Maybank Investment Bank said Monday that venture capital (VC) investment in ASEAN artificial intelligence (AI) remains small – only $6 billion between 2020 to 2024, highlighting room for growth, especially in Malaysia.

The research house who attended “The Rising AI Wave – Ambitions vs. Ambiguity” panelist in Invest ASEAN-Malaysia 2025 said in a note that there is a growing need for increased investment in private equity (PE) and VC initiatives focused on AI in ASEAN, particularly in Malaysia.

“Greater availability of capital can help support the growth of AI startups and foster innovation in the region,” said the research house.

It is noted that between 2020-2024, about $6 billion was invested in AI-related VC initiatives in ASEAN, with around 70 percent of those investments concentrated in Singapore.

However, the $6 billion invested only accounts for less than 1 percent of global VC investments over the same time period, indicating ample spare capacity for future capital deployment.

According to the research house, hardware still dominates software in a duopolistic AI landscape.

It is noted that the global AI landscape is currently defined by a two-horse race between the US and China.

Although Europe and Japan are home to some innovative AI startups, neither are positioned as major global players in AI.

Notwithstanding the proliferation of AI-based software applications, it is hardware providers like Nvidia who are currently benefitting the most from the AI boom as Amazon,
Meta, Google and Microsoft’s combined capex is expected to breach about $300 billion in 2025.

However, it noted the outlook for AI software remains challenging as (i) a lack of differentiation, (ii) the ubiquity of free AI models & applications, and (iii) low switching costs for users have all led to the commoditization of AI – especially in China, where majority of AI-enabled software products are currently offered without charge.

Hence, a concerted shakeout is required to consolidate and improve the profitability of AI software providers.

Maybank also highlighted that future AI profitability will be driven by the race to achieve AGI.

To achieve sustainable profitability and unlock the full potential of AI, the development of “killer apps” that offer unique and compelling value propositions (beyond the likes of ChatGPT/DeepSeek), is essential, it noted.

Progress towards AGI, which would match human-level intelligence, is also seen as a key driver for future growth and commercialization.

“ASEAN nations have the potential to capitalize on the AI boom by increasing domestic adoption across various industries (agriculture, digital economy, business etc.),

“To attain this goal, sustained investment in data centers and support for R&D are imperative,” said the research house.

Maybank also highlighted the ongoing AI super cycle is expected to drive substantial semiconductor industry growth in the years ahead, presenting significant opportunities for ASEAN.

Malaysia, with its well-established presence in back-end assembly and testing, would do well to leverage on compliance with US export controls while simultaneously pursuing deeper trade integration with China, said the research house.

It noted that ASEAN/Malaysian semiconductor companies have the potential to move up the value chain by focusing on IC design, advanced packaging, and the development of specialized chips (ASICs) for AI applications.

Talent development, digitalization, and sustained government support have been identified as critical enablers to this end.

Maybank also noted that governments play a pivotal role in fostering the growth of the AI sector by providing financial incentives, supporting education and training programs, as well as attracting investment in high-end facilities.

“Drawing parallels with the CHIPS Act in the United States, the discussion emphasized the importance of ASEAN governments addressing potential bottlenecks in skilled labor and ensuring access to capital for investments in AI-based technology,

“AI itself can also be a useful tool to improve the overall quality of the education system when used for personalized tutoring, automated grading, and other educational applications,” it added.

Maybank’s comments are based on panelists including John Lee, Director, East West Futures; Fong Swee Kiang, Chief Executive Officer, Skyechip; James Morley, Senior Investment Officer and Malaysia Anchor for Manufacturing, Agribusiness and Services, International Finance Corporation (IFC), The World Bank Group; Giorgio Migliarina, Group Chief Technology & Digital Officer, Maybank.


#AIInvestment #ASEANGrowth #VCFunding #ArtificialGeneralIntelligence #TechInnovation