APAC Looks To Become Global GenAI Powerhouse
- By CDOTrends editors
- December 04, 2023
Asia-Pacific has recently emerged as a crucial battleground for adopting and advancing generative artificial intelligence (GenAI). The latest EY CEO Outlook Pulse survey sheds light on this trend, highlighting how CEOs in the region are aggressively investing in GenAI to secure a competitive advantage and drive growth.
The survey, encompassing 1,200 global CEOs, reveals a significant push towards GenAI adoption in the Asia-Pacific region. Despite challenges and uncertainties surrounding this emerging technology, 71% of CEOs recognize the urgency of embracing GenAI to avoid falling behind their competitors. This sense of urgency is coupled with a clear understanding of the potential challenges, as the same percentage of CEOs report being hindered by uncertainties in the GenAI landscape.
Yew-Poh Mak, EY Asia-Pacific's strategy and transactions leader, emphasizes the transformative potential of GenAI, stating, “The potential for GenAI to reinvent the way companies operate cannot be ignored, and Asia-Pacific CEOs are making bold investments in the technology to solidify their competitive advantages and future-proof their organizations." He adds, "However, CEOs know that companies with genuine GenAI capabilities can become game-changing allies or acquisitions, but the relentless hype around artificial intelligence has clouded their view of the landscape.”
The commitment of Asia-Pacific CEOs to GenAI is not just in words; it is reflected in their actions. A striking 98% are actively investing in or planning significant investments in this field. To fund these ventures, 74% are reallocating capital from other projects, and 15% are raising new capital. This strategic shift comes with challenges, as 28% of CEOs cite the risks associated with AI deployment as a primary concern in capital allocation decisions.
Despite the reduced appetite for mergers and acquisitions (M&A), Asia-Pacific remains a top destination for business expansion, with 53% of CEOs planning to extend operations outside their headquarters, primarily within the region. China, Australia, Japan, India, and South Korea top the list of preferred destinations. This trend aligns with the global CEO community, favoring the Asia-Pacific region for expansion.
The report also highlights a significant investment in the future workforce, with 88% of CEOs either having completed or in the process of hiring talent equipped with relevant GenAI skills. This move is crucial in a landscape where 68% of CEOs believe a surge in companies claiming AI expertise complicates partnership and acquisition decisions.
Asia-Pacific CEOs remain resilient and adaptive despite these challenges, especially in managing labor costs. Mak notes, "Asia-Pacific CEOs are prioritizing agility and adaptability when it comes to managing labor costs. With tight employment markets across much of the region, CEOs recognize they must strike a fine balance between maintaining a motivated, high-performing workforce and protecting their bottom line."
In conclusion, the EY CEO Outlook Pulse survey paints a picture of a region at the forefront of embracing generative AI. Asia-Pacific CEOs are not just recognizing the potential of this technology; they are actively investing in it, overcoming challenges, and reshaping their strategies to ensure their organizations remain competitive in a rapidly evolving global market.
Image credit: iStockphoto/NatalyaBurova