Digital Embassies for Sovereign AI

Summary

The World Economic Forum hosted a discussion on launching a global framework for digital embassies, focusing on sovereign AI infrastructure and international cooperation. Cathy Li, head of the Center for AI Excellence, moderated the conversation with Malaysian Minister of Digital Gobind Singh Deo and Swiss State Secretary Alexandra Fasel. The concept of digital embassies has evolved from Estonia’s original model to address growing demands for secure access to AI infrastructure across borders.

Minister Singh Deo explained that as countries race to become AI nations by 2030, they face capacity constraints in building data centers due to limited water and energy resources. Malaysia’s approach involves three pillars: energy, water, and fast-tracked processes for infrastructure development. He emphasized that digital embassies could enable countries to build data centers in resource-rich host nations while maintaining data sovereignty and control. The framework aims to establish trusted guidelines that countries can quickly implement without lengthy negotiations.

State Secretary Fasel drew parallels between digital embassies and traditional diplomatic missions, noting that the framework would function like a “Vienna Convention for digital embassies.” Switzerland positions itself as a competitive host nation due to its neutrality, stability, and robust privacy legislation. The country offers additional services including Apertus, an open AI solution, and ICAIN, an international computation network providing access to powerful supercomputing capabilities.

Both speakers acknowledged challenges including data localization requirements that may conflict with AI sovereignty needs. The framework addresses these through legal robustness, interoperability, resilience by design, and access portability. The World Economic Forum plans to launch the draft framework in April 2025 in Jeddah, followed by a year-long consultation period, with the goal of creating a living document that evolves with technological advancement.

Keypoints

Major Discussion Points:

– Digital Embassies Framework Development: The World Economic Forum is leading the creation of a global framework for “digital embassies” – secure cross-border AI infrastructure arrangements that allow countries to host critical digital infrastructure abroad while maintaining sovereign control over their data and governance.

– Resource Capacity Challenges: Countries face significant disparities in essential resources (water, energy, compute capacity) needed for AI infrastructure, creating a need for collaborative arrangements where nations with abundant resources can host data centers for countries lacking these capabilities.

– Data Sovereignty and Security: The framework must address complex issues around maintaining sovereign control over data when it’s physically located in another country, including legal clarity on access rights, jurisdiction, privacy laws, and dispute resolution mechanisms.

– Competitive Marketplace for Host Countries: Nations like Switzerland and Malaysia are positioning themselves as attractive hosts by offering additional services beyond basic infrastructure, such as open AI solutions, supercomputing access, and fast-tracked regulatory processes.

– Regulatory and Implementation Timeline: The initiative has an aggressive timeline with a draft framework launch planned for April 2025 in Jeddah, followed by a 12-month consultation period, addressing current regulatory prohibitions like data localization requirements that conflict with cross-border AI infrastructure needs.

Overall Purpose:

The discussion aims to introduce and gather feedback on the World Economic Forum’s initiative to create a standardized global framework for digital embassies – essentially a “Vienna Convention for digital infrastructure” that would enable trusted, secure cross-border arrangements for AI infrastructure while maintaining national sovereignty over data.

Overall Tone:

The tone throughout the discussion was collaborative, forward-looking, and pragmatic. Speakers demonstrated enthusiasm for the concept while acknowledging significant technical and regulatory challenges. The conversation maintained a diplomatic and professional atmosphere, with participants building on each other’s points constructively. There was a sense of urgency around the timeline and the growing global demand for AI infrastructure, but the tone remained measured and focused on practical solutions rather than becoming overly technical or contentious.

Speakers

– Cathy Li: Head of the Center for AI Excellence at the World Economic Forum

– Gobind Singh Deo: Minister of Digital of Malaysia

– Alexandre Fasel: State Secretary of Swiss Foreign Affairs

– Audience: George Simon Ulrich, Chief Justice of Switzerland (Federal Office of Statistics)

Additional speakers:

– Georges-Simon Ulrich: Director General of the Swiss Federal Office of Statistics (mentioned by Alexandre Fasel but did not speak directly in the transcript)

Executive Summary

The World Economic Forum hosted a discussion on launching a global framework for digital embassies, addressing challenges of sovereign AI infrastructure and international cooperation in the digital age. The session, moderated by Cathy Li, Head of the Center for AI Excellence at the World Economic Forum, brought together Malaysian Minister of Digital Gobind Singh Deo and Swiss State Secretary Alexandre Fasel to explore how nations can address AI infrastructure capacity constraints whilst maintaining data sovereignty.

The discussion centered on developing a standardized framework that would function as a “Vienna Convention for digital embassies,” providing guidelines that countries can implement without lengthy bilateral negotiations. The proposed framework aims to enable countries to extend critical digital infrastructure beyond borders whilst retaining control over data, compute, and governance.

Key Participants and Their Perspectives

Cathy Li – World Economic Forum

As session moderator and framework architect, Li explained that digital embassies would enable countries to “extend critical digital infrastructure beyond borders whilst retaining control over data, compute, and governance.” She emphasized that the framework addresses contradictions between data localization requirements and AI sovereignty needs.

Li outlined the framework’s guiding principles including legal robustness, interoperability, resilience by design, and access portability. She acknowledged terminology challenges, stating that while they use “digital embassy as a framing, it doesn’t mean that will be the final framework.” Li also promoted engagement through the hashtag #WEF26 for social media discussion.

Gobind Singh Deo – Malaysian Minister of Digital

Minister Singh Deo provided the economic rationale for digital embassies, explaining that “countries face capacity constraints in building AI infrastructure due to limited water and energy resources needed for data centers.” He outlined Malaysia’s approach focusing on three key areas: energy, water, and fast-tracked processes for infrastructure development.

Singh Deo reframed the challenge through resource optimization: “You’re not going to be able to bring the entire water facilities from one country to another, and moving the entire energy grid is going to be difficult as well. So you might want to think about it in the reverse of how you can actually move the data center that a country would ordinarily build in its own jurisdiction to a different country, a host country.”

He mentioned that Malaysia’s Prime Minister announced the AI nation goal for 2030 in Parliament six months prior. While expressing some concern about the “embassy” terminology potentially causing confusion with traditional diplomatic missions, he emphasized that substance should take precedence over labels.

Alexandre Fasel – Swiss State Secretary of Foreign Affairs

Fasel provided the diplomatic and legal framework perspective, drawing parallels between digital embassies and traditional diplomatic missions. He explained that while “the term ‘digital embassy’ is somewhat of a misnomer,” it draws from embassy immunities where premises and data are under total sovereign control of the sending state.

Fasel highlighted Switzerland’s positioning, citing the country’s “neutrality, stability, data capabilities, and scientific expertise.” He detailed Switzerland’s value-added offerings including Apertus, described as “radically open” with “whole development process, architecture, model weights, training data, recipes” being open, and ICAIN in Lugano, which provides “access to the most powerful supercomputer in any university of the world.”

He noted that Switzerland is considering including digital sovereignty topics in their proposed 2027 Global AI Summit, adding “if we receive it.”

Major Discussion Points and Framework Development

Resource Capacity Challenges

The discussion established that resource disparities drive the need for digital embassy arrangements. Singh Deo explained that some countries have abundant water and energy but lack resources to build data centers, while others have investment capacity but insufficient natural resources. This creates opportunities for mutually beneficial arrangements.

The practical approach involves relocating data centers to resource-abundant locations rather than attempting to move energy grids or water facilities, forming the economic foundation for the digital embassy concept.

Trust and Standardization

Trust emerged as a fundamental requirement for successful digital embassy relationships. Li emphasized that trust is essential for bilateral digital embassy relationships, while Fasel positioned Switzerland’s reputation as enhancing its competitive advantage.

All speakers agreed that a standardized global framework is essential to streamline arrangements and prevent bilateral agreements from “reinventing the wheel each time.”

Data Sovereignty and Classification

Data sovereignty considerations proved central to framework development. During the discussion, George Simon Ulrich, Director General of the Swiss Federal Office of Statistics, questioned: “There is a huge difference between text or picture data than from all the data that we have in the government. Do you make a distinction of that?”

Li acknowledged this as “the number one question” governments must answer, suggesting a potential solution where “training data and training processes remain within national boundaries whilst inference workloads can be processed across borders.” This distinction between training and inference represents a practical compromise between sovereignty requirements and operational efficiency.

Framework Implementation Timeline

The World Economic Forum has established a timeline for framework development. The draft framework will be launched in April 2025 at the special meeting in Jeddah, followed by a 12-month multi-stakeholder consultation period to gather feedback.

Singh Deo emphasized the importance of pre-established governance frameworks, noting that investors can make decisions quickly without lengthy negotiations when trusted frameworks exist.

Areas of Consensus

The discussion demonstrated strong consensus across several key areas:

Standardization Necessity: All speakers agreed that a standardized global framework is essential, with Fasel’s Vienna Convention comparison resonating with other participants.

Trust as Foundation: Both Li and Fasel emphasized trust as a cornerstone requirement, with Switzerland’s established reputation highlighted as a competitive advantage.

Resource-Driven Solutions: Li and Singh Deo aligned on the practical necessity of cross-border solutions due to water and energy constraints in many countries.

Adaptive Framework Design: Speakers agreed the framework must be comprehensive yet flexible, with Singh Deo envisioning “a living document that improves as technology develops.”

Unresolved Issues and Future Challenges

Several significant challenges remain for the consultation period:

Regulatory Reconciliation: The fundamental challenge of reconciling existing data localization requirements with cross-border AI infrastructure needs requires further development of specific mechanisms.

Data Classification Complexity: The distinction between different types of government data requires detailed operational guidance beyond the current framework scope.

Technical Implementation Standards: The framework principles require translation into specific technical standards and operational procedures.

Conclusion

The World Economic Forum’s digital embassies framework discussion revealed strong international consensus on the need for standardized approaches to cross-border AI infrastructure arrangements. The alignment between speakers from different sectors and countries suggests significant potential for successful framework development.

The April 2025 launch in Jeddah represents a critical milestone, with the subsequent 12-month consultation period providing opportunities to address unresolved technical, legal, and operational challenges. The framework’s success will depend on its ability to balance sovereignty requirements with practical infrastructure needs while maintaining flexibility to evolve with technological advancement.

Agreement points

Digital embassies framework needs standardization to avoid reinventing bilateral agreements

Digital embassies enable countries to extend critical digital infrastructure beyond borders while retaining control over data, compute, and governance

A global framework for digital embassies would serve as a “Vienna Convention” equivalent, preventing bilateral agreements from reinventing the wheel each time

Pre-established governance frameworks are essential so investors can make decisions quickly without lengthy negotiations

All speakers agree that a standardized global framework is essential to streamline digital embassy arrangements, prevent redundant negotiations, and provide trusted guidelines that countries can rely on when establishing cross-border AI infrastructure agreements.

Legal and regulatory | Infrastructure | Development

Trust is fundamental for successful digital embassy relationships

Trust is essential for bilateral digital embassy relationships, and Switzerland’s reputation enhances its positioning as a host country

Switzerland’s competitive advantages include neutrality, stability, data capabilities, and scientific expertise

Both speakers emphasize that trust between nations is a cornerstone requirement for digital embassy arrangements, with Switzerland’s established reputation for trustworthiness being highlighted as a competitive advantage.

Legal and regulatory | Human rights | Infrastructure

Resource constraints drive the need for cross-border AI infrastructure solutions

Digital embassies enable countries to extend critical digital infrastructure beyond borders while retaining control over data, compute, and governance

Countries face capacity constraints in building AI infrastructure due to limited water and energy resources needed for data centers

Moving data centers to resource-rich host countries is more feasible than relocating entire energy grids or water facilities

Both speakers acknowledge that practical resource limitations (water, energy) in many countries necessitate cross-border solutions for AI infrastructure, making digital embassies a logical response to these constraints.

Infrastructure | Development | Economic

Framework must be adaptable and comprehensive

Framework includes guiding principles like legal robustness, interoperability, resilience by design, and access portability

The framework should be a living document that improves as technology develops

Both speakers agree that the digital embassies framework needs to be both comprehensive in addressing current challenges and flexible enough to evolve with technological advancement.

Legal and regulatory | Infrastructure | Development

Similar viewpoints

Both speakers acknowledge that while the term ‘digital embassy’ may not be perfect, the underlying concept is sound and the framework should focus on substance over terminology while remaining adaptable to change.

The term “digital embassy” is somewhat of a misnomer but draws from embassy immunities where premises and data are under total sovereign control of the sending state

The framework should be a living document that improves as technology develops

Legal and regulatory | Infrastructure | Development

Both speakers recognize that existing regulatory barriers pose significant challenges to digital embassy implementation and that systematic approaches are needed to address these while maintaining security standards.

Data localization requirements in many jurisdictions contradict the need for AI sovereignty by preventing cross-border data movement

Regulatory prohibitions must be identified and mechanisms developed to overcome them while maintaining security and data protection standards

Legal and regulatory | Human rights | Cybersecurity

Unexpected consensus

Environmental sustainability as a benefit of digital embassies

The framework aims to support demand-aligned planning while reducing energy burden on the planet

While the discussion primarily focused on sovereignty, security, and economic benefits, there was unexpected mention of environmental sustainability as a key advantage of the digital embassies approach, suggesting that efficient resource utilization could reduce overall environmental impact.

Development | Infrastructure | Legal and regulatory

Terminology flexibility – substance over labels

We’re using digital embassy as a framing, but it doesn’t mean that that will be the final framework

The term “digital embassy” is somewhat of a misnomer but draws from embassy immunities where premises and data are under total sovereign control of the sending state

I think we shouldn’t worry too much about the label, but the substance of it is important

Unexpectedly, all speakers showed remarkable flexibility about the terminology itself, prioritizing the functional framework over the specific naming convention, which suggests strong consensus on the underlying concept despite potential confusion about the term.

Legal and regulatory | Infrastructure

Overall assessment

Summary

The speakers demonstrated strong consensus across multiple key areas: the need for standardized frameworks, the importance of trust in bilateral relationships, the practical necessity of cross-border solutions due to resource constraints, and the requirement for adaptable governance structures. There was also unexpected agreement on environmental benefits and flexibility regarding terminology.

Consensus level

High level of consensus with significant implications for successful framework development. The alignment among speakers from different sectors (international organization, government ministers from different countries) suggests strong potential for global adoption and implementation of the digital embassies concept, particularly given their shared understanding of both challenges and solutions.

Different viewpoints

Unexpected differences

Terminology and framing of ‘digital embassies’

The framework should be a living document that improves as technology develops

The term ‘digital embassy’ is somewhat of a misnomer but draws from embassy immunities where premises and data are under total sovereign control of the sending state

While both speakers support the digital embassy concept, Singh Deo explicitly expresses concern about using the word ’embassies’ because people might confuse it with traditional diplomatic missions, whereas Fasel embraces the embassy analogy and draws detailed parallels to the Vienna Convention. This disagreement on terminology is unexpected given their alignment on substance.

Legal and regulatory | Infrastructure

Overall assessment

Summary

The discussion shows remarkably high consensus among speakers with minimal disagreement. The main areas of difference relate to terminology preferences and approaches to regulatory challenges rather than fundamental disagreements about goals or principles.

Disagreement level

Very low level of disagreement. The speakers demonstrate strong alignment on the core concept, benefits, and implementation approach for digital embassies. The few differences that exist are primarily about framing, terminology, and specific implementation details rather than substantive policy disagreements. This high level of consensus suggests strong potential for successful framework development and international cooperation on digital embassy initiatives.

Partial agreements

Similar viewpoints

Both speakers acknowledge that while the term ‘digital embassy’ may not be perfect, the underlying concept is sound and the framework should focus on substance over terminology while remaining adaptable to change.

The term “digital embassy” is somewhat of a misnomer but draws from embassy immunities where premises and data are under total sovereign control of the sending state

The framework should be a living document that improves as technology develops

Legal and regulatory | Infrastructure | Development

Both speakers recognize that existing regulatory barriers pose significant challenges to digital embassy implementation and that systematic approaches are needed to address these while maintaining security standards.

Data localization requirements in many jurisdictions contradict the need for AI sovereignty by preventing cross-border data movement

Regulatory prohibitions must be identified and mechanisms developed to overcome them while maintaining security and data protection standards

Legal and regulatory | Human rights | Cybersecurity

Key takeaways

Digital embassies represent a solution to AI infrastructure capacity constraints by allowing countries to host critical digital infrastructure abroad while maintaining sovereign control over their data and governance

The concept addresses the fundamental mismatch where some countries have abundant natural resources (water, energy) but lack investment capacity for data centers, while others have investment capability but insufficient resources

A global framework for digital embassies is needed to establish shared standards and prevent bilateral agreements from repeatedly reinventing solutions to common technical, legal, and governance challenges

Trust, legal robustness, and pre-established governance frameworks are essential for enabling quick investment decisions and successful digital embassy implementations

Data classification and sovereignty considerations are critical – governments must determine what data can cross borders versus what must remain within national boundaries

The framework should be designed as a living document that evolves with technological developments and includes principles like interoperability, resilience, and access portability

Resolutions and action items

World Economic Forum will launch the draft digital embassies framework in April at the special meeting in Jeddah

A 12-month consultation period will follow the April launch to gather multi-stakeholder feedback on the framework

Switzerland plans to include digital sovereignty and AI infrastructure access topics in their proposed 2027 Global AI Summit

Continued consultation rounds with multi-stakeholders are ongoing to refine the framework before the April launch

The framework will be socialized throughout the remainder of the year following the April launch

Unresolved issues

How to reconcile existing data localization requirements in many jurisdictions with the need for cross-border AI infrastructure access

Specific mechanisms for overcoming regulatory prohibitions while maintaining security and data protection standards

Detailed handling approaches for different types of government data (beyond text or picture data)

The actual market demand for digital embassy services remains to be validated through the consultation process

Specific technical standards and operational procedures for implementing the framework principles

How to balance fast-tracking investment processes with maintaining rigorous security and governance standards

Suggested compromises

Allow inference workloads to be processed across borders while keeping training data and training processes within national boundaries

Develop tiered data classification systems that enable some government data to be hosted abroad while keeping absolutely confidential data within borders

Create standardized governance frameworks that can be quickly adopted rather than negotiating bespoke arrangements for each bilateral agreement

Focus on substance over terminology – acknowledge that ‘digital embassy’ may be a misnomer but provides a useful conceptual framework for understanding sovereign control principles

I think when we use the word embassies there’s a bit of concern, because people start to think that it’s got to do with the current embassies that we have today, and diplomatic concerns and what have you not. I think we shouldn’t worry too much about the label, but the substance of it is important.

Speaker

Gobind Singh Deo

Reason

This comment demonstrates sophisticated strategic thinking by acknowledging that terminology can create barriers to understanding and acceptance. It shows awareness that the ‘digital embassy’ framing might trigger diplomatic concerns or confusion, while redirecting focus to the practical benefits of the concept.

Impact

This comment immediately prompted Cathy Li to elaborate on why they chose the embassy metaphor, explaining it provides a ‘shared baseline understanding’ of secure, trusted spaces. It also led Alexandre Fasel to build on this by comparing the framework to the Vienna Convention on Diplomatic Relations, deepening the legal and conceptual foundation of the discussion.

The reality is you’re not going to be able to bring the entire water facilities from one country to another, and moving the entire energy grid is going to be difficult as well. So you might want to think about it in the reverse of how you can actually move the data centre that a country would ordinarily build in its own jurisdiction to a different country, a host country.

Speaker

Gobind Singh Deo

Reason

This comment reframes the entire problem by inverting conventional thinking. Instead of trying to bring resources to where you want to build, it suggests moving the infrastructure to where the resources already exist. This represents a fundamental shift from resource acquisition to resource optimization.

Impact

This insight became the foundational logic for the entire digital embassy concept discussed in the session. It established the core value proposition and practical rationale that both other speakers and the framework development built upon throughout the remainder of the discussion.

So that will be, I think, a competitive market. And I do believe that Switzerland, yes, will be competitive based on our very profile, neutrality, stability, frontline data capabilities, and scientific capabilities. But then also additional services we will be able to offer and do already offer.

Speaker

Alexandre Fasel

Reason

This comment shifts the discussion from theoretical framework to practical market dynamics. It introduces the concept that digital embassies will create a competitive marketplace where countries will differentiate themselves through additional services beyond basic infrastructure hosting.

Impact

This observation led to a detailed exploration of Switzerland’s specific value-added services (Apertus AI, ICAIN computing network, data discovery tools), transforming the conversation from abstract policy discussion to concrete examples of how the framework might work in practice. It also prompted Cathy Li to emphasize that this is about ‘access to AI workloads’ not just data storage.

There is a huge difference between text or picture data than from all the data that we have in the government. Do you make a distinction of that? Because I think the task doing, or there is no language in data that what the government has.

Speaker

George Simon Ulrich

Reason

This question introduces critical complexity by highlighting that not all data types are equivalent in terms of sensitivity, governance requirements, and handling protocols. It challenges the framework to address nuanced data classification rather than treating all government data uniformly.

Impact

This question forced the discussion to address data classification as a fundamental prerequisite, with Cathy Li acknowledging this as ‘the number one question’ governments must answer. It introduced the practical distinction between training data (kept within borders) and inference (potentially cross-border), adding operational specificity to the framework.

You want to try and build that framework at the outset, so that it’s a framework that’s recognised so people immediately know that if they want to actually invest in a particular country, this framework exists, they are already comfortable with it, and they actually move towards making their investments.

Speaker

Gobind Singh Deo

Reason

This comment reveals the economic imperative behind standardization – that uncertainty and lengthy negotiations are barriers to investment and implementation. It connects the technical framework to real-world business and policy decision-making timelines.

Impact

This insight led to discussion of the framework as a ‘living document’ and emphasized the importance of having ‘tried, tested and trusted’ governance frameworks ready before investment decisions are made. It reinforced the urgency of the April 2024 timeline for framework publication.

Overall assessment

These key comments fundamentally shaped the discussion by: (1) establishing the practical, resource-based rationale for digital embassies, (2) acknowledging and addressing terminological and conceptual barriers, (3) introducing market dynamics and competitive differentiation, (4) highlighting the complexity of data classification requirements, and (5) emphasizing the economic urgency of standardization. Together, they transformed what could have been an abstract policy discussion into a concrete exploration of practical implementation challenges, market opportunities, and operational requirements. The comments created a progression from problem identification to solution framework to market realities to implementation complexities, giving the discussion both depth and practical grounding.

How can regulatory prohibitions in different countries be identified and mechanisms developed to overcome them while maintaining security and data protection standards?

Speaker

Gobind Singh Deo

Explanation

This addresses the challenge of data localization requirements that may contradict AI sovereignty needs, requiring detailed analysis of legal frameworks across jurisdictions

What specific distinctions should be made between different types of data (text, picture, government data) in the digital embassy framework?

Speaker

George Simon Ulrich

Explanation

This highlights the need to differentiate data handling approaches based on data types, particularly for sensitive government data versus other data categories

What are the detailed steps needed to advance beyond current data handling practices for government data?

Speaker

George Simon Ulrich

Explanation

This seeks practical implementation guidance for moving from current government data practices to the proposed digital embassy framework

How should data classification and handling be structured, particularly regarding what data should never cross borders versus what can be used for training versus inference?

Speaker

Cathy Li

Explanation

This is fundamental to the framework as it determines the scope and limitations of digital embassy arrangements

What will be the specific content and focus areas for the 2027 Global AI Summit in Switzerland, particularly regarding digital sovereignty?

Speaker

Alexandre Fasel

Explanation

This relates to future policy development and international cooperation on AI sovereignty issues

How can the framework evolve as a living document to accommodate technological developments?

Speaker

Gobind Singh Deo

Explanation

This addresses the need for adaptive governance frameworks that can keep pace with rapid technological change

What will be the demand validation process during the 12-month consultation period following the April framework launch?

Speaker

Cathy Li

Explanation

This is crucial for determining whether there is sufficient international interest and need for the digital embassy framework

How can digital embassy arrangements help balance AI infrastructure access with environmental sustainability concerns?

Speaker

Cathy Li

Explanation

This addresses the dual challenge of meeting AI infrastructure needs while minimizing environmental impact