TL;DR:

• AI development in Asia has seen spending in reach $49.2 billion by 2026, with a CAGR of 24.5%
• China, Japan, India, South Korea, and Singapore leading AI development in various sectors
• Ethical AI development and regulation are key focus areas for Asian countries

Introduction: Asian AI Ecosystem

The global surge in Artificial Intelligence (AI) has transformed societies around the world. Asia, with its diverse cultural landscape and cutting-edge technology, is at the forefront of this revolution. This deep dive article delves into the dynamic AI ecosystem across various Asian countries, revealing how they are shaping the future of this technology.

Asian AI Investments

The AI landscape in Asia is as diverse as the continent itself. Leading countries like China and Japan are driving innovation with significant investments and advancements. Meanwhile, emerging markets like India and Southeast Asian nations are rapidly catching up. This diversity is further influenced by government policies, with some countries adopting AI more aggressively than others.

Traffic to ChatGPT in May 2023 (1):

Investment across Asia is staggering as governments and companies all try to maximise the abundant opportunities, riches and efficiencies (savings!) which AI offers:

• IDC reports highlight the rapid growth and diverse application of AI technologies in the Asia/Pacific region, emphasising its role as an AI innovation and investment hub.
• AI spending in the Asia/Pacific region is projected to reach $49.2 billion by 2026, growing at a CAGR of 24.5%.
• Key sectors leading in AI adoption include professional services, banking, and discrete manufacturing.
• Generative AI (GenAI) is gaining traction, with 26% of Digital Native Businesses in the Asia/Pacific region already invested.

The Impact of AI

AI is expected to have the largest impact in areas like product development/design, customer engagement, and sales and marketing. The top use cases for GenAI include code generation and knowledge management applications​​.

Future Projections for AI Spending

Looking ahead, the AI spending in the Asia/Pacific region is forecasted to surge to $78.4 billion by 2027, with a CAGR of 25.5% from 2022 to 2027. This increase is attributed to the shift towards leveraging cutting-edge technology to reimagine operations, enhance customer experiences, and maintain a competitive edge in a rapidly changing market. China continues to be a leader in AI adoption in the region, accounting for a significant portion of the total AI spending​​.

Country-Specific AI Developments

China:

• Government-backed initiative: China’s government has made AI a national priority, leading to remarkable growth. This initiative reflects a global urgency to create a strong legal framework for AI.
• Tech giants: Chinese tech giants like Alibaba and Tencent are driving AI research, focusing on areas like e-commerce and autonomous vehicles.
• Regulation: China is actively working on AI regulation, with plans to draw up new laws in 2023. For detailed insights, refer to the South China Morning Post’s article on China’s AI regulation plans. (2)
• AI in Various Sectors: A report by McKinsey & Company provides an in-depth look at the future of AI in China, covering areas such as enterprise software, healthcare, and life sciences. It also discusses China’s “14th Five-Year Plan” and its focus on AI in innovation McKinsey & Company. (3)

Japan:

• Generative AI in Japanese Firms: Major Japanese companies like SoftBank and Hitachi are actively developing and incorporating generative AI technologies into their businesses. SoftBank’s mobile unit, for instance, is working on developing a Japanese equivalent of ChatGPT, a move that highlights Japan’s efforts to catch up in the rapidly evolving field of generative AI​​. (4)
• Integration of AI in Robotics: Japanese companies are renowned for their ability to integrate various disciplines into a single technology, as demonstrated by SoftBank Robotics. They are working on integrating the “brain” of AI into the “body” of robots for various industrial and consumer applications. This includes efforts to robotize certain sectors, such as janitorial services, in response to Japan’s ageing workforce​​. (5)
• Smart Cities and AI Projects: The development of Smart Cities is a major initiative in Japan’s AI market. One notable project is Toyota’s Woven City, to be constructed at the base of Mt. Fuji. This “living laboratory” will test and develop technologies like autonomy, robotics, personal mobility, and smart homes. It aims to be a sustainable city powered by hydrogen fuel cells and designed for self-driving vehicles​​.
• AI-Powered Robots During Covid-19: The pandemic accelerated the adoption of AI in Japan, especially in areas like healthcare, where teleconsulting and virtual consultations became more prevalent. Robots produced by companies like SoftBank Robotics have been implemented to reduce human contact in various sectors, such as restaurants and healthcare, providing services that range from waiting to health monitoring​​. (6)

India:

• AI’s Impact on the Job Market: Goldman Sachs has noted the potential for AI to automate up to 300 million jobs globally in the near to medium term, which includes jobs in India’s vital services industry. This brings into focus the need for reskilling and identifying future job opportunities. The Indian government think tank, Niti Aayog, emphasises India’s unique approach to AI, where the focus is on addressing uniquely Indian challenges. This approach, known as #AIforAll, aims to integrate AI into the broader concept of technology for public benefit. It includes layers such as Aadhaar, UPI, data governance, and health as part of IndiaStack, which the government has been investing in for over a decade​​.
• Reskilling and Upskilling Initiatives: The transition towards AI in India raises questions about the adequacy of reskilling efforts to compensate for job losses. For example, there are around nine million individuals in India engaged in low-skilled services and BPO roles, and with the advent of AI, many of these jobs are at risk. Initiatives like FutureSkills PRIME, launched by the Ministry of Electronics and IT (MeitY) and NASSCOM, aim to reskill and upskill 1.4 million employees over five years. However, the magnitude of transformation required is vast, and these efforts represent only a fraction of the scale needed​​.
• Policy Development and AI Strategy: Indian AI policy is evolving to keep pace with rapid technological changes. Much of the government-level work on AI has been based on Niti Aayog’s discussion paper and subsequent strategy documents. However, there is a need for formalisation and adaptation to ensure that AI policy remains relevant and effective in a rapidly changing technological landscape​​. (7)

South Korea:

• Collaboration Between Major Companies and Academia: Major companies like Samsung and SK Hynix are increasingly collaborating with academia and research communities to advance AI technologies. Samsung Science & Technology Foundation has provided grants worth $40.12 million to various research projects, while SK Hynix has launched the “Semiconductor Academy,” offering lectures on a range of topics related to semiconductors​​.
• Fabless Startups and AI Hardware Accelerators: South Korea has witnessed the rise of fabless startups focusing on AI hardware accelerators. Companies like FuriosaAI, Rebellions, Sapeon, HyperAccel, OpenEdge, Mobilint, DeepX, and Telechips are developing AI accelerators for various applications, ranging from high-performance vision tasks in datacenters to solutions for edge devices and autonomous vehicles. For example, FuriosaAI’s Warboy prototype demonstrated significant performance gains over comparable GPUs, while Rebellions developed an AI accelerator for high-frequency trading​​. (8)
• Government Investment in AI Ecosystem: The South Korean government plans to invest 826.2 billion won ($632 million) by 2030 to develop a comprehensive AI ecosystem, focusing on indigenous high-end AI chips. This includes the K-Cloud Project, which aims to develop a neural processing unit (NPU) for AI data centres by 2025, enhancing data processing efficiency and speed compared to traditional CPUs and GPUs​​. (9)
• National Strategy for Artificial Intelligence: South Korea’s Ministry of Science and Information and Communications Technology is prioritising collaboration with private entities and academia to design and implement its National Strategy for Artificial Intelligence. This strategy focuses on developing AI applications that deliver explainable outcomes and decisions, combining AI with applied learning, and ensuring ethical AI development. Furthermore, the government has launched intensive training programs in AI for youth and government officials and incorporated basic AI education programs in public schools​​. (10)

Southeast Asia:

Countries like Singapore, Malaysia, and Thailand are emerging as significant players in the AI field. Their focus is on leveraging AI for local industry needs, from smart city solutions in Singapore to agricultural tech in Thailand:

• AI development is being approached with a focus on three key areas: enhancing AI capabilities for economic growth, improving AI-related skills and competencies, and establishing ethical and governance frameworks for AI applications.
• ASEAN is working on formulating an AI guide that emphasises these areas, with an expected release in early 2024. This guide will concentrate on ‘best practices by design’ rather than creating legally binding regulations.
• The initiatives in ASEAN countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, showcase a regional appetite for digital services, which may increase risks in an unregulated AI space.
• This indicates a growing reliance on AI applications across various sectors in the region, but without a legally binding piece of legislation, similar to the EU’s AI Act​​. (11)

Singapore:

• Large Language Models (LLMs): S$70 million flagship initiative to develop Southeast Asia’s first LLM ecosystem; SEA-LION model designed for cost-conscious businesses
• Accelerated AI Adoption: AI Trailblazers Initiative with Google Cloud to fuel AI adoption across public and private sectors; a focus on building a sustainable AI talent pipeline and nurturing home-grown startups (11)
• Shaping AI Governance: AI Verify Foundation established in Singapore, development of international AI standards and testing tools, tackling critical issues in generative AI and AI governance (12)
• Global AI Innovation Hub: Infineon Technologies invested S$27 million to make Singapore its global AI hub with AI integration across entire business and manufacturing operations and comprehensive employee training and collaboration with ecosystem partners (13)
• Responsible AI Development: Generative AI Evaluation Sandbox provides standardised assessment and monitoring with a commitment to responsible and trusted use of AI for a safer and more ethical future
• Investing in AI Talent: a national AI Strategy aims to triple the number of AI practitioners to 15,000, revamping the AI apprenticeship programme and expanding company attachments. (14)

Malaysia:

• Partnership with Nvidia: $4.3 billion investment in AI infrastructure, boosting Malaysia’s AI ecosystem and semiconductor manufacturing ambitions. First phase operational by mid-2024. (15)
• MOSTI Initiatives: National AI Roadmap launched to build a sustainable AI innovation ecosystem by 2025. Policy and Regulation Committee established to review existing laws and develop AI development standards. (16)
• AI Across Various Industries: Healthcare – AI enhances diagnostic accuracy and patient care through AI-powered medical imaging systems; Finance – AI detects fraud, assesses risk, and provides customer service via AI-driven chatbots; Agriculture – AI optimises crop yields and manages resources; Education – AI personalised learning experiences for students. (17)
• AI Roadmap (AIRmap): Aims to boost productivity by 30% across all sectors by 2030. AIRmap creates an AI innovation ecosystem, addressing national challenges and spurring growth through AI applications. (18)
• AI Potential in Specific Industries: Significant potential in accounting, legal, and healthcare. In accounting, AI automates tasks and enhances data analysis. In legal, AI assists with research and document drafting. In healthcare, AI improves diagnostics and patient care management. (19)

Thailand:

• ​​Social, Ethical, and Legal Framework: Develop AI ethics policies and standards, raise awareness through education programs, reach 600,000 citizens by 2027.
• Infrastructure Development: Improve compute capacity with HPC, build national AI expert network, establish national AI services platform, increase digital infrastructure spending by 10% annually.
• Education: Enhance AI-related university programs, educate the general public, generate over 30,000 AI talents in six years.
• AI Application and Technology Development: Develop 100 R&D prototypes in six years, create businesses with social impact, generate 48 billion Baht by 2027.
• AI in Governance: Make government services more transparent and accessible.
• Nectec’s Role: Facilitate AI development, connect AI technology with public sector, provide tools for Thai AI developers.
• AI Governance Guidelines: Manage risks and supervise AI-related operations, ensure ethical and responsible use of AI.

AI in Asia is A Fusion of Technology and Heritage:

Asia’s AI landscape is shaped by a unique interplay of cultural values and technological ambition. While aware of potential biases and regulatory hurdles, Asian nations are actively building frameworks for ethical AI development, fostering collaboration, and harnessing AI’s potential for economic growth.

Navigating the Regulatory Maze:

Rapid technological advancements and geopolitical considerations complicate AI regulation in Asia. Observing major powers like the US and China take dominant positions, smaller economies advocate for new international rules ensuring equitable access and data flow. Singapore leads the way, promoting regional cooperation and bridging the digital divide.

Striking the Ethical Balance:

Balancing public safety with privacy and civil liberties is key in Southeast Asia. Recognizing the risk of discriminatory outcomes due to biased data, ASEAN nations are developing a regional framework for ethical AI that respects cultural differences and promotes knowledge sharing.

A Tailored Approach to Governance:

ASEAN’s unique guide to AI ethics and governance prioritises flexibility and cultural nuances. Voluntary and business-friendly, it encourages innovation through R&D funding, contrasting with the stricter EU approach. This reflects the diverse regulatory environments of Southeast Asian countries.

A Promising Future for AI Development in Asia

Asia’s journey in AI, despite challenges, holds immense promise. By integrating AI with its rich cultural heritage, the region is poised to be a global leader in AI-driven innovation and economic prosperity. This journey offers valuable insights into the responsible integration of AI into the fabric of human society.

Comment and Share:

How can Asian countries maintain their unique cultural identities and ethical values while embracing the rapid advancements and global integration of AI technology, and what lessons can the rest of the world learn from their approach? Let uss know in teh comments below, and don’t forget to subscribe.

Further Resources for AI Development in Asia

For readers interested in delving deeper, a variety of resources are available, including industry reports, academic papers, and insights from AI conferences focused on Asian developments. Below is a list of reference sources to get you started.

1. https://www.idc.com/getdoc.jsp?containerId=prAP50532523
2. https://www.scmp.com/tech/policy/article/3223429/china-draw-ai-regulation-2023-beijing-races-against-eu-us-roll-out-new-laws-covering-technology
3. https://www.mckinsey.com/
4. https://www.japantimes.co.jp/news/2023/05/19/business/japan-generative-ai-initiatives/
5. https://www.aei.org/technology-and-innovation/japanese-ai-advances-offer-lessons-for-the-rest-of-the-world/
6. https://tokyoesque.com/ai-market-in-japan/
7. https://www.inventiva.co.in/stories/indias-ambitions-to-become-the-world-leader-in-ai-a-case-study-of-artificial-intelligence-with-indias-growing-population/
8. https://cacm.acm.org/magazines/2023/7/274057-south-koreas-nationwide-effort-for-ai-semiconductor-industry/fulltext
9. https://koreajoongangdaily.joins.com/2023/06/26/business/industry/KCloud-Project-cloud-semiconductor/20230626153808109.html
10. https://ibtekr.org/en/cases/how-south-korea-has-developed-a-world-leading-ai-ecosystem/
11. https://www.iseas.edu.sg/articles-commentaries/iseas-perspective/2023-65-aseans-new-dilemma-managing-the-artificial-intelligence-by-kristina-fong-siew-leng/
12. https://www.imda.gov.sg/resources/press-releases-factsheets-and-speeches/press-releases/2023/singapore-launches-ai-verify-foundation-to-shape-the-future-of-international-ai-standards-through-collaboration
13. https://www.edb.gov.sg/en/about-edb/media-releases-publications/infineon-to-make-singapore-its-global-ai-innovation-hub-by-2023.html
14. https://www.channelnewsasia.com/singapore/national-ai-strategy-artificial-intelligence-talent-iconic-site-3963971
15. https://www.reuters.com/technology/nvidia-talks-with-malaysias-ytl-data-center-deal-sources-2023-12-08/
16. https://practiceguides.chambers.com/practice-guides/artificial-intelligence-2023/malaysia
17. https://www.businesstoday.com.my/2023/09/23/the-growing-impact-of-ai-in-malaysia/
18. https://news.microsoft.com/en-my/2021/08/30/how-malaysia-can-navigate-its-future-economy-with-ai/
19. https://backspace.com.my/blog/artificial-intelligence/the-future-of-ai-in-malaysia/
20. https://www.opengovasia.com/articles/thailands-ai-governance-transformation