Get ready for big changes in APAC’s business environment in 2025. AI-powered initiatives will help drive technological advancements for companies in the region. In 2024, after more than a year of piloting and experimenting with generative AI, companies will face the harsh reality of region-specific challenges. Prepare for stricter AI and data privacy regulations, limited data and analytics capabilities, and evolving customer demands.
Leading companies are already thinking carefully about their digital investments and are working hard to improve performance through targeted data and AI investments. They know that the key to success is embracing technology and staying ahead of the curve. And they are not alone in this journey. The combination of strong technical expertise, increased technology spending, and regional technology providers offering customized solutions will enable APAC business leaders to meet the demands of both regulators and customers.
With all this in mind, this year’s forecast for APAC is a culmination of the changes organizations will make across their value chains to thrive in the impending AI era.
60% of APAC companies plan to localize AI using regionally trained language models. In 2025, AI innovation strategies in APAC will be reshaped by diverse customer needs, regulatory challenges, and language barriers. 60% of businesses and governments in major markets such as India and China expect to integrate large-scale, locally developed language models with global language models, targeting sectors such as finance, education, and healthcare. . Unlike the US focus on public cloud, 90% of large enterprises in Greater China will prefer a hybrid strategy with private cloud. Geopolitical tensions will further drive regional AI investment, while local AI chipsets will power more than 5% of China’s AI computing, increasing its technology self-sufficiency. A common AI legal framework across APAC will remain a distant dream. In the Asia-Pacific region, the AI legislation landscape is fragmented, unlike the EU’s unified approach. Although many countries share fundamental principles such as civil protection and data privacy, their implementation varies widely. For example, Singapore promotes responsible AI with mature guidelines, while China focuses on laws against algorithmic fraud. India applies existing criminal law to similar issues. Initiatives such as the ASEAN Guide on AI Governance and Ethics have begun, but are still in their early stages, requiring APAC organizations to invest in compliance to align with national regulations as AI adoption grows. One in five APAC companies has made measuring digital performance a top priority. Forrester’s 2024 survey data reveals that only 38% of digital decision makers use KPIs to evaluate digital initiatives. Despite robust digital budgets for 2025, many APAC companies struggle to connect various metrics to financial KPIs. To close this gap, leading companies will invest in measurement intelligence technology and establish cross-functional task forces to strengthen measurement practices. However, digital leaders should be wary of genAI dashboard solutions, as vendors often underestimate the complexity involved in data integration and analysis.
To learn more about each of these forecasts and read additional forecasts, read the full 2025 Forecasts: Asia Pacific report. Set up a Forrester research or guidance session to discuss these predictions and plan your 2025 strategy.
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