With the new wave of artificial intelligence triggered by ChatGPT, the launch of various large models, and the commercial application on a larger scale, people have never focused on the AI field, and the market is developing rapidly. In recent years, the penetration rate of the digital economy in Southeast Asian countries has been increasing, which has also made people see the great role of AI in Southeast Asia, and the broad market prospects have also made large manufacturers bet.
Artificial intelligence giants focus on Southeast Asia
Recently, Southeast Asia has ushered in the investment of global technology giants for many times, which has attracted market attention. On May 7, AWS, Amazon's cloud service platform, announced that it will nearly double its investment in Singapore to S$23.5 billion in the next four years (until 2028). In this regard, AWS said that it hopes to further meet the growing demand for cloud services and accelerate the adoption of artificial intelligence through the construction of cloud and artificial intelligence infrastructure. Not long ago, Microsoft announced similar plans to invest nearly $4 billion in cloud and artificial intelligence infrastructure in Southeast Asia over the next four years, and has developed long-term development plans for some of these countries.
Why is the spotlight on the AI stage turning to Southeast Asia?
In fact, AI is not a new industry in Southeast Asia, and before the wave of large models, Southeast Asia was engaged in the simplest AI job - data annotation due to its abundant and low-cost labor force. According to the data, data labeling belongs to the upstream data production link, providing "raw materials" for downstream AI algorithm companies. Both supervised and semi-supervised learning in machine learning need to learn from manually labeled data, and the training, validation, and test sets are all labeled data. According to media reports, data annotation is regarded as an assembly line factory in the AI field, usually concentrated in Southeast Asia, Africa, or regions with abundant human resources.
Image source: Science and Technology Cloud check-in
In recent years, with the continuous improvement of network infrastructure in Southeast Asian countries and the continuous development of technology enterprises, the country is also vigorously developing the field of artificial intelligence. For instance, in 2019, Singapore became one of the first countries to publish an AI strategy when it released its first National AI Strategy. In 2023, the National AI Strategy 2.0 was further launched, outlining 15 new regulations for the next three to five years, including AI-specific training programs, AI-specific physical space, and allocating adequate carbon budgets for data centers. In 2022, Thailand released the Thailand National Artificial Intelligence Strategy and Plan (2022-2027). The core goals include the establishment of data centers and the development of at least 30,000 AI-related talents by 2027, including the goal of cultivating 200-300 AI experts.
Overall, as in other markets around the world, AI has great promise in Southeast Asia. According to Statista, the market size of the AI industry in Southeast Asia was $32.64 billion in 2022. This figure is expected to grow to $580.8 billion by 2030. At the same time, the market size of generative AI in Southeast Asia has also grown significantly, from $630 million in 2022 to $1.41 billion in 2023 and is expected to grow to $7.65 billion by 2030.
China and the United States face off against each other
In Southeast Asia, AI development is in the ascendant, and countries throughout Southeast Asia are actively embracing AI, and the two AI whirlwinds of China and the United States are also converging in Southeast Asia. In addition to overseas technology giants such as Amazon, Microsoft, and Nvidia, more companies from China, such as Alibaba, Tencent, Huawei, and iFLYTEK, are also investing in the Southeast Asian artificial intelligence market.
From the perspective of subdivisions, Southeast Asia has become one of the main battlefields for the confrontation between China and the United States. In June 2023, iFLYTEK will hold a product launch conference and iFLYTEK AI TechDay Singapore Station in Singapore with the Xinghuo cognitive model and C-end intelligent hardware, making Southeast Asia the first stop and strategic center of iFLYTEK's overseas business. At the end of 2023, Ali DAMO Academy also launched the first version of the AI large model based on Southeast Asian language training, SeaLLM, and the chat version SeaLLM-chat, which supports most official languages in Southeast Asia, including Thai, Vietnamese, Indonesian, Malay, Lao, etc.
Image source: Screenshot of SeaLLM website
In addition to Chinese companies increasing their investment in Southeast Asia, American companies are also investing heavily.
On May 2, Microsoft announced that it would invest US$2.2 billion over the next four years to support Malaysia's digital transformation. The investment includes building cloud, AI infrastructure in the region, providing skills training opportunities for 200,000 local residents, and establishing a national AI Center of Excellence to enhance local cybersecurity capabilities and support the development of local developer communities. At the same time, Microsoft announced plans to develop cloud and AI infrastructure in Thailand, including the opening of the country's first regional data center in Thailand, but did not disclose the exact amount of investment. Previously, Microsoft also announced that it would invest US$1.7 billion over the next four years in Indonesia to build new cloud computing and AI infrastructure, including AI skills training for 840,000 Indonesians and support for the country's growing developer community.
Nvidia CEO Jensen Huang is also betting on the Southeast Asian AI market. In December 2023, NVIDIA CEO Jensen Huang met with Vietnamese Prime Minister Pham Minh Chinh and pledged to build a semiconductor base in Vietnam to make Vietnam a second home for NVIDIA. In February, Singtel announced that it had joined NVIDIA's partner network cloud program and would bring NVIDIA's full-stack AI platform to businesses in Singapore and Southeast Asia. In April, Nvidia announced it would build an artificial intelligence development center in partnership with Indonesia's second-largest mobile telecommunications company, Indosat, and both companies pledged to invest $200 million in the facility. In the same month, Vietnamese tech giant FPT entered into a strategic partnership with Nvidia, in which the two sides plan to invest 200 million yuan to build an artificial intelligence factory using Nvidia's technology.
Nvidia has partnered with Indosat, Indonesia's second-largest mobile telecommunications company
Image source: IDC Circle
AI empowerment, the new future of e-commerce in Southeast Asia
For more enterprises, AI in Southeast Asia has been increasingly embedded in various devices, services, and platforms, and the application scenarios are gradually expanding. Since the launch of ChatGPT in November 2022, generative AI technology has been highly valued in the business world. Since 2022, interest in generative AI has never been more enthusiastic among Southeast Asian companies.
Today, major sectors such as e-commerce, automotive, and food and beverage in Southeast Asia are benefiting from the development and application of AI to create marketing content, summarize reports, manage schedules and emails, and analyze data. In the F&B industry, for example, Pizza Hut Singapore used artificial intelligence Midjourney to generate advertising posters last year to save marketing costs and offer consumers discounted products, which won a lot of praise from consumers.
In the field of e-commerce and games, Chinese companies have been deployed in Southeast Asia for many years. Alibaba's Lazada, Tencent-invested Shopee, and ByteDance's Tiktok Shop are already important e-commerce platforms in Southeast Asia. Game manufacturers such as Lilith, Mutong Technology, Tencent Games, and miHoYo have also produced and released many high-quality games in Southeast Asia, accumulating a large number of loyal fans. The further development of AI technology will undoubtedly become an innovative force for Southeast Asian e-commerce and game enterprises going overseas.
Image source: Lanxiang Network, Thailand
Among them, AI is more widely used in the field of e-commerce in Southeast Asia, and voice customer service and chatbots provide merchants with higher efficiency and reduce labor costs. According to the data, 49% of Southeast Asian consumers prefer to choose brand shopping with a personalized experience. E-commerce platforms such as Lazada and Shopee are also using AI tools to improve consumers' personalized shopping experience. Southeast Asian fashion retailer Zalora is using AI to create style profiles for customers, optimize search for recommended products, and reportedly increase conversion rates by 4-6%, and the company is also integrating OpenAI into its warehouse management system to provide a more efficient delivery experience.
In the retail sector, companies such as Uniqlo and Sephora are also launching virtual try-on options and personalized product recommendations in Southeast Asia. In the future, the e-commerce sector in Southeast Asia will focus on the application of AI in chatbots, AI-powered return solutions, identifying fraudulent activities, AI services to improve customer retention, and graphic and video marketing.
On the whole, whether it is the bet of AI giants on Southeast Asia, or the R&D and implementation of AI by local enterprises, it shows that Southeast Asia is increasingly integrated into the global map, and at this stage, Southeast Asia is playing an increasingly prominent role as a hub, and this factor may also accelerate the entry of giants. In reality, Southeast Asia, as an emerging market, still has more to go to do.
Sources: Whale Dimension, Moving Point Out to Sea, 7:5 Degrees, Xiaguang Society, etc
❖ END ❖