South-East Asia makes an AI power grab
Firms are motivated not just by the region's 700m people, even though many of them are young and tech-savvy. South-East Asia's proximity to China and other large economies (such as Australia, Japan and India) makes it an ideal base to serve global clients. Singapore, Malaysia, Thailand and Indonesia host nearly 2GW in data-centre capacity, equivalent to the combined infrastructure of Europe's largest data-centre hubs, London and Frankfurt, according to Jones Lang LaSalle, a property-services firm.
Of all the countries in South-East Asia, Singapore and Malaysia benefit most from the AI race. Singapore, with its well-governed, stable economy, has deftly handled its relationships with America and China. In 2023 it awarded four new data-centre tenders: two to American firms (Equinix and Microsoft) and two to Chinese ones (GDS Holdings and a group led by Bytedance). It now hosts 60% of South-East Asia's data-centre capacity.
Chinese firms have moved aggressively. Huawei and Alibaba, two of China's internet giants, have built data centres across the region. Alibaba has partnered with Tencent, another Chinese tech titan, and GoTo, an Indonesian tech firm, to train Indonesians in cloud computing and AI. Tencent alone plans to invest $500m in Indonesia by 2030. Huawei has also begun selling its Ascend AI chips, an alternative to Nvidia's high-end semiconductors that are banned for sale to Chinese firms, in the Middle East and South-East Asia. This is further evidence that China is building its own rival technological stack, rather than merely evading American export controls.
Meanwhile Alphabet, Amazon and Microsoft, America's three big cloud-service providers, are also investing in South-East Asia. Amazon and Microsoft make up 60% of the cloud 'infrastructure as a service' market in the region. Amazon plans to spend $9bn to expand in Singapore by 2028; Microsoft has pledged $4bn in Malaysia and Indonesia; Alphabet is building a $2bn data centre in Malaysia and investing $1bn in Thailand. Many American technology titans have their Asia headquarters in Singapore—including Alphabet, Apple, AWS, Meta and Microsoft—especially as the Chinese Communist Party has tightened its grip on Hong Kong, which was once the regional corporate hub for more traditional firms.
Perhaps the most telling example is the partnership between Oracle, an American cloud firm, and Bytedance, TikTok's Chinese parent. Their partnership has helped turn Johor, the Malaysian state that borders Singapore, into the world's second-largest AI hub, according to SemiAnalysis, a research firm. Bytedance will invest $2.7bn in Malaysia, while Oracle plans to invest over $6.5bn. Most of its graphics-processing-unit (GPU) capacity (the kind used to train AI models) in the region goes to Bytedance. The data centres are run by chips supplied by Nvidia, whose advanced semiconductors power generative AI.
Oracle's data centres were built by DayOne, a developer based in Singapore, according to SemiAnalysis. DayOne was spun out of Chinese data-centre firm GDS Holdings, which retains a 36% stake. Donald Trump's AI Action Plan, which he unveiled on July 23rd, is 'positive' news for data-centre projects across Asia, says Jamie Khoo, DayOne's chief executive. Earlier in the year uncertainties about America's policies on export controls created fear in the industry, she adds. Mr Trump's new policies create clearer rules for firms in Asia using high-end GPUs with American technology. According to SemiAnalysis, DayOne's biggest customer is ByteDance; its second-biggest is Oracle. Together, Oracle and DayOne are also setting up a big cloud facility in Indonesia.
DayOne is far from the only firm to distance itself from China. Manus, a Chinese AI startup, shifted its headquarters to Singapore in July. PC Partner Group, which assembles Nvidia GPUs for gaming, left Hong Kong for Singapore in 2024. Even Bytedance runs most of its international operations from Singapore—and repeatedly insists that it is not a Chinese firm. Other Chinese firms have also gained access to banned chips by renting servers in South-East Asian data centres. This remains legal, though controversial.
Beneath this flurry of legitimate activity is an underworld. In one attempt to circumvent semiconductor restrictions, a firm called 'Luxuriate Your Life' bought servers from Dell and Supermicro, which may have contained banned Nvidia chips, in an alleged fraud worth $390m. The servers were thought to have been smuggled into Malaysia through Singapore. Singaporean authorities arrested three men suspected of shipping the chips to DeepSeek, a Chinese AI firm. If convicted, they face up to 20 years in prison.
More export controls are coming. Malaysia announced on July 14th that all exports, trans-shipments and transits of advanced AI chips would require a trade permit. Individuals and firms must notify Malaysian authorities at least 30 days before moving any items not explicitly covered by existing exemptions. This follows pressure from America to stop chips subject to export controls reaching China via Malaysia.
Of course, smuggling is not limited to semiconductors. When China banned exports of critical minerals to America in 2024, a new trans-shipment network emerged. Between December 2024 and April 2025 America imported almost as much antinomy oxide from Thailand and Mexico as in the previous three years combined. Chinese firms shipped restricted materials through third countries, using false labels like 'iron' or 'art supplies', reported Reuters. As boundaries between legal and illegal supply chains blur, South-East Asia's role in the global tech economy—as a partner, a geopolitical buffer and a back door—will only grow.
Correction (July 31st): An earlier version of this article said that DayOne had moved its headquarters from China. In fact, it spun out its international operations. Sorry.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
8 minutes ago
- Time of India
Snap's revenue growth slowest in over a year as competition, ad platform glitch hurt
Academy Empower your mind, elevate your skills Snap on Tuesday reported its slowest quarterly growth in more than a year, hurt by a temporary glitch in its ad platform and advertiser preference for bigger rivals such as Meta , sending its shares down over 16% in extended Snapchat-parent said it had resolved the error that unintentionally allowed some ads to run at much lower faces tough competition from the likes of TikTok and Meta-owned Facebook and Instagram, with advertisers preferring the larger platforms as they curtail marketing budgets amid economic uncertainty. Rivals Meta and Reddit reported upbeat second quarter results last week."The digital ad tailwinds that propelled Meta and Reddit to blowout quarters turned into a light breeze for Snap," said eMarketer principal analyst Jasmine different circumstances, investors might have overlooked its ad platform misstep, but "there is little room for mistakes," she quarterly revenue was also impacted by the timing of Ramadan, which influenced ad spending patterns. The end of the "de minimis" exemption - a U.S. duty-free import provision - also prompted some Chinese advertisers to reduce their marketing April, ad revenue declined about 1% before "largely recovering" through May, and triggering the company to roll out Sponsored Snaps - a new video ads format that appears in user inboxes - more broadly in June, said CFO Derek company said its expanded roll-out of Sponsored Snaps across the U.S. and several other global regions is driving more user actions and deeper engagement with ad Santa Monica, California-based company reported second-quarter revenue of $1.34 billion, up around 8.7% from last year and largely in line with estimates, but lower than the double-digit growth it recorded in the last five quarters. Its net loss widened to $263 million from $249 million a year and medium-sized businesses were the largest contributors to ad revenue growth and its subscription service Snapchat+ remained a key driver for diversifying revenue beyond subscribers rose 42% to nearly 16 million for the quarter ended June 30. Daily active users rose 9% to 469 million, compared with estimates of 467.9 company forecast third-quarter revenue between $1.48 billion and $1.51 billion, compared with analysts' average estimate of $1.48 billion, according to data compiled by LSEG.
Mint
8 minutes ago
- Mint
Six months after DeepSeek's breakthrough, China speeds on with AI
The mecca for China's boom in artificial intelligence is Liangzhu, a leafy suburb of Hangzhou, the tech-heavy capital of Zhejiang province. The Communist Party has long touted Liangzhu's famous archaeological remains, dating back to 3300BC, as proof of the age of Chinese civilisation. Now Liangzhu, with its myriad AI startups, represents the future. Investors from all over China flock there to meet growing numbers of founders, app engineers and other AI developers and dreamers. It is six months since a barely known AI startup, DeepSeek, caused a huge stir by releasing an impressive open-source model trained for a sliver of the cost of fancier Western ones. Its founder studied at Zhejiang University, a tech mothership not far from Liangzhu. The area is at the heart of an AI ecosystem which China hopes will soon rival America's. The signs are promising. Last month three Chinese labs introduced stellar large-language models that are reckoned to be among the world's best. AI technologies have 'broken through the critical threshold of usefulness", says one early-stage investor who frequents Liangzhu. He predicts a surge in how AI can be applied. 'Once the water boils," he says, 'many people want to build a steam engine." Sam Hu, at a sunny café in Liangzhu's main plaza, is one such person. After stints at Tencent, a tech giant, and two ride-hailing firms, last year Mr Hu struck out on his own to develop an AI agent that helps managers make decisions. The moment was right. These days, he explains, 'the cost of trial and error is lower." The prize for Mr Hu and his peers is enormous. Morgan Stanley, a bank, predicts that China's AI industry will grow from $3.2bn last year to $140bn by 2030; that figure jumps to $1.4trn when AI-related sectors such as infrastructure and component suppliers are included. In June last year some 8% of Greater China firms surveyed by Gartner, a consultancy, were using generative AI. Less than a year later the figure had leapt to 43%. The question now is how to keep the industry steaming along. Some of the early frenzy around DeepSeek has passed, and plenty of users still grumble about how models can 'hallucinate". But DeepSeek's breakthrough has helped shift China's approach to AI in profound ways. It has lowered costs and moved the emphasis away from cutting-edge development and cut-throat competition among developers of AI models towards explorations of how AI can be applied across business, industry, the public sector and society itself. The importance of AI for China—and indeed the way it can outdo America, its promoters increasingly argue—is through its adoption, adaptation and diffusion, that is, spreading the use of AI more broadly. It helps greatly that China's leadership believes the same thing, and is offering state backing. President Xi Jinping's handshake with DeepSeek's founder, Liang Wenfeng, broadcast earlier this year into the country's living rooms, helped transform how ordinary Chinese view AI. Grandparents were suddenly keen to try out chatbots. The early frenzy was all a bit over the top, says Louis Dong, who developed AI courses for schoolchildren after parents bombarded the education company he works for with requests. Now, Mr Dong says, the focus is on identifying applications for specific industries and putting AI capabilities to pragmatic use. Rapid adoption is key, many experts argue, and DeepSeek's breakthrough, along with advances in other models, is enabling it. Companies appear to be adopting a more can-do attitude by experimenting with the technology. There is still room for improvement. Accenture, a consultancy, found that 46% of Chinese firms have broadly integrated generative AI, but only 9% saw real benefit in productivity or profit growth. It is early days, AI executives insist. Jiang Xinghua, chief technology officer at Yizhi Intelligence, which develops AI customer-service agents for chemists and furniture stores and AI livestreamers for beauty brands, says ever more clients want to adopt AI-enabled products, and are even tolerant of them making minor mistakes. A big question is how much AI products can improve. A lot, say China's techno-optimists. Chinese efforts to train new models have been complicated by America's ban on exports of its most advanced AI chips. In April President Donald Trump's administration banned shipments to China of Nvidia's H20 chip, which is deliberately hobbled to make it less effective for training (though it is well suited to 'inference"—the process of actually running AI models for customers). In July America reversed course. Yet the political uncertainty and risk remains. Strikingly, however, China's AI development seems to sail on through the turbulence. At China's biggest AI conference to date, in Shanghai last month, Yan Junjie, the boss of MiniMax, a leading Chinese model-maker, declared that 'the inference costs for the best models have fallen by an order of magnitude." He predicts further sharp falls in the next year or two, driven by innovation and fierce domestic competition. Mr Jiang of Yizhi Intelligence says that although Chinese AI development is frustrated by being denied the best foreign models (such as America's GPT and Gemini), domestic open-source models are improving rapidly. Meanwhile, the state is playing a big role, not only by supporting AI development, but also in creating demand. In April, when the leadership convened a study session on AI, Mr Xi talked about making the most of China's juguo tizhi youshi—its systematic, state-led advantage in mobilising the whole country. Lower levels of government, used to reading cues from the top and keen to find new areas of economic growth, have embraced the message, sometimes rather keenly. When Rokid, a Hangzhou startup making AI-equipped glasses, submitted an application to the district-level government for a subsidy, 3m yuan ($420,000) appeared in its account within eight minutes. Across China, cities are rushing to offer subsidies for everything from housing to computing power to tailoring open-source models to suit business needs. The state is also an important customer. State museums offer Rokid glasses for tours, while state power workers use them to identify faults along transmission lines. Meanwhile, provincial and municipal governments have rushed to use DeepSeek to improve hotlines, analyse data and interpret policies for residents. Shen Yang, a professor at Tsinghua University, says he has consulted for twice as many government units across China this year compared with last year. They all want to know how to use AI. One example he cites is Beijing's Haidian district, well-known for its tech universities and businesses, which has deployed AI software to help teachers prepare lessons. Another is Jiangxi province, which wants to integrate AI into its rare-earth and ceramics industries. Plenty of risks come with the state and investors rushing in. Analysts at Jefferies, an investment bank, identify enthusiasm for humanoid robots as a bubble in the making. Humanoid robots are part of an 'embodied AI" push written into the central government's work report this year. Local governments are falling over themselves to back them. Yet it may be years before the humanoids can be put to profitable use—if they ever can. Other applications of AI might carry greater risks than excess capacity. In April Tsinghua researchers asked if the more than 300 Chinese hospitals already using DeepSeek were moving 'too fast, too soon" and were in danger of making diagnoses based on false outputs. Last month another group of researchers identified 'an urgent need" to ensure that AI was being safely and responsibly deployed at hospitals. The central leadership is growing more aware of the possible pitfalls. Last month Mr Xi named AI, along with computing power and electric vehicles, as areas shown excessive attention by local governments. 'Do all provinces have to develop industries in these directions?" The answer is surely 'no". But for now, their involvement is another reason for thinking that China's AI juggernaut will keep rolling.
The Hindu
8 minutes ago
- The Hindu
U.S. envoy Witkoff to visit Moscow ahead of sanctions deadline
U.S. envoy Steve Witkoff will meet on Wednesday (August 6, 2025) with the Russian leadership in Moscow as President Donald Trump's deadline to impose fresh sanctions over Russia's war in Ukraine looms. Mr. Trump has given Russia until Friday (August 8, 2025) to halt its offensive in Ukraine or face new penalties. The White House has not outlined specific actions it plans to take on Friday (August 8, 2025), but Mr. Trump has previously threatened to impose 'secondary tariffs' targeting Russia's remaining trade partners, such as China and India. The move would aim to stifle Russian exports but would risk significant international disruption. Mr. Trump said on Tuesday (August 5, 2025) that he would await the outcome of the Moscow talks before moving forward with any economic retaliation. 'We're going to see what happens,' he told reporters. 'We'll make that determination at that time.' An American source did not specify if the meetings will include Russian President Vladimir Putin, whom Mr. Witkoff has met with several times previously. Despite pressure from Washington, Russia has continued its onslaught against its pro-Western neighbour. Three rounds of peace talk in Istanbul have failed to make headway on a possible ceasefire, with the two sides appearing as far apart as ever. Moscow has demanded that Ukraine cede more territory and renounce Western support. Kyiv is calling for an immediate ceasefire, and Ukrainian President Volodymyr Zelenskyy last week urged his allies to push for 'regime change' in Moscow. Nuclear rhetoric In recent weeks, Mr. Trump has increasingly voiced frustration with Mr. Putin over Moscow's unrelenting offensive. When reporters asked Mr. Trump on Monday (August 4, 2025) what Mr. Witkoff's message would be to Moscow, and if there was anything Russia could do to avoid the sanctions, Mr. Trump replied, 'Yeah, get a deal where people stop getting killed.' Kremlin spokesman Dmitry Peskov said on Monday (August 4, 2025) it considered the talks with Mr. Witkoff to be 'important, substantial and helpful' and valued U.S. efforts to end the conflict. Mr. Putin, who has consistently rejected calls for a ceasefire, said on Friday (August 1, 2025) that he wants peace but that his demands for ending his nearly three-and-a-half-year offensive were unchanged. Russia has frequently called on Ukraine to effectively cede control of four regions Moscow claims to have annexed, a demand Kyiv has called unacceptable. Mr. Putin also wants Ukraine to drop its ambitions to join NATO. The visit comes after Mr. Trump said that two nuclear submarines he deployed following an online row with former Russian president Dmitry Medvedev were now 'in the region.' Mr. Trump has not said whether he meant nuclear-powered or nuclear-armed submarines. He also did not elaborate on the exact deployment locations, which are kept secret by the U.S. military. Russia, in its first comments on the deployment, urged 'caution' on Monday (August 4, 2025). 'Russia is very attentive to the topic of nuclear non-proliferation. And we believe that everyone should be very, very cautious with nuclear rhetoric,' the Kremlin's Peskov said.
