As ASEAN’s generative AI (GenAI) ecosystem evolves, startups are finding themselves both empowered and challenged by Big Tech. On one hand, tech giants like Amazon Web Services (AWS), Microsoft, and Google provide critical infrastructure, tools, and funding.
On the other hand, these companies are increasingly becoming competitors, rolling out their own AI-driven solutions. This duality creates a dynamic where startups must carefully balance collaboration and competition to thrive in a rapidly changing landscape.
The role of Big Tech in ASEAN’s GenAI ecosystem
Big Tech companies have been instrumental in enabling the growth of GenAI startups across ASEAN. Cloud platforms such as AWS, Google Cloud, and Microsoft Azure provide the foundational infrastructure that powers the majority of GenAI applications.
According to the ASEAN GenAI Startup Report 2024, 67 per cent of startups in the region use AWS, 47 per cent use Google Cloud, and 41 per cent rely on Microsoft Azure. These platforms offer startups access to GPU resources, advanced AI models, and global distribution networks.
Foundation model providers, including OpenAI, Anthropic, and Meta, also play a key role. Startups leverage their pre-trained models—such as OpenAI’s GPT and Meta’s Llama—to build and fine-tune AI solutions for specific use cases. These models enable startups to develop applications rapidly without the need to build foundational AI capabilities from scratch.
Big Tech has further supported the ecosystem through accelerator programs, funding initiatives, and technical mentorship. Programs like the AWS GenAI Accelerator and Google AI Accelerator provide startups with cloud credits, marketing opportunities, and connections to enterprise clients. These initiatives not only reduce the cost of innovation but also enhance startups’ visibility in the market.
The competitive threat of Big Tech
While Big Tech’s contributions are significant, they also pose challenges to startups, particularly in the form of competition. These companies can quickly integrate AI capabilities into their own products, targeting the same enterprise customers as startups.
For instance, Microsoft’s integration of OpenAI’s GPT into its suite of productivity tools creates direct competition for startups offering similar solutions. Similarly, AWS and Google Cloud are increasingly bundling AI-powered tools into their platforms, which can undermine startups that rely on these providers’ infrastructure while competing for the same market segments.
Also Read: Navigating the go-to-market challenge: Helping ASEAN GenAI startups succeed
Moreover, startups that act as “wrappers” around foundation models—offering solutions that build on existing AI models with customised user interfaces or workflows—are especially vulnerable. As foundation models improve and expand their functionalities, startups risk being “steamrolled” by the very providers they depend on.
Despite these challenges, startups can mitigate risks by differentiating themselves through niche applications, fine-tuned models, and unique user experiences. For example, Vietnam’s Mesolitica and Thailand’s Botnoi Group have successfully built localised and specialised AI solutions that cater to unique regional needs, reducing direct competition with Big Tech.
Strategies for balancing collaboration and competition
ASEAN startups must adopt strategic approaches to leverage Big Tech’s resources while safeguarding their market position.
Leverage partnerships for growth
Startups can benefit from Big Tech partnerships to accelerate product development, gain market access, and enhance credibility. Many cloud providers and foundation model developers actively seek collaboration with startups to showcase their platforms’ capabilities.
Programs like the AWS Marketplace enable startups to onboard their solutions into enterprise ecosystems, bypassing lengthy procurement processes. Startups such as Malaysia’s Mesolitica and Vietnam’s Pixel ML have used these partnerships to secure proof-of-concept (POC) deals and scale their operations.
Adopt open-source and hybrid models
To reduce dependency on proprietary models, startups are increasingly turning to open-source alternatives like Meta’s Llama and Hugging Face. These models provide greater flexibility and allow startups to build proprietary solutions that are less vulnerable to direct competition.
For instance, Vietnam’s AI Hay and Thailand’s Typhoon are leveraging open-source models to create localised AI solutions optimised for their respective markets. This approach not only enhances differentiation but also reduces reliance on external providers.
Focus on niche applications
Specialising in niche markets or industry-specific solutions is another way for startups to navigate the competitive landscape. By addressing unique problems that require localised knowledge or custom datasets, startups can create value that Big Tech’s generalised solutions cannot match.
Also Read: From innovation to impact: Key sectors driving GenAI adoption in ASEAN
The path forward: Co-opetition in the GenAI ecosystem
The evolving relationship between ASEAN startups and Big Tech highlights the concept of “co-opetition”—a blend of competition and collaboration. While Big Tech provides essential resources and partnerships, startups must proactively manage the risks of over-reliance and direct competition.
Governments and ecosystem enablers can also play a role in balancing this dynamic. Policies that support startup innovation promote open-source adoption, and foster collaboration between enterprises and startups can help level the playing field.
For ASEAN startups, success in the GenAI era will depend on their ability to build defensible positions through differentiation, leverage partnerships effectively, and innovate faster than their larger competitors. By embracing the opportunities Big Tech offers while mitigating the risks, startups can navigate the complexities of the GenAI ecosystem and emerge as leaders in the region.
In the end, the key to thriving in this dual landscape lies in viewing Big Tech not just as a competitor but as an essential partner in driving innovation and scaling impact.
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This article is the fourth in a series from the ASEAN GenAI Startup Report 2024. GenAI Fund invests in early-stage GenAI startups across Southeast Asia, focusing on growth strategies and exit opportunities. Stay updated with new articles in this series by subscribing and following us on our channels. For more articles, visit: https://e27.co/category/reports/.
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