Executive summary
Companies in the Asia-Pacific region have been slower to get started with generative AI and their spending is lower, but they are spending that money more effectively and show an impressive level of maturity and business value creation
Generative artificial intelligence (AI) emerged from Silicon Valley, but it is Asia-Pacific (APAC) companies that are utilizing it most effectively. APAC firms also show signs of more maturity and readiness than their North American competitors, despite that region’s far greater spending.
These insights are from our research into how large APAC companies are adopting generative AI. Our survey focused mainly on businesses in Australia and New Zealand (ANZ), but also included samples across four leading Asian economies: China, India, Japan, and Singapore. These new findings add to those published for North America and Europe in October and December 2023, respectively.
We estimate that the six APAC countries we surveyed have spent $1.4 billion on generative AI initiatives in 2023 — driven mostly by China’s $800 million in spending.
As a proportion of GDP, however, APAC spending on generative AI is half that of Europe and a third of North American spending.
Much of this reflects the slower roll-out of generative AI tools, and availability of GPUs in the region: in October, the US told chip manufacturers NVIDIA and AMD to halt the export to China of some of its high-end chips used in AI hardware.
Despite APAC’s lower spending, this region demonstrates an impressive level of maturity and business value creation.
For instance, 55% of APAC companies are already implementing generative AI or creating business value from their generative AI initiatives.
This is more than the 46% of North American and 42% of European companies that have reached those more mature stages.
China accounts for much of this fast start, leading all countries surveyed in generative AI adoption and value creation.
But Australia really punches above its weight too. At the current rate of adoption, Australian firms demonstrate higher effectiveness (17%) than those in North America (11%), relative to the amount they are spending as a proportion of their GDP. China, however, is way out in front, with a rate of 37%.
Given that APAC’s generative AI spending is expected to grow twice as fast as North America, APAC companies could deliver significantly more generative AI business value by the end of 2024 compared to North American businesses.
While APAC companies are already benefiting from generative AI, they are concerned about the technology’s potential impact. Asian countries are particularly worried about negative effects on talent and cost efficiency, whereas ANZ firms cite concerns about business models and reputational impact.
Similar to European firms, Australian firms are more concerned about ethics and bias than usability. Yet APAC firms still lack clarity over who in their organization should sponsor and lead generative AI initiatives. This is particularly acute among ANZ’s public-sector organizations, where almost a third of respondents have yet to determine their sponsors.
APAC’s advanced maturity may well represent the future for generative AI in enterprises globally. The region believes that AI will support product development and design, or content generation and creativity more than operational efficiency and personalization.
The caution and concern over ethics and privacy, combined with the heterogenous politics of APAC, makes the region an ideal proving ground for multiple regulatory regimes. The region’s spend is smaller than other regions now, but APAC could mark the future for generative AI for us all.
Generative AI Radar: APAC
