How AI is quietly powering Southeast Asia’s new wave of profitable growth
The region is not the loudest in the global AI conversation, but it's becoming one of the most productive.
Southeast Asia's digital economy was pursuing scale just two years ago, but it was not making much money. By 2024, however, the story seems to be changing. Digital profits in the region have almost tripled, from US$4 billion in 2022 to US$11 billion in 2024, according to the most recent e-Conomy SEA report.
This turnaround cannot be explained in a single way. But one driver keeps showing up across industries, markets, and case studies: artificial intelligence (AI). Not as a buzzword, but as an engine quietly transforming workflows, improving margins, and unlocking entirely new business models across Southeast Asia.
The productivity lift is already measurable
AI’s potential upside isn’t theoretical anymore. One report from East Ventures suggests that AI could contribute up to ~$1 trillion to Southeast Asia’s GDP by 2030. That represents a 13% boost, with gains spread across retail, manufacturing, agriculture, healthcare, and finance.
We’re already seeing the signals in a few sectors. In e-commerce, for example, AI-powered product recommendations are improving conversion rates by as much as 30%. In the banking and legal services sector, automation has cut processing times by 24% and improved operational efficiency by up to 18%.
Emmanuel Oyedeji
Healthcare is also improving as AI diagnostic tools are said to be reducing patient wait times by 34%, while predictive systems in manufacturing are boosting output efficiency by 22% and reducing downtime by 17%.
Even agriculture, often underrepresented in tech conversations, is showing results. Across Vietnam and Indonesia, AI-powered precision farming is increasing crop yields by up to 32% while cutting water usage by 28%.
But some countries are moving faster than others
Southeast Asia isn’t a monolith. While the AI wave is regional, adoption varies country by country.
Singapore is clearly ahead of the pack. In 2024, 46% of enterprises there reported using AI, up from 34% in 2022. The government is also backing that push with a $770 million AI investment plan through 2029 and a strong regulatory framework that’s already attracted big names. For instance, OpenAI now runs its Asia-Pacific (APAC) hub from Singapore, and Microsoft launched its first AI research lab in the region, there.
Just across the border, Malaysia is shaping up as the region’s infrastructure backbone. Tech giants like Microsoft, AWS, Oracle, and ByteDance have pledged over $22 billion to build AI-ready data centers across the country. Google’s own investment is expected to contribute $3 billion to Malaysia’s economy and create 26,500 jobs by 2030.
Elsewhere, Indonesia, Thailand, Vietnam, and the Philippines are gaining speed. Indonesia alone could see a US$366 billion GDP uplift from AI by 2030, while Thailand and Malaysia each stand to gain over US$115 billion. The Philippines and Vietnam are projected to add between US$90–110 billion each.
We can see that the numbers aren’t evenly distributed, but they signal a region-wide shift in where growth is coming from.
Generative AI is speeding up returns
One of the most surprising elements of Southeast Asia’s AI shift is just how quickly value is being realised.
According to the e-Conomy SEA 2024 report, seven in ten companies that adopted generative AI saw positive ROI within 12 months. And many went from pilot to production in under six months, unusually fast by global standards.
Customer service teams are also slashing support times by 40% using GenAI-powered chatbots. SaaS and fintech firms are reducing reconciliation efforts by 35% through AI analytics. In education, AI-driven tutoring and content platforms are improving learning outcomes by up to 90%, thanks to adaptive learning systems tuned to student performance.
AI in Southeast Asia isn’t stuck in research and development (R&D). It’s already boosting profit and loss statements (P&Ls).
Emmanuel Oyedeji
So, what’s making this possible?
Three big factors are driving Southeast Asia’s AI momentum.
First is infrastructure. Over US$30 billion has already been committed to building AI-ready data centers across Singapore, Malaysia, and Thailand. Cloud services, GPUs, and energy-efficient computing setups are laying the technical groundwork for scalable AI deployment.
Second is policy support. Singapore, for instance, has been exploring how to govern AI responsibly for a while now, and Malaysia now even has a National AI Office. Across Southeast Asia, government-led sandboxes are giving startups and companies room to test AI ideas without getting tangled up in regulatory red tape. Plus, with Big tech players like Google also stepping in with a $5 million grant to the ASEAN Foundation, AI literacy across the region is getting a boost.
Third is culture and consumer readiness. As shown by a 2024 survey by the ASEAN Foundation, Southeast Asians seem to be more optimistic about AI than most global regions. In Indonesia, for example, 80% of people believe AI will do more good than harm. In Thailand, it’s 77%. That optimism translates into faster adoption, fewer regulatory pushbacks, and a wider talent pool eager to learn AI skills.
But what could slow things down?
For one, access to infrastructure could, as that isn’t evenly distributed, and many rural areas lack the connectivity needed to use cloud-powered AI tools.
Talent shortages, especially in technical roles like machine learning engineering, could also widen as demand outpaces supply. Plus, while some countries are advancing on governance, others are still figuring out how to balance innovation with oversight.
Then, there’s the question of concentration. If infrastructure and investment are heavily focused on Singapore and Malaysia, will smaller economies get left behind?
Louis Eriakha
Conclusion
What makes Southeast Asia’s AI story unique isn’t just the scale of investment but how quickly that investment is translating into value. While other regions debate the ethics and guardrails, Southeast Asia is quietly building and profiting.
Of course, risks remain. But if the region can close its infrastructure gaps, invest in AI talent, and maintain regulatory momentum, it won’t just be reacting to global trends. It might just be setting them. And that may be the biggest shift of all.
