Institutional Expansion of National Security Exception Clauses in AI and its Impact on Regional Technology-Business Cooperation Under the B&R Initiative

Abstract

As artificial intelligence technology becomes essential to the global economy, national security legislation has increasingly hindered regional technological collaboration, especially among the B&R Initiative countries. This study investigates the institutional proliferation of national security exception clauses in artificial intelligence, assessing how their extensive and inconsistent implementation escalates compliance expenses, induces market volatility, and disrupts technological exchanges. These disturbances result in systemic shocks to regional economic collaboration, particularly within the digital economy. The paper emphasizes the structural unpredictability inherent in security-oriented regulatory frameworks through different regulatory instances, including the U.S. government’s inconsistent AI laws and the application of the Defense Production Act to leverage private-sector AI resources. It examines the policy rationale underlying civil-military integration and its influence on AI regulation. This study examines the legal obstacles encountered by multinational firms regarding extraterritorial regulation, restricted judicial remedies, and failures in international dispute settlement. It advocates for a stratified regulatory system and urges institutional responses at both corporate and international levels, encompassing enterprise-focused compliance initiatives and the establishment of a review mechanism inside the UN framework. The objective is to offer pragmatic solutions for multinational firms confronting these issues and to facilitate the restoration of regional technology-business collaboration while reconciling national security objectives with innovation.