A cast Mg‐4.65Al‐2.82Ca alloy with a microstructure containing an α‐Mg matrix is studied, which is reinforced with a C36 Laves phase skeleton. Such ternary alloys are targeted for elevated temperature applications in automotive engines, since they possess excellent creep properties. However, in application, the alloy may be subjected to a wide range of strain rates, and thus accelerated testing is often essential. It is, therefore, crucial to understand the effect of such rate variations. Herein, their impact on damage formation is focused. The analysis is based on high‐resolution panoramic imaging using scanning electron microscopy, combined with automated damage analysis using deep learning for object detection and classification (YOLOv5). It is found that with decreasing strain rate the dominant damage mechanism for a given strain level changes: at a strain rate of 5 × 10−4 s−1, the evolution of microcracks in the C36 Laves phase dominates damage formation. However, when the strain rate is decreased to 5 × 10−6 s−1, interface decohesion, becomes equally important. A change in crack orientation is also observed, indicating an increasing influence of plastic codeformation of the α‐Mg matrix and Laves phase. This transition is attributed to the leading damage mechanism to thermally activated processes at the interface.