AI Compliance for SMEs: Lessons from X in Indonesia

Most SMEs treat AI features in marketing tools like a plug-and-play upgrade. Indonesia’s new enforcement posture says otherwise.

This week, Indonesia’s Ministry of Communication and Digital (Kemkomdigi) opened an investigation into alleged misuse of Grok AI on X—specifically around non-consensual, manipulated images and pornographic content. The timing matters: Indonesia’s new Criminal Code (Law No. 1 of 2023) took effect on 2 January 2026, and it explicitly regulates pornographic content with penalties that can reach 10 years’ imprisonment (per the cited articles in the coverage).

If you’re a Singapore SME using AI business tools for content, ads, customer engagement, or social media workflows—this isn’t “big platform drama.” It’s a preview of what cross-border AI governance looks like in Southeast Asia: platform accountability, stronger content controls, faster takedown expectations, and real consequences when safeguards aren’t built in.

What Indonesia’s Grok AI probe actually signals

Indonesia’s message is straightforward: if your technology can create harm at scale, you’re expected to prevent it at scale. That expectation applies to global platforms like X—and it will increasingly apply to the tools SMEs use to market, sell, and support customers.

Kemkomdigi’s concern (as reported) isn’t only “bad content exists.” It’s that Grok AI allegedly lacks explicit safeguards to prevent turning real personal photos into pornographic deepfakes without consent. The ministry framed this as a violation of privacy and self-image rights, with particular risk to women and minors.

Two important implications for SMEs:

1. Regulators are focusing on “system design,” not just user behaviour. If your workflow uses AI image tools, auto-captioning, generative creative, or chatbots, you need governance around how the system can be misused.
2. Cross-border marketing makes you part of the regulatory map. The moment you run campaigns targeting Indonesia, host communities there, or collect Indonesian customer data, you inherit more compliance expectations.

Why this matters beyond Indonesia

The report notes that regulators in markets like India, France, Malaysia, and Turkey have also raised concerns about generative AI misuse. That pattern is the real story: AI regulation is becoming a trade and go-to-market constraint, similar to what GDPR did to data practices.

For Singapore SMEs expanding regionally, the takeaway is blunt: your digital marketing stack now has legal and reputational risk built into it.

The practical risk for Singapore SMEs using AI marketing tools

The common SME assumption is: “We’re not building models, we’re just using tools—so compliance is the vendor’s job.” That’s only half true.

Yes, platforms must build guardrails. But you’re still responsible for how AI is used inside your business, especially when:

• your team uses AI to generate images featuring real people (customers, staff, influencers)
• your social team schedules posts automatically with limited review
• your chatbot produces replies that could be offensive, defamatory, or privacy-violating
• your agency or freelancer uses AI on your behalf

Here’s how the risk typically shows up in digital marketing:

1) Non-consensual likeness use (the “we thought it was fine” problem)

A marketer grabs a customer photo from a testimonial DM and asks an AI tool to “make it more premium,” “change outfit,” or “create a lifestyle version.” If the output becomes sexualised or misleading, you’ve created non-consensual synthetic media.

Even if you didn’t intend harm, your brand becomes the distributor.

2) Brand safety failures in AI-generated creative

AI tools can output content that crosses cultural or legal lines—especially across borders. What’s “edgy” in one market can be illegal or reputationally toxic in another.

Indonesia’s enforcement focus around immoral/deepfake content is a reminder that local norms and laws matter.

3) Moderation and response-time expectations

Kemkomdigi highlighted stronger moderation and faster response processes for reports. For SMEs, translate that into: you need a takedown and escalation process, not just a social media calendar.

If something goes wrong, speed is the difference between “handled” and “headline.”

A useful rule: If AI can publish at scale, your review process must operate at speed.

A simple AI governance checklist for SME marketing teams (that actually gets used)

You don’t need a 40-page policy that nobody reads. You need clear decisions and repeatable steps.

1) Decide what your team will never generate

Put hard lines in writing. Examples:

• No AI-generated or AI-edited images of real people without written consent
• No sexualised content involving youthful-looking subjects, even if “fictional”
• No “before/after” transformations using real customer images unless legally cleared

This is where most companies get this wrong: they try to moderate outcomes instead of restricting high-risk use cases.

2) Build a two-step approval for high-risk assets

If content includes any of the following, require a second reviewer:

• a real person’s face or body
• medical/financial claims
• content targeted to Indonesia (or other regulated markets)
• content involving minors, schools, or family themes

Keep it lightweight: one extra reviewer, one checklist, one decision.

3) Require source tracking for every AI asset

Your team should be able to answer these questions in 60 seconds:

• Which tool created it?
• Who prompted it?
• What inputs were used (photos, names, brand kit)?
• When was it published, where, and by whom?

This matters because when regulators or platforms ask for cooperation, “we don’t know” is the worst possible answer.

4) Add a “report-and-freeze” workflow

Create a simple playbook:

1. Acknowledge report within 2 hours (internal SLA)
2. Freeze the asset (stop ads, unpublish post, pause automation)
3. Review with a designated owner (marketing lead + ops/HR or legal contact)
4. Document actions taken

In practice, this is what protects you during a crisis.

5) Align your agency and freelancers

If your vendor produces AI creative for you, include AI usage terms in your SOW:

• prohibited use cases
• consent requirements
• asset provenance expectations
• liability and rework clauses

It’s not about being difficult—it’s about not inheriting someone else’s shortcuts.

How to market in Indonesia without AI headaches

If Indonesia is in your 2026 growth plan, treat AI compliance as part of market entry—not an afterthought.

Start with “local-first” content rules

The safest approach is to define Indonesia-specific rules for:

• imagery (especially people, attire, and sensitive themes)
• language tone and claims
• user-generated content policies
• influencer content approvals

Then configure your AI tools around those rules (templates, prompt libraries, blocked topics, and review workflows).

Keep your AI outputs boring where it matters

This is my unpopular opinion: for regulated or culturally sensitive markets, boring is profitable.

Use AI for:

• summarising customer feedback
• drafting neutral ad variants
• translating and localising with human review
• generating product descriptions that stick to facts

Avoid AI for:

• realistic human image generation
• “spicy” engagement bait
• controversial meme formats

Prepare for “feature restrictions” and platform volatility

Indonesia warned about potential administrative sanctions, including suspension or termination of access to Grok AI services and even the X platform locally if compliance fails. That’s a reminder that platform availability can change fast.

For SMEs, hedge risk by:

• building an owned audience (email + WhatsApp opt-ins where appropriate)
• diversifying paid channels
• keeping creative assets portable

What this means for the “AI Business Tools Singapore” series

AI tools are becoming core infrastructure for Singapore SMEs—especially in marketing. The trade-off is that marketing speed now comes with governance obligations.

The Grok AI situation in Indonesia is a real-world example of where Southeast Asia is heading: not “ban AI,” but “prove you can control it.” If you get ahead of this, you won’t just avoid trouble—you’ll run smoother campaigns, ship more consistent creative, and respond faster when things go wrong.

The companies that win in 2026 won’t be the ones using the most AI. They’ll be the ones using AI with the cleanest controls.

Next steps for SMEs (and a quick self-audit)

If you want a practical starting point, run this 15-minute audit on Monday:

1. List every AI tool your marketing team touches (including agency tools)
2. Circle anything that edits or generates images of real people
3. Add a second-approval step for those assets starting this week
4. Write a one-page “AI usage rules” doc and pin it in your team channel

If Indonesia is a target market, ask yourself one forward-looking question: If a regulator asked how your business prevents AI misuse, could you answer confidently without scrambling?