East Ventures, a venture capital firm in Southeast Asia, has released a white paper titled “AI-first: Decoding Southeast Asia Trends.”

The document analyzes the influence of AI, particularly generative AI (GenAI), on the region’s business environment. The report notes the increasing global adoption of GenAI.

Projections indicate that 25% of businesses will implement the technology by 2025, rising to 50% by 2027.

Additionally, it estimates that AI could contribute a 10% to 18% increase in Southeast Asia’s GDP by 2030. This is despite the region currently attracting a limited share of global AI investments.

East Ventures highlights potential growth opportunities in AI’s downstream applications across various sectors.

The firm aims to support “AI-first” startups, focusing on the development of GenAI solutions tailored to local needs.

The white paper includes examples of how companies within East Ventures’ portfolio are integrating AI into their operations. It is available for download in both English and Indonesian on the firm’s website.

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🔗 Source: East Ventures

🧠 Food for thought

1️⃣ Southeast Asia shows uneven AI maturity despite high potential

While East Ventures highlights the transformative potential of AI, current adoption rates reveal significant disparities across the region.

Only 23% of Southeast Asian organizations are considered “transformative” in their AI adoption, with Singapore leading while Malaysia and Thailand are still developing their capabilities 1.

This uneven landscape presents both challenges and opportunities, as the region works to close the gap between AI’s promise and implementation reality.

The barriers to effective AI adoption are substantial, with 40% of respondents citing untrustworthy data as a reason for AI failure, followed by privacy concerns (38%) and skilled personnel shortages (41%) 1.

Indonesia stands out with the highest AI adoption rate in Southeast Asia at 24.6% as of 2018, positioning it as a potential regional leader if these implementation challenges can be addressed 2.

2️⃣ Government policy frameworks becoming critical differentiators

Southeast Asian nations are increasingly recognizing that strategic government support determines AI development success.

Indonesia’s approach demonstrates this trend, with President Joko Widodo emphasizing the importance of AI and implementing a National Strategy for Artificial Intelligence with a roadmap extending to 2045 2.

This comprehensive approach identifies five priority sectors—health services, bureaucratic reform, education, food security, and mobility—creating clear focus areas for AI implementation 2.

Vietnam has similarly prioritized AI in its digital strategy, offering incentives and fostering public-private partnerships that have helped attract nearly US$80 million in private funding for AI startups in 2024 alone 3.

The ASEAN Digital Economy Framework Agreement represents a regional effort to create a more inclusive digital economy while addressing regulatory challenges that have historically hampered cross-border technology adoption 4.

3️⃣ AI investment thrives despite broader funding winter

East Ventures’ AI focus aligns with a remarkable investment pattern shift across Southeast Asia’s technology landscape.

While overall capital raised across Southeast Asia has plummeted to $1 billion in early 2025—an 87% decline from the previous year—AI-specific funding has increased by 217%, demonstrating strong investor confidence in this sector 5.

This targeted investment surge coincides with substantial infrastructure commitments, with over US$30 billion allocated to building AI-ready data centers in countries like Singapore, Thailand, and Malaysia in the first half of 2024 alone 4.

Singapore-based AI startups are leading the funding race, with notable companies securing substantial investment rounds that reflect the city-state’s dominance in the regional AI ecosystem 5.

The deep tech sector reveals similar patterns, with AI becoming a foundational layer across multiple industries even as overall deep tech funding dropped 34% to $801 million, highlighting AI’s resilience and strategic importance even during challenging economic conditions 6.

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