Manila has rejected a request from Washington to place a planned 1,619-hectare artificial intelligence hub under American law and grant diplomatic immunity to U.S. personnel at the site, a Philippine official confirmed Monday.
The decision marks a rare assertion of sovereignty by Manila in its security relationship with Washington, which has deepened significantly since President Ferdinand Marcos Jr. took office in 2022. The $1.6 billion facility would represent one of the largest American technology investments in Southeast Asia, but the Philippines refused to cede legal jurisdiction over the site.
According to sources familiar with the negotiations, U.S. Defense Secretary Pete Hegseth's office sought provisions similar to those governing American military bases under the Enhanced Defense Cooperation Agreement, which grants U.S. forces access to Philippine installations while maintaining Philippine sovereignty. But the AI hub proposal went further, requesting that American law apply within the facility's boundaries and that U.S. personnel enjoy diplomatic immunity from Philippine jurisdiction.
Manila's rejection reflects growing regional unease about what some analysts call "tech colonialism" - the extension of great power competition into the digital realm with sovereignty implications. While Southeast Asian nations welcome foreign investment in advanced technology, they remain sensitive to arrangements that could compromise their legal authority.
The decision comes as the Philippines balances its security dependence on the United States - particularly for defense against China's expansive South China Sea claims - with domestic political pressure to maintain sovereignty. Marcos has reversed his predecessor Rodrigo Duterte's pivot toward Beijing, but faces criticism that his administration has conceded too much to Washington.
The Philippines hosts five American military sites under EDCA, with Washington investing hundreds of millions of dollars in infrastructure improvements. The rejection of extraterritorial status for the AI hub suggests Manila sees a distinction between security cooperation and technology governance.
The facility would have focused on data processing and artificial intelligence applications, with potential military and commercial uses. Philippine officials indicated willingness to proceed with the investment under standard foreign investment rules, where Philippine law applies and disputes are resolved in Philippine courts.
The case sets a precedent for the region. As the United States and China compete for technological influence across Southeast Asia, governments must decide whether advanced technology partnerships require legal concessions. Manila's answer, at least in this case, is no.
Ten countries, 700 million people, one region - and when it comes to sovereignty over emerging technology, they're drawing clearer lines than Washington expected.
