Predictions 2025: AI Shapes The Business Agenda In The APAC Region

Get ready for some major changes in the APAC business landscape in 2025! AI-driven initiatives will be the driving force behind tech improvements for companies in the region. After having spent more than a year or so piloting and experimenting with generative AI in 2024, businesses will face the harsh realities of the region-specific challenges ahead. Brace yourselves for stricter AI and data privacy regulations, limited data and analytics capabilities, and ever-evolving customer demands.

Leading firms are already taking a close look at their digital investments and working hard to enhance their performance through targeted data and AI investments. They know that the key to success lies in embracing technology and staying ahead of the game. And they’re not alone in this journey. With a combination of strong technical expertise, increased tech spending, and regional tech providers offering tailored solutions, APAC business leaders will be able to meet the demands of both regulators and customers.

With all that in mind, this year’s predictions for APAC are a culmination of changes that organizations will make across their value chains to win in the impending era of AI:

• Sixty percent of APAC firms will localize AI with regionally trained language models. In 2025, AI innovation strategies in the APAC region will be reshaped by diverse customer needs, regulatory challenges, and linguistic barriers. We believe that 60% of firms and governments in major markets such as India and China will integrate locally developed large language models alongside global ones, targeting sectors like finance, education, and healthcare. Unlike the US’s focus on public cloud, 90% of large enterprises in Greater China will favor a hybrid strategy with private cloud. Geopolitical tensions will further propel regional AI investments, while local AI chipsets are set to power over 5% of AI computing in China, enhancing technology self-sufficiency.
• A common APAC-wide AI legislative framework will remain a distant dream. The Asia Pacific region showcases a fragmented landscape for AI legislation, unlike the EU’s unified approach. While many countries share core principles like citizen protection and data privacy, their implementations vary widely. For example, Singapore promotes responsible AI with mature guidelines, whereas China focuses on laws against algorithmic misconduct. India uses existing criminal laws for similar issues. Though initiatives such as the ASEAN Guide on AI Governance and Ethics are emerging, they are still early-stage, requiring APAC organizations to invest in compliance tailored to each country’s regulations as AI adoption expands.
• One in five APAC firms will make measurement of digital performance a top priority. Forrester’s 2024 survey data reveals that only 38% of digital decision-makers use KPIs to assess digital initiatives. Despite robust digital budgets for 2025, many APAC firms struggle to connect various metrics to financial KPIs. To bridge this gap, leading companies will invest in measurement intelligence technologies and establish cross-functional task forces to enhance measurement practices. Digital leaders should be cautious of genAI dashboard solutions, however, as vendors often underestimate the complexities involved in data integration and analysis.

Read our full​ ​Predictions 2025: Asia Pacific​​ report to get more detail about each of these predictions and read additional predictions. Set up a Forrester inquiry or guidance session to discuss these predictions or plan out your 2025 strategy.

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