AI, Not Just Apps: ASEAN Businesses Push Beyond “First-Gen” Digitalisation

ASEAN’s digital transformation story is entering a new phase as governments and corporates move from basic digitisation—putting services online and adopting cloud—to integrating artificial intelligence into core processes. A recent policy brief from ASEAN‑BAC and multiple regional conferences suggest that the question is no longer whether businesses will adopt AI, but how quickly and responsibly they can do so.​

The ASEAN‑BAC paper on “Artificial Intelligence and Digital Transformation in the ASEAN Region” argues that AI could add between 10 and 18 percent to regional GDP by 2030 if adoption is broad and well‑managed. It notes that member states are at different stages: Singapore and Malaysia have relatively advanced AI ecosystems, with strong cloud infrastructure and research capacity, while others are still focused on basic connectivity and digital‑skills gaps. Even so, interest in AI pilots spans the region, from chatbots in public services to predictive maintenance in manufacturing.​

Recent events in Malaysia and Vietnam underscore this shift. At Malaysia’s AI Transformation for Security Symposium 2025, officials laid out plans to use AI for border control, crime detection and citizen services, highlighting both the potential and the need for robust governance. In Vietnam, TECHFEST 2025 showcased startups using computer vision and machine‑learning to improve logistics, healthcare diagnostics and agritech, with investors urging founders to think beyond simple app‑based services.​

However, ASEAN‑BAC and other observers warn that AI adoption is hampered by uneven data quality, fragmented regulations and limited access to compute resources. Most SMEs lack in‑house data scientists, and many corporates still operate siloed legacy systems that make data integration difficult. To address this, the paper calls for regional cooperation on standards for data sharing, privacy and cross‑border flows, building on the emerging ASEAN Digital Economy Framework Agreement (DEFA).​

The private sector is quietly moving ahead. Banks, telcos and large conglomerates are deploying AI for credit scoring, fraud detection, customer analytics and process automation. Cloud providers and global software firms are pushing “AI‑as‑a‑service” offerings that bundle models, tools and governance frameworks for regional clients. Yet there is a growing recognition that imported solutions must be adapted to local languages, norms and regulatory expectations—not all AI models trained on Western data will work well in Southeast Asian contexts.​

For ASEAN policymakers, the challenge is to create an environment where AI can flourish without exacerbating inequality or undermining trust. That means investing in digital‑skills programs, supporting open‑data initiatives, and ensuring that AI regulations are clear but not stifling. It also requires collaboration with the private sector to test frameworks in sandboxes and pilot projects before scaling them up.​

The next few years will be critical. If ASEAN can move from isolated AI experiments to broad‑based deployment supported by interoperable rules and infrastructure, the region may capture a meaningful share of global AI‑driven value creation. If not, it risks becoming primarily a consumer of foreign AI products, with less control over standards, data and economic returns.