The rapid global expansion of artificial intelligence presents a dual-edged scenario for Southeast Asia, where technological advancement risks exacerbating pre-existing economic and digital divisions across the region. According to industry analysts, while nations like Singapore, Malaysia, and Vietnam stand to gain substantially from AI integration, less developed ASEAN members face the prospect of falling further behind in the technological race.
Priyanka Kishore, Director and Principal Economist at Singapore-based consultancy Asia Decoded, emphasized that countries deeply embedded within global AI supply chains possess distinct advantages. “Singapore and Malaysia’s established positions within these networks provide them with continued opportunities to leverage the AI boom,” Kishore noted, adding that Singapore currently leads regional AI deployment with Vietnam demonstrating significant progress.
Research from French investment bank Natixis, published in January, indicates that rising semiconductor demand driven by AI-related supply constraints will substantially contribute to Asian GDP growth throughout the first half of 2026. This technological surge particularly benefits economies with robust digital infrastructure, extensive tech ecosystems, and skilled digital workforce capabilities.
Dominic Ligot, Founder of Manila-based AI training firm CirroLytix, warned of emerging disparities. “Urban centers with superior infrastructure and talent development pipelines will capture the majority of AI benefits,” Ligot stated. He further cautioned that regions lacking these resources face diminished innovation capacity and reduced business competitiveness, ultimately resulting in widened productivity gaps and unequal access to AI-enabled value chains.
The labor market faces particular challenges, with Ligot identifying “polarization” as a significant risk. High-skilled workers capable of complementing AI systems may command increased wages, while routine service positions face potential displacement through automation.
Lavanya Venkateswaran, Senior Economist for ASEAN at OCBC Bank, acknowledged AI’s potential to enhance productivity and stimulate growth across the region but noted adoption isn’t limited to supply chain participants. The technology nevertheless highlights the substantial economic disparities within ASEAN, which encompasses both highly developed economies like Singapore and emerging nations such as Laos and Timor-Leste.
A July 2025 study by the Economic Research Institute for ASEAN and East Asia (ERIA) revealed significant digital readiness disparities among governments, corporations, and individuals throughout the region. Digital uptake varies considerably between nations with established technological infrastructure and those with limited resources.
Elina Noor, nonresident scholar in the Asia Program at the Carnegie Endowment for International Peace, noted that existing digital divides complicate accurate assessment of AI’s economic impact across ASEAN. Noor also highlighted that current discourse frequently overlooks the environmental and social costs associated with AI-related investments, presenting additional considerations for regional policymakers.