As artificial intelligence, cross-border data flows, and digital public infrastructure increasingly shape foreign policy, diplomacy is being reshaped to encompass engagement with technology firms, standards-setting bodies, and multistakeholder institutions. Drawing on the case of Malaysia, this article argues that effective tech diplomacy for small and medium powers requires a whole-of-government approach that aligns domestic policy priorities with international engagement.
By Samantha Khoo
At a glance
- Tech diplomacy refers to a state’s strategic engagement with technology actors, platforms, and norm-setting institutions to shape the rules, standards, and governance of emerging technologies.
- Tech diplomacy requires a shift from state-centric diplomacy to multistakeholder engagement. Governments must engage not only other states but also technology firms, standards bodies, and multistakeholder institutions that increasingly shape digital governance.
- For small and medium powers, influence comes from coordination and rule-setting, not brute power. Coalition-building, regulatory frameworks, and participation in standards-setting are more effective than treating Big Tech as geopolitical equals.
Foreign policy today is increasingly defined by choices around artificial intelligence, cross-border data flows, digital platforms, cloud infrastructure, and semiconductor supply chains. These issues now shape economic competitiveness, national security, democratic resilience, and geopolitical alignment. As a result, diplomacy itself is being reshaped, as states must not only negotiate with other governments but also engage private technology firms, standards-setting bodies, and multistakeholder institutions that increasingly influence global norms and governance.
This shift has given rise to what is now commonly referred to as tech diplomacy. Drawing on existing research, tech diplomacy can be understood as a state’s strategic engagement with technology actors, platforms, and norm-setting institutions to shape the rules, standards, and governance of emerging technologies. Unlike traditional diplomacy, which centres on relations between sovereign states, tech diplomacy operates in a polylateral environment involving governments, private technology companies, standards bodies, and civil society.
Beyond the rhetoric, however, a critical question emerges: what might effective tech diplomacy actually look like for small and medium powers?
Power, Big Tech, and the Limits of Diplomacy
In this evolving environment, technology companies, platforms and standards bodies have become influential actors in global governance. Here, “Big Tech” refers to the world’s largest technology companies, particularly major digital platforms, cloud infrastructure providers and AI developers.
There is a growing instinct to treat these Big Tech companies in the same way as major geopolitical powers. This instinct is understandable, given that they possess economic capacities that rival many states, their platforms shape public discourse across borders, and their technical architectures increasingly govern online speech, markets, and information flows in ways that governments struggle to directly control. However, the comparison is ultimately inadequate. Despite their influence, Big Tech companies are not sovereign actors. They do not bear public obligations in the way states do, nor are they bound by international law, diplomatic conventions, or treaty-based accountability mechanisms. Their decisions are driven primarily by commercial imperatives, competitive pressures, and internal corporate governance rather than national interest or a public mandate. Treating them as if they were great powers risks misunderstanding both their motivations and their accountability structures’; and may lead small and medium powers to adopt strategies that are neither appropriate nor effective.
Why Traditional Diplomatic Tools Fall Short
This distinction has important implications. Traditional diplomacy is grounded in relations between states and relies on reciprocity, treaty obligations and formal mechanisms of accountability. Tech diplomacy operates in a different environment, where governments must engage private technology firms, standards bodies, and multistakeholder institutions that shape the rules of the digital economy. As a result, the tools of state-to-state diplomacy cannot simply be applied to governing private technological power.
These differences have practical consequences. Governments cannot negotiate with technology companies in the same way they negotiate with other states. Diplomatic signalling, reciprocity, and political pressure carry limited weight with corporate actors. Instead, influence over technology firms is typically exercised through legislation, regulation, standards-setting, and coalition-building. The European Union’s data protection and platform governance regimes illustrate this dynamic. Through the General Data Protection Regulation and the Digital Services Act, the EU has influenced the global behaviour of technology firms not through diplomatic negotiation, but through market-setting regulation that companies must comply with to access European markets. Effective tech diplomacy, therefore, depends on shaping the rules of the system rather than negotiating directly with individual firms.
The Challenge for Small and Medium Powers
This dynamic is particularly important for Southeast Asian countries. Across the region, micro, small, and medium enterprises form the backbone of national economies, and few governments can match the scale, capital, or technical capacity of global technology firms. Attempting to engage Big Tech as geopolitical equals risks overstating national leverage while overlooking more effective strategies.
For small and medium powers, effective tech diplomacy depends less on brute influence and more on coordination, coalition-building, and rulemaking. Historically, these states have exerted influence through multilateral institutions and rules-based systems that mitigate structural power asymmetries. In the digital era, the greatest risk is not exclusion but incoherence. Countries that fail to coordinate domestic policy with international engagement risk inheriting governance arrangements they had little role in shaping. Over time, this can narrow future policy space and deepen technological dependence.
Malaysia provides a useful illustration of the coordination challenge. Responsibilities for AI governance, cybersecurity, digital trade, and data regulation are distributed across multiple institutions, including the Ministry of Digital, the Ministry of Communications, the Ministry of Investment, Trade and Industry (MITI), the National Cyber Security Agency (NACSA), Bank Negara Malaysia, and the Ministry of Foreign Affairs. Each engages international partners through different forums and initiatives — ranging from trade and investment negotiations to cybersecurity cooperation and multilateral digital governance discussions. While Malaysia is active in regional and global digital forums, these engagements are often conducted in parallel rather than as part of a single, unified national tech diplomacy strategy. Without stronger coordination, opportunities to shape global digital governance may be diluted and external partners may receive inconsistent signals about national priorities.
Moving Beyond Adoption: From Digital Adoption to Rule-Shaping
At the regional level, this challenge is mirrored across ASEAN. The region has made significant progress in digital cooperation through initiatives such as the ASEAN Digital Masterplan 2025, the ASEAN Digital Data Governance Framework and ongoing negotiations on the ASEAN Digital Economy Framework Agreement (DEFA). Together, these efforts reflect a growing recognition that collective rule-setting can strengthen regional resilience and bargaining power in a global digital economy dominated by external actors. However, ASEAN cooperation has historically focused on connectivity, infrastructure, and e-commerce facilitation. As global debates increasingly shift toward AI governance, data regulation, and platform accountability, ASEAN will need to expand cooperation into these emerging policy areas if it is to move from digital adoption to digital rule-shaping.
The implications for Southeast Asia are clear. At the national level, governments should prioritise establishing inter-agency coordination mechanisms that align domestic digital regulation, trade policy, and foreign policy engagement. They should also develop clear national positions on AI governance and cross-border data flows to guide participation in regional and global negotiations. At the regional level, ASEAN should use the ongoing DEFA negotiations to begin developing shared regional positions on data governance and AI policy, while strengthening coordination among member states in global digital governance forums to present more consistent regional positions.
Tech diplomacy is not about competing with Big Tech on power or scale. It is about shaping the rules and environments in which technology is governed. For Southeast Asian states, the window for influence remains open, but it is narrowing. Coherence, coordination, and coalition-building will determine whether the region helps shape the digital order or simply adapts to it.
This article was first published in TFGI on 16 March 2026
