By Fanny Potkin and Panu Wongcha-um

SINGAPORE/BANGKOK (Reuters) -Southeast Asian countries are drawing up governance and ethics guidelines for artificial intelligence (AI) that will impose "guardrails" on the booming technology, five officials with direct knowledge of the matter told Reuters.

Regulators across the world are rushing to draft regulations to govern the use of generative AI, which can create text and images and is engendering excitement as well as fear about its potential to reshape a wide range of industries.

Ministers from the 10-member Association of Southeast Asian Nations (ASEAN) agreed in February on the need to develop an ASEAN "AI guide" for the region of 668 million people, but details of the discussions among regional policymakers have not previously been reported.

Senior Southeast Asian officials said the so-called ASEAN Guide on AI Governance and Ethics was taking shape and would try to balance the economic benefits of the technology with its many risks.

"The drafting is ongoing and it could be completed towards the end of the year before it is endorsed by ASEAN members," one official told Reuters.

Another official said it could be announced at the ASEAN Digital Ministers' Meeting early next year.

A spokesman for Singapore’s Ministry for Communications and Information said that as 2024 chair of that meeting, the country would be collaborating with other ASEAN states "to develop an ‘ASEAN Guide on AI Governance and Ethics’ that will serve as a practical and implementable step to support the trusted deployment of responsible and innovative AI technologies in ASEAN."

The other ASEAN countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Those governments were not immediately reachable for comment.

The sources declined to comment further on what the AI guide would look like, given the early stage of the discussions and confidentiality of the ASEAN process.

The sources, who included officials in three Southeast Asian countries, declined to be identified as they were not authorised to speak to the media.

Moves by ASEAN to set guidelines around AI come as the European Union and United States are expected to release a draft of a voluntary AI code of conduct within weeks. The code would take effect ahead of the EU’s trailblazing AI Act, which is still being thrashed out.

Like their counterparts in Europe and the U.S., regional policymakers have expressed particular concern about AI's potential to industrialise misinformation.

Singapore’s Infocomm Media Development Authority warned in a research paper in June about the risk of "hallucinations", when generative AI produces specious content with convincing certainty.

The island city-state has been at the forefront of AI strategy in the region and is leading the talks to draw up the AI guide, according to three sources.

(Reporting by Fanny Potkin and Panu Wongcha-um; Editing by Stephen Coates and William Mallard)