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As artificial intelligence accelerates global demand for data centres, questions around data sovereignty, national security, and geopolitical trust are becoming increasingly complex. In this conversation, Guillermo Christensen, Partner at K&L Gates and a national security law practitioner, unpacks why data localisation alone may not deliver the security governments expect and what truly matters when countries like Malaysia host global and foreign data infrastructure.
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00:09Thank you for tuning in Onya Gawani. As artificial intelligence expands at unprecedented pace,
00:15governments are defining what national security means in the digital age. So behind every system
00:22lies a very physical reality. Data centers cross about data flows and difficult questions about
00:28sovereignty and control. So we're pleased to welcome Guillermo Christensen, a partner at global
00:33law firm K&L Gates in national law security, practitioner advising companies and governments
00:39on AI, cybersecurity, export controls and national security reviews of global investments. A former
00:46CIA intelligence officer, US diplomat and science and technology advisor to the US mission to the OECD
00:52in Paris, Mr. Christensen brings a rare perspective on how law, geopolitics and AI infrastructure
00:58now intersects. So Mr. Guillermo, thank you so much for being with us. Welcome. How are you?
01:04I am very well. It's been a great, a great visit so far in Kuala Lumpur.
01:09And thank you for taking the time to speak with us this morning in our studio, all the way to
01:13Bukit Jalil. And that's an honor. So to start off, Guillermo, you've worked inside intelligence agencies,
01:21diplomacy and also now at the forefront of national security law. So from that vantage point, how has AI
01:28changed in your perspective, the way governments view data, not just as an economic resource, but as a
01:34source of national power? What's your opinion on that? Absolutely. In many ways, I think AI should be
01:40viewed a lot like electricity. So in the same way that electricity has changed the world around us,
01:48but at the very beginning when the first light bulb was invented and someone saw the light bulb and thought,
01:56wow, this is incredible. We have light now. At that point in time, they couldn't imagine what would happen to
02:05the world with electricity all the way to, you know, electric trains, cars and all of this. I think we
02:11may be
02:13similarly positioned with AI right now. And what I mean by that is we are so still early in the
02:20evolution
02:20of artificial intelligence, the way that it shapes our lives, the way that it will shape our lives.
02:27So I think it's hard to predict except to say that it's going to be a fundamental change in many
02:34ways
02:35in the way that we live, in the way that we work, in the way that we interact with technology,
02:42with all of these
02:43systems that we have around us. And even I think to the point, as some of the great thinkers of
02:50AI have been
02:51saying, it may even challenge us to understand spiritual and moral questions, because this could create the
02:59equivalent of something like human intelligence, potentially, in the future. And then we have to ask
03:06ourselves, what are we, if there's a machine that thinks like us? And I think that that's a, there's a
03:13lot to
03:14unpack in that. But the future, I think, is definitely not going to look like the present.
03:21I mean, it's a buzzword for now. And there's a lot to unpack. It's a complex world when it comes
03:26to the world
03:26artificial intelligence itself. So what can I say is the data has effectively moved from the server
03:31room to the strategy room. So when we talk about AI, it may be digital, but it relies heavily on
03:38physical infrastructure. For example, we have massive data centers that require land, water and energy and
03:44network stability at the same time. So from a national security perspective, does this mean geography is
03:50once again determining who can compete in strategic technologies like AI?
03:55Absolutely. Geography, I think will always matter. I can't imagine a world in which geography doesn't
04:02matter. And here, I'm not just speaking about the geography of what's happening on Earth. There are
04:07companies right now that are experimenting with putting AI data centers in space, which is a fascinating
04:14idea, a very technologically challenging idea. But we've pushed a lot of the data systems that we
04:20depend on into space. Low Earth orbit satellites, for example, for communications and things like that.
04:26So yes, geography matters, but perhaps even more so the capabilities to expand the compute power.
04:36You know, today we speak of compute as this incredibly important element of artificial intelligence.
04:44Who has the power to run these extremely data intensive, algorithmically heavy AI large language models?
04:55And the reality is not many countries have that capability. Obviously, the United States has the
05:01vast majority of this capability right now. China is developing it quite quickly and in its own ways,
05:08not necessarily following the U.S. pattern. Here in Malaysia, you have many data centers that are
05:14being built. I mean, you drive around and you see them. So there's a lot of this, but the top
05:20end
05:20kind of data centers, the top end GPU collections that are out there are still clustered mostly in the
05:30United States. So it definitely does shift the kind of the polar point of pivot over one country that has
05:38tremendous amount of that power from silicon, from chips, which are not made in the United States, by the way.
05:45They're made in Taiwan. And I was just there. And that's, you know, it's geography matters.
05:50All of this is really coming out of Taiwan right now.
05:52So are we saying that the resource capacity now translate directly into geopolitical leverage?
06:00Yes. No question about it. There's when when you think of going back to the beginning of history or
06:09maybe more the maritime history, those who have the the hardware to be able to undertake commerce.
06:18So the British Navy, the East India Company, they had power because they had the ships and the sailors to
06:25bring
06:26tea from Ceylon and from India. Right. Same thing. Today is no different. These are the vehicles through which
06:32massive amounts of electronic commerce are being undertaken. Now, could this change? Of course.
06:40I mean, there's it's possible that some enterprising company will develop a chip that will require much
06:49less energy, generate much less heat and potentially leapfrog any of the incumbent country companies right
06:57now. Those things happen. No, no company, I think, should be sitting there thinking, I have the advantage and I
07:06will
07:06keep it. That's not the way this works. But generally speaking, I would say who has the compute power right
07:13now
07:14has a lot of influence in the world by virtue of the fact that no one else can recreate that
07:20massive capital
07:22intensive investment. So. And this now creates a new role for certain countries like Malaysia.
07:29So as per what I said earlier, Malaysia have the land power capacity and also the connectivity that many others
07:37lack, making them attractive as a global data centers hubs. So when U.S. or global firms like E&L
07:45assess such locations, what are some of the key legal and security factors that determine the trust?
07:52Yes, absolutely. And in fact, I've worked on for some of our clients, we've worked on transactions involving data centers
08:01in in Malaysia. And basically, the way to think about it is we know that there is a geopolitical competition
08:08right now.
08:09And it's really, you know, at best, it's three, maybe two. Right. So the United States, China and the EU
08:16kind of playing a role.
08:17So countries like Malaysia that can be kind of in the middle, right, that know both all sides and can
08:24be more neutral ground,
08:26I think have an have a have a tremendous advantage in terms of being a location where you can have
08:32data centers
08:33that can provide service to everyone. That said, it obviously brings some risks, too.
08:40So, for example, one of the risks that we focus on is if you have a data center in Malaysia
08:45that is being used
08:46to divert chips that are export controlled to China, the U.S. government is going to be very upset about
08:54that.
08:55And there have been investigations. Another potential risk is the computing power of these data centers.
09:03There are some limitations on what can be done with it in terms of U.S. technology that's being used
09:08in China.
09:10So we've, you know, there have been reports that Chinese companies will bring data to Malaysia to try to process
09:17their data here in LLMs.
09:20That could be an issue as well. So those are what I will call the export control national security risks.
09:26Then you have the broader AI risks that every country, every company and every citizen is dealing with.
09:33Questions about who owns my data? Where does it go? If I put in a question into ChatGPT, who gets
09:44to see that?
09:45How sensitive is the information? How well is it protected?
09:49You know, a lot of people are asking ChatGPT or Gemini or Claude questions about their health, questions about their
09:58relationships.
09:59Um, maybe they have a question about their child and he's having difficulties with school.
10:04Mm-hmm.
10:05Should that be available to everyone? Or should that be protected?
10:11Do those companies have obligations to protect that information?
10:15Those are all really important questions. And I think to some extent, if the companies answer the question the right
10:23way with the help of the government,
10:25it will make the AI tools even more helpful. Because if you can trust that the, what you put into
10:32the ChatGPT interface is going to stay confidential between you and the machine,
10:39that opens the door to a lot more use of the information.
10:44If it means that anyone who has access to ChatGPT can see what you are asking, I think that also
10:51is a problem.
10:51I want to pick up from your point earlier about the China processing the data here.
10:59So from a national security and also legal perspective, where do Malaysia, the host countries, typically draw the line between
11:06an open data hub or data centers
11:10and protecting themselves from strategic exposure tied to geopolitical rivalries between you as and also China?
11:17Yeah. It's not a position that I envy. I think it's very difficult for countries like Malaysia, Singapore,
11:24you know, that are caught between two very powerful countries with different perspectives on national security.
11:32My take on it is, you know, the United States has been very clear, and I speak here for myself,
11:38not for the U.S. government,
11:40but the United States has been very clear that we expect that if there are U.S. technologies sitting in
11:50a data center in Malaysia,
11:51that the United States government has the jurisdiction, the right to dictate, to tell that data center how it should
12:01operate
12:02and allow that technology to be used.
12:04Because the United States, our view on export controls is if it was the, if the technology or the service
12:12is the product of an American,
12:15we have jurisdiction over it wherever it goes, anywhere in the world.
12:19So for Malaysia, this presents a problem in that it has to ensure that the United States doesn't think that
12:26Malaysia is sending all this stuff to the wrong place.
12:31Because then the United States could put Malaysian companies on certain lists or block access to technology,
12:38and that's happened in other countries.
12:41So there's a risk that they, you know, they could somehow, they could use the regulations and export controls to
12:48block that kind of access.
12:50And that could be obviously a real problem if data centers in Malaysia want to have access to NVIDIA GPUs,
12:58for example.
12:58So I think in general what I see from Malaysia is it's being very careful to ensure that U.S.
13:07laws are not being broken by companies in Malaysia when they're using U.S. technology.
13:13And I think they're working, from what I understand, very closely with the U.S. government to try to ensure
13:18that's the case.
13:19Because, again, the implications could be very drastic if the U.S. government says we can't trust a data center
13:27in Malaysia,
13:28so they will not be allowed to buy NVIDIA chips.
13:32But after all, hosting data doesn't mean we know the data.
13:36And that leads to my next question, because many governments emphasize data sovereignty, which requires data to stay within national
13:44borders.
13:44So AI development depends on scale, speed, and also cross-border data flows.
13:50But in your view, Guillermo, is data sovereignty becoming a break-on innovation or a necessary protection in today's fragmented
13:57geopolitical environment?
14:00Yeah. I think in the beginning when the idea of data sovereignty really started to take hold,
14:05and it was really an idea that came mainly out of Europe, because Europe was concerned about their citizens' data
14:13not being protected,
14:15and particularly from U.S. companies.
14:17I think in the beginning, I think it was viewed as a break-on innovation, as you put it.
14:23I think that it was.
14:24I think now we can see that technology can allow us to maintain data sovereignty without as much of an
14:34impact on innovation.
14:36In particular, I think if you look at the large cloud data providers, whether it's AWS by Amazon, Azure by
14:47Microsoft,
14:48Google Cloud, obviously by Google, all of them now provide region-specific domains for their data centers,
14:58so you can host your data in the United States only, in Europe only, or in certain countries only.
15:06And I don't think that that has caused as much of a disturbance in innovation as people thought would be
15:12the case,
15:13which is not surprising. When people put their minds to it, they can always come up with technological solutions that
15:21will work if they're important enough to try.
15:24So I don't think it's as much of an issue, and I think it makes a lot of sense.
15:28The data sovereignty issue, I think, is central to the sovereignty of any country now.
15:35And so I'm not surprised. In fact, I would expect that over time, this is basically going to be the
15:42default rule for data will be sovereignty.
15:47It also happens to be great work for lawyers.
15:49I always joke that a lot of these things are really, I mean, they have important reasons for being,
15:54but they're especially good for keeping lawyers employed.
15:58So you mentioned that the sovereignty itself doesn't have much impact,
16:02but keeping the data within the national borders is a real determinant.
16:07So what's the real determinant that could actually help the security or trust that actually matters more,
16:15which who owns the infrastructure, who controls access, and who can actually legally compel the data?
16:21Yeah. I think the latter point is very important.
16:25And that's where data sovereignty becomes a real issue.
16:28So, for example, in China, the government has been adopting similar approaches to the United States,
16:38which is to say the data for our citizens and the data for our companies should be hosted in China,
16:45and if another country wants access to it, they need to work through established processes
16:51to request permission to be able to access that.
16:55The European Union is the same way.
16:57There's a cloud agreement between the U.S. and certain countries.
17:01All the same things.
17:02It really comes down to access by governments to other people's data in other countries.
17:08That, to me, is a traditional sovereignty type of consideration that makes complete sense.
17:14The more difficult question is, what if you're a company like, say, Microsoft or Amazon,
17:21and you're trying to provide services for everyone?
17:25That's where it gets more tricky, right?
17:27Because let's say you want to sell certain products in the United States and also in Malaysia,
17:34but in order to sell them in Malaysia, you have to conform to the local laws.
17:40That's where I say this is a little bit like creating a lot of work for lawyers,
17:44because then you have to have lawyers who are going to look at that and say, well...
17:46Law processer.
17:47Law processer.
17:48Yeah.
17:48So that's where it's complicated, but it's not so complicated that it cannot be done
17:55because we're doing it every day.
17:56So it's a little bit, it's not a break on innovation, but it's a little bit like putting
18:03your hand out in the wind in a car.
18:05Yeah, you slow it down a little bit, but probably not that much.
18:08So data sovereignty is one thing, but some countries are now exploring the idea of data
18:14embassies.
18:16So foreign-controlled data infrastructure hosted domestically subject to special legal protections.
18:21So from a national security law perspective, is this a pragmatic compromise or does it create
18:26more risk than stability?
18:29I think it's a very pragmatic solution.
18:31Um, and, you know, we've, we've already, we've had things like that, the free trade
18:38zones that you have in the Middle East, that you have in Asia, um, they make a lot of sense.
18:43They, they speed up commerce, right?
18:45So in a free trade zone, I bring the goods into the free trade zone.
18:49I don't have to go through customs.
18:50I don't have to go through all of the tariffs and all that.
18:53And then if I need to ship that good to another country, that good never has to enter into any
18:58one country.
18:59It makes things very easy.
19:00Similarly, with, uh, with these, um, data embassies, uh, I think it, it allows countries,
19:08for example, like Malaysia or perhaps the UAE to build the infrastructure and then to host
19:14data for other countries without making it subject to your laws or the UAE's laws so that the
19:23data can exist and be under the jurisdiction of whatever country the data is associated with.
19:28I think it makes a great deal of sense because one of the, one of the most important positive
19:35attributes, most, most compelling reasons why you want to have data centers all over
19:39the world is for resilience, right?
19:43So let's say, you know, when data centers fail because the power goes down or a fiber optic cable gets
19:49cut by accident.
19:50If you have a data center in another country, if you have a data center in another country, it automatically
19:54shifts the activity to that data center and you, on your phone, on your computer, you won't notice it.
20:00It makes the systems reliable. It makes them effective. So having, let's say, U.S. data in Malaysia in a
20:09digital embassy that allows it to be the place where the data can fall back on if there's a disaster
20:17or because you're closer to it, to me, makes a great deal of sense.
20:22And we, we can do this because, you know, with, with a lot of these data centers, the data is
20:28protected by encryption, which is at the heart of everything we do in cyber security.
20:32And so you can have data centers where the data is like it would be in the United States. It's
20:38just sitting on a server rack with the hard drives located in Malaysia, but protected pretty much to the same
20:46extent as if they were sitting in, say, Arizona.
20:50And we've talked about all the risks that might happen, but on the hindsight, hosting the foreign EI and also
20:56data infrastructure can actually generate investments, skills and also global relevance.
21:00And it can also bring cyber political exposure as well at the same time. So we have about four minutes
21:06left.
21:06So how should governments like Malaysia realistically balance opportunity at the same time against long term dependency and also risk?
21:15And perhaps you could include in some advice as a middle power country like Malaysia today, a single decision on
21:22data governance or AI infrastructure would that actually matter most in determining whether images as a trusted hub
21:28or becomes a strategically exposed over the next decade?
21:32And, you know, the answer for that is the same that it's always been people, the real soft power, right?
21:41The real software is people. And I think what every country has to do right now is really rethink how
21:48it invests in the education of its young,
21:53not just the technology, not just the technology, but figuring out how to be part of this massive revolution in
21:59information.
22:00I had the pleasure of going to Asia Pacific University on my first day.
22:05I gave a talk and then I was with the students. It was incredible.
22:09I mean, that university is fantastic. If you haven't visited there, it's state of the art, very, very good.
22:14But that's, that's the key. You have to, and we have this challenge in the U.S.
22:20We are trying to figure out how do we educate a future generation to deal with technologies that we don't
22:27yet completely understand.
22:29But that to me is the key. Every country, it doesn't matter whether it's the United States, whether it's China,
22:35Korea, Malaysia, people,
22:38you, we have to figure this out because we are on the, on the verge of a massive shift in
22:46technology.
22:47And I don't know that our education systems are prepared at all for that.
22:52So we have a long way to go. And thank you so much, Mr. Guillermo and Christensen.
22:59Thank you for helping us understand why data infrastructure may define national power and sovereignty in years ahead.
23:05Thank you so much again for your insights and taking the time to speak with us this morning.
23:09And you can find this whole discussion on all of our social media platforms and that includes astroawani.com.
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