AI in Asia
Tuesday, 31 March 2026

3 Before 9

3 must-know AI stories before your 9am coffee

Who should pay attention

AI manufacturers | Supply chain managers | Data centre operators | Policymakers

What changes next

Governments and industry will explore innovative cooling solutions and sustainable energy models.

1

Asia Captures 62 Per Cent of Global AI Trade as Tariff War Reshapes Supply Chains

A McKinsey Global Institute report published last week found that AI-related goods exports - including semiconductors, data-centre equipment and processors - accounted for roughly one-third of overall trade growth in 2025, with Asia firmly at the centre of the boom. Taiwan, South Korea and parts of Southeast Asia supplied AI hardware to markets worldwide, with particularly strong flows to the United States. ASEAN countries saw exports jump nearly 14 per cent as Vietnam, Thailand and Malaysia absorbed supply chains displaced from China, while India increased smartphone exports to the US by $15 billion after China's share of US smartphone sourcing dropped 40 per cent. Despite US tariff rates sitting at their highest level since the Second World War, global trade grew faster than the world economy - driven in large part by the insatiable demand for AI infrastructure.

Why it matters for Asia

Asia now accounts for 62 per cent of total AI-enabling trade globally, cementing the region's role as the backbone of the world's AI build-out. For enterprise buyers and policymakers across Southeast Asia, this is both validation and warning - the region's manufacturing and logistics capabilities are now deeply embedded in AI supply chains, but continued dependence on geopolitically driven trade flows means any shift in US tariff exemptions for chips and semiconductors could send shockwaves through the corridor overnight.^

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2

Southeast Asia's Data Centres Race to Beat Tropical Heat as AI Demand Surges

Data centre demand across Southeast Asia is expected to grow 20 per cent annually through 2028, but the region's tropical climate - with temperatures ranging between 27 and 35 degrees Celsius year-round - presents a cooling challenge that temperate-climate operators simply do not face. Singapore responded in August 2025 by launching its Tropical Data Centre Standard, a set of guidelines allowing facilities to gradually increase operating temperatures to 26 degrees Celsius, with every one-degree rise translating to up to five per cent in energy savings. BDx Data Centres became the first firm to implement the standard earlier this month. The region currently hosts around 370 data centres concentrated in Singapore, Indonesia and Malaysia, but remains 70 per cent less penetrated than mature markets such as the US and China, leaving enormous room for growth if operators can solve the heat-and-humidity equation.

Why it matters for Asia

Amazon, Microsoft, Google, Alibaba and Tencent are all pouring billions into hyperscale facilities across the region, and Malaysia alone is adding eight gigawatts of gas-fired power capacity by 2030 to keep pace. For enterprise technology buyers in Asia, the message is clear - the region's AI infrastructure is scaling fast, but the winners will be operators that prove they can deliver efficient, reliable compute in a tropical environment. Singapore's $784 million AI research commitment and its new data centre standards are setting the benchmark that the rest of Southeast Asia will need to match.^

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3

Boao Forum Report Says Global AI Epicentre Is Shifting From the West to Asia

The Boao Forum for Asia's annual report, released on 24 March, declared that the global epicentre of artificial intelligence development is progressively moving from Europe and the United States toward Asia. The report found that Asian economies are rapidly evolving from AI followers into frontrunners by capitalising on substantial digital populations, diverse application ecosystems and coherent policy frameworks. China was credited with achieving full-chain industrial maturity and robust large-scale deployment capabilities, while Japan and South Korea were highlighted for their concentration on high-end manufacturing and industrial automation. Singapore was singled out as a model of application-driven advancement, playing a pivotal role in governance innovation and functioning as a regional platform hub.

Why it matters for Asia

The report's core argument - that Asia is transitioning from rule-taker to rule-participant in global AI governance - carries real commercial weight for enterprises operating in the region. As Asian governments move from importing AI frameworks to exporting technological solutions, companies building or buying AI across the Asia-Pacific will increasingly find themselves operating under locally shaped regulations, standards and procurement norms rather than defaulting to US or European models. The forum's call for a multi-node, interconnected and collaborative regional AI network signals that cross-border AI partnerships within Asia are about to accelerate.^

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That's today's 3 Before 9.

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