As stated in saying, “Data is the new currency.” This is especially true today as Artificial Intelligence (AI) unleashes business transformation and drives an incredible surge in data demand across Southeast Asia.
At the same time, data and AI capabilities are becoming assets of national strategic importance, especially in a world with increasing geopolitical tensions.
These convergent trends raise several questions. Where can I find all this data? How can Southeast Asia quickly build the required data and energy infrastructure while managing risks? What role will Singapore's public and private sector play in shaping the next stage in the region's digital economy?
New Value Chain
Looking at the hype, it's clear that AI is a trillion dollar game set to drive 3.5% of global GDP in 2030. Next-generation AI applications evolve beyond mere pattern recognition capabilities, generating new multimedia content and even act autonomously.
This critical function as a core input – the use of multiple modalities such as images, audio, video, and more, is converted.
Applications include AI tools to respond to changes in manufacturing, mobility and logistics environments, and chatbots that adjust recommendations to consumers based on visual data.
BT in your inbox
Deliver the latest news stories and analysis directly to your inbox, starting and ending daily.
In addition to the rise of next-generation AI applications, it is a value chain that is emerging to support it. This is to extend the platforms and infrastructure that enable AI to create and deploy generated content, as well as infrastructure, to power and scale platforms and applications.
In particular, the explosion of data volumes and real-time processing needs has driven an urgent need for data centers optimized to process vast streams of high-resolution image data beyond plain text.
Data and AI as a strategic asset
The rapid emergence of the AI value chain is occurring at a time when geopolitical tensions are rising. There, data and AI sovereignty is a strategic and important issue, including Southeast Asia.
The sovereign cloud has been a major focus area in recent years, with governments increasingly aware of the power of data and the ability to store, process and protect on land.
Now, with the rise of AI, sovereign AI is another important priority. As export controls encourage AI chips and the wider AI ecosystem to develop unique capabilities, nation-states find value by having ownership over AI capabilities.
In Southeast Asia, governments are competing to attract investment, build hyperscale advanced data centers and subsidize land and electricity, suggesting an intensifying competition to develop such an AI ecosystem.
In addition to national security, local AI capabilities are valuable as they are tailored to a specific context.
For example, large-scale language models (LLMs) “speak” Southeast Asian slang languages can address underrepresentation in models commonly used today. Another example is in healthcare. Here, AI tools trained with representative data from local residents are important to ensure accuracy.
Singapore as a regional AI leader
Singapore was the early initiator of AI, unveiling its first national AI strategy in 2019 and its second iteration in 2023.
The city-state also led the development of an ASEAN guide on AI governance and ethics, promoting the deployment of AI-powered services and solutions in a reliable way across borders. As the sector continues to evolve, such an approach to regulation is important in protecting society and its customers.
From a sustainability perspective, Singapore is promoting the development of green data centres and strengthening its green energy deployment while supporting research into energy-efficient technologies.
At the same time, it is equally important for the country that these ambitions balance the competitiveness of costs amid the demand for affordable, scalable solutions.
The government also works with multinational companies to occupy the position as a regional AI hub with comprehensive incentives and grants, including reimbursable investment credits. The recently launched Global Founder Program is set to encourage the founder of AI Ventures to move to Singapore and expand its business locally with support from the Economic Development Committee on Market Strategy and Networking.
Additionally, Singapore will work with 100 major companies to set the excellence of its AI centres. Such hubs have multiplier effects in terms of employment opportunities and knowledge transfer, and benefit startups and small businesses.
The partnership with global technology leaders is expanding to the development of terrestrial AI data centers and local LLMS, another proof point of AI leadership.
Opportunities to collaborate
Although Singapore has a strong AI ecosystem, it faces natural constraints not only in terms of land and electricity resources, but also in terms of market size. This makes regional cooperation and investment important.
The region's strong user base and thriving digital economy will make it a bright place for growth. Southeast Asia has a population ahead of the curve when it comes to adopting AI tools. Singapore can take the lead by promoting initiatives to develop talents that are not only technically skilled, but also have the human understanding and adaptability they need to work effectively with AI.
Apart from talent, infrastructure is another important factor. Investing in AI-Reaid data centers not only allows for constantly on data processing capabilities, but also helps to capture the ripple effects of job creation and innovation within the region.
Amidst increasing data regulations, the sovereign AI infrastructure also ensures that data and capabilities remain on land. However, many of the existing data centers in the region do not have the high-performance graphics processing units needed for the intensive workloads needed for next-generation applications.
Furthermore, power consumption by data centers in Southeast Asia is expected to more than double between 2025 and 2030, driven by power-intensive AI requirements. To deal with this surge, new generation capacity is needed to get online not only quickly but also sustainably.
Eight of the 10 ASEAN member countries have set net zero greenhouse gas emissions targets, as does the engineers behind the data center infrastructure. Cooperation between Singaporean organizations and other regions will help us achieve these sustainability goals while maintaining competitiveness in the global market.
To address this, government cooperation to advance the ASEAN power grid is important to meet the growing demand for large, reliable, sustainable energy, along with private investment in renewable energy.
Public and private sector players, especially in the technology and communications sector, can also work together to advance connectivity infrastructure such as AI-Reaid data centers, submarine cables, and 5G networks.
Local partnerships and investments are already in shape. Singapore's telecommunications and energy players are currently exploring opportunities in the economic zones of Batam and Johor Singapore.
Nevertheless, the scale of market opportunities means there is important space for further collaboration, both in terms of knowledge exchange and infrastructure development. Opportunities are available in areas such as sustainability, data center technology, talent preparation, and risk management.
Let's move forward together
Southeast Asia has both a demand and ambition to harness the potential for AI transformation. However, along with the regional infrastructure gap, the speed of technical and regulatory change means that public and private sector leaders across the value chain must act quickly.
Singapore is good for leading AI innovation, but it cannot advance on its own. Cross-border cooperation and investment are key to shaping the future of AI as a factor in regional growth.
This could begin with projects aimed at the public interest, such as the development of AI databases in healthcare and efforts to grow scalable, cost-competitive green power. These efforts build trust and pave the way for the community to move forward together.
The author is the CEO of Deloitte Southeast Asia
