Indo-Pacific Faces Growing AI Risks in Critical Infrastructure: Report In recent years, the Indo-Pacific region has emerged as both a global growth engine and a digital testing ground

The Indo-Pacific region is experiencing mounting vulnerabilities in critical infrastructure as artificial intelligence (AI) becomes integral to power, transport, emergency services and other essential systems, according to a latest report by Protostar Strategy.

In recent years, the Indo-Pacific region has emerged as both a global growth engine and a digital testing ground. Mobile-first economies, large-scale infrastructure projects, and ambitious smart city plans have created fertile conditions for AI integration, particularly in sectors like transport, energy, health and water. From predictive maintenance of grid systems in New Delhi to AI-enabled flood forecasting in Jakarta, governments are betting that automation and intelligent analytics can drive efficiency, reduce human error and increase service continuity.

The report titled 'Securing the Future: AI, Critical Infrastructure, and Regulatory Readiness in the Indo-Pacific', in partnership with the American Chamber of Commerce Australia, its counterparts in India, Indonesia and Singapore, and with support from Palo Alto Networks, underscores that AI has shifted from future promise to operational reality.

Adoption is unlocking efficiency and resilience benefits but also leading to challenges such as data poisoning, adversarial manipulation and tightly coupled systems where technical failures may cascade across borders.

"AI now sits inside the machinery of daily life. The question is no longer if it will be used to run these systems, but whether governments will secure it in time," said Tobias Feakin, the report's author and former Australian Ambassador for Cyber Affairs and Critical Technology. "The Indo-Pacific is on the frontlines of both digital adoption and geopolitical rivalry. Without a unified approach, countries risk creating gaps that sophisticated cyber actors can exploit. If they can converge, they will not only secure their own resilience but shape the standards that others will follow."

Based on high-level workshops with policymakers and industry leaders across Australia, India, Indonesia, and Singapore, the report highlights key regional trends such as India seeing rapid AI adoption, but regulatory fragmentation and uneven state capacity are exposing its essential systems.

India has made AI a national priority, but it does not yet have a national system for governing it. The 2018 National Strategy for AI set an ambitious vision, and more recently, the India AI Mission has been established to build national capacity and foster innovation. Yet India still lacks a dedicated legislative or institutional framework for overseeing AI use in critical infrastructure. Instead, AI adoption has proceeded through a mosaic of pilots, public–private partnerships and ministry-led innovation schemes.

For example, the Ministry of Power supports predictive maintenance projects in energy grids. The Ministry of Railways has launched AI tools for dynamic scheduling and fault detection. The Ministry of Urban Affairs encourages the use of AI in smart city planning, and the Reserve Bank of India published a responsible AI framework. But there is little integration across these efforts, no single authority empowered to coordinate AI deployment, evaluate systemic risks or certify safety.

Australia is taking a resilience-first approach, but still lacks AI-specific assurance frameworks. Indonesia's innovation and private-sector dynamism are outpacing governance, creating risks of dependency and systemic vulnerability. Singapore has the region's most anticipatory and exportable governance model – one whose agility could set the standard for others in the region.

"Palo Alto Networks is proud to have commissioned this independent report," said Swapna Bapat, Vice President and Managing Director, India and SAARC, Palo Alto Networks. "We believe it provides a vital framework for policymakers and industry leaders to collaborate on a path forward. We look forward to contributing to ongoing discussions about the secure and responsible deployment of AI for critical infrastructure and governments across the Indo-Pacific."

The report emphasises that fragmented approaches create opportunities for cyber threats and policy arbitrage. It proposes a cooperative path forward built on interoperable assurance frameworks; cross-sector, public-private co-governance; and leveraging regional platforms to develop trusted, scalable and exportable approaches that support open markets and resilience.