Thailand's draft AI law risks stifling local startups unless it balances regulation with clearer liability rules, IP protection, and practical support. The AI startup community, representing 676 new firms in the past 2.5 years, warns that burdensome compliance costs disproportionately harm small firms and may deter domestic buyers from choosing Thai solutions over established foreign providers. The law should reflect Thailand's economic context and include mechanisms like regulatory sandboxes, R&D exemptions, reduced certification fees, and prioritized access for local AI developers.