Most companies in South-east Asia that have invested in artificial intelligence (AI) are struggling to translate adoption into measurable financial gains, even as many commit a significant share of their technology budgets to AI initiatives, according to a new regional report released on Feb 11.<\/p>\n\n\n\n
The findings come from \u201cAI in Southeast Asia: An Era of Opportunity\u201d, produced by McKinsey & Company, Singapore\u2019s Economic Development Board (EDB) and Tech in Asia, based on interviews with executives from 330 companies across Indonesia, the Philippines, Singapore, Thailand and Malaysia.<\/p>\n\n\n\n
The survey, conducted between July and August 2025, found that more than three in five companies allocated between 11 per cent and 40 per cent of their technology budgets to AI initiatives.<\/p>\n\n\n\n
Yet 18 per cent of respondents reported no discernible earnings impact, while more than three in five said AI contributed less than 5 per cent of total operating profit.<\/p>\n\n\n\n
At the report launch in Singapore, McKinsey partner Vivek Lath said underwhelming results may reflect companies prioritising the wrong applications or investing in initiatives that do not reshape end-to-end work processes.<\/p>\n\n\n\n
He also pointed to employee adoption as a factor, noting that isolated AI trials \u2014 such as basic chatbots or searchable internal repositories \u2014 may deliver limited value if they are not integrated into core workflows designed around specific business outcomes.<\/p>\n\n\n\n
EDB\u2019s summary of the findings similarly highlighted uncertainty around returns as a key barrier to scaling AI, alongside technical and organisational challenges involved in integrating AI into existing systems.<\/p>\n\n\n\n
The report\u2019s launch also highlighted persistent talent constraints in the region. EDB said survey data showed one in five executives identified talent as the single biggest challenge in scaling AI and delivering measurable impact.<\/p>\n\n\n\n
Singapore\u2019s Minister for Digital Development and Information Josephine Teo said at the event that Singapore\u2019s approach to defining and building AI talent is evolving as the technology ecosystem becomes more complex, and signalled changes that were set to be announced at Budget 2026.<\/p>\n\n\n\n
The report\u2019s authors said the gap between rising AI investment and limited bottom-line impact underscores the need for stronger foundations \u2014 including talent, data readiness and integration capabilities \u2014 if companies are to move beyond pilots and capture broader enterprise value from AI adoption.<\/p>","protected":false},"excerpt":{"rendered":"
Most companies in South-east Asia that have invested in artificial intelligence (AI) are struggling to translate adoption into measurable financial gains, even as many commit a significant share of their technology budgets to AI initiatives, according to a new regional report released on Feb 11. The findings come from \u201cAI in Southeast Asia: An Era […]<\/p>\n","protected":false},"author":4,"featured_media":3536,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-3535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"blocksy_meta":[],"yoast_head":"\n