South-east Asia outpaces global average in AI adoption as Singapore builds regional hub: survey

SOUTH-EAST Asia is edging past the global average in artificial intelligence (AI) adoption, with nearly 90 per cent of companies planning to experiment with agentic AI. 

This is according to the AI in Southeast Asia: An Era of Opportunity report published on Feb 11, 2026, by McKinsey & Company, the Singapore Economic Development Board (EDB) and Tech in Asia. 

Based on a survey with 330 respondents from different industries and company sizes, 81 per cent of companies in the region have moved beyond experimentation into pilot and scaling phases, compared with a global average of 63 per cent.

Amid global economic headwinds, Singapore has emerged as a regional hub for cloud and AI innovation, strengthening its role as a base for companies scaling AI across South-east Asia. The city-state hosts more than 60 AI centres of excellence, including those operated by Alibaba Cloud, IBM, Nvidia and Oracle.

Take a look at the infographic to understand how companies across South-east Asia are adopting AI and the key trends shaping the region’s digital transformation.

Large regional technology firms are pushing beyond experimenting with AI and applying it in real use cases. Grab, South-east Asia’s largest ride-hailing platform, has deployed AI-driven applications across its ecosystem, including a merchant AI assistant and a driver AI co-pilot.

Said Grab’s group head of data and analytics Nikhil Dwarakanath: “Our merchant AI assistant is now rolled out to over 1.2 million merchants. AI is helping to improve top-line growth.”

Cloud providers see this momentum accelerating. In the report, Vikram Rao, director of growth markets and strategic accounts for ASEAN at Amazon Web Services (AWS), described AI as a turning point for the region.

“AI is the biggest opportunity since cloud computing and possibly even since the internet. Our customer base has grown by five times over 2024 to 2025 alone, and with use cases across every industry,” he said. 

AWS has committed an additional US$9 billion (S$11.5 billion) investment in Singapore by 2028, signalling strong expectations of sustained enterprise demand for AI infrastructure in the region.

Talent and system integration remain the biggest barriers

Despite rapid experimentation with AI, businesses cite a shortage of skilled AI workers as well as difficulties integrating AI into existing systems as the top obstacles. 

One in five executives named the lack of AI professionals as their biggest barrier, affecting sourcing of qualified leaders, upskilling staff and retaining critical expertise. Industry observers say talent shortages could become a constraint on companies seeking to scale AI adoption.

Singapore is tackling the skills gap through policy and training. The Government’s National AI Strategy 2.0, together with workforce initiatives such as TechSkills Accelerator, aim to boost AI literacy across the city-state, including for non-technical staff. 

Complementing these national efforts are collaborations between institutes of higher learning and industry. Examples include Singapore Institute of Technology’s AI centre with Nvidia, the National Institute of Education’s partnership with AWS, and Nanyang Technological University’s long-running corporate lab with Rolls-Royce. 

These collaborations provide training pipelines, testbeds, internships and cloud credits that help companies recruit talent, reskill staff and advance AI initiatives.

Industry leaders stress the importance of responsible governance. 

Said Singapore Airlines’ senior vice president of information technology George Wang: “I think that you will run longer, faster and better if you put governance and responsible AI at the centre.”

Despite strong momentum, only a small percentage of companies surveyed said that they have fully scaled AI adoption across their organisation.

Still, progress is happening. Singapore stands out as a regional leader, with 56 per cent of local companies reporting progress towards scaled AI adoption.

Read the full report and discover how your company can scale up adoption and capture the full value of AI in South-east Asia.