investment cluster to expand capacity.However, sustained oil above $100 per barrel could add roughly 1.3 percentage points to South Korean inflation, dragging growth into the low-to-mid-1% range and constraining these expansion plans. Key Highlights· Vietnam becomes the first Southeast Asian nation with a comprehensive generative AI law· The framework mandates human oversight, deepfake labeling, and risk-based AI classification· Strong infrastructure push includes AI funds, regulatory sandboxes, and major data center expansionKey Highlights· Samsung and SK Hynix shares slid over 3% amid geopolitical risk from US-Iran conflict· Foreign investors drove KOSPI sell-off while retail buying limited losses· Rising oil price fears threaten inflation and long-term semiconductor investment plans
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