In the global race for artificial intelligence (AI) development, Southeast Asia is emerging as an unexpected contender. Traditionally, discussions around AI innovation have focused on the United States and China, but Southeast Asia’s unique combination of adaptability, dynamism and strategic investments is positioning it as a critical player in shaping the AI landscape.
Characterised by targeted investments in infrastructure, localised innovation and government-backed strategies to foster growth, the region is narrowing the gap by establishing AI-ready data centres, creating tailored language models and encouraging cross-sector collaboration. Its focus on addressing real-world challenges also makes it a player to watch.
The region is one of the world’s most economically significant, and its young and burgeoning middle class of 200 million people is the driving force behind its rapid digital transformation. Last year, Southeast Asia’s digital economy achieved US$11 billion in profits, up from US$4 billion just two years before. By 2050, Indonesia is projected to become the world’s fourth-largest economy, while Malaysia and Thailand are expected to have economies exceeding US$1 trillion each.
Substantial investments in digital infrastructure underpin this growth. In the first half of last year alone, over US$30 billion of investments were committed to building AI-ready data centres in Singapore, Malaysia and Thailand.
These efforts are creating advanced computing capabilities and positioning the region as a global leader in AI-driven innovation. Fuelled by a digitally adept population, countries and businesses are seeking AI solutions to address societal and industrial challenges.
Southeast Asia is carving a unique niche in AI by focusing on both practical applications and collaborative innovation across industries such as logistics, healthcare and education. AI start-ups in the region are working on solutions that can enhance operational efficiency and safety compliance.