Southeast Asian companies are spending more on AI and getting little out of it. Adobe’s 2026 State of AI Readiness Report, which surveyed 461 senior executives in the region, finds 73% raising AI budgets year on year, while 57% remain stuck in AI’s Frozen Middle, piloting without the coordination to scale.
Only 15 of every 100 AI ideas reach production. IT evaluation kills 36% of proposals and security review another 18%, gatekeeping that partly reflects the risk of unchecked agent privileges. The deeper problem is ownership: just 12% of firms have an AI owner with budget authority, against 89% among the 27 Leaders, and only 8% measure ROI comprehensively. The findings reinforce e27’s argument that the region has a scaling problem, not an adoption one.
Leaders’ most effective move was funding employees already making AI work, echoing research on workers sprinting ahead of bosses. Caveats apply: the sample covers only firms with at least US$100M in revenue, the Leader cohort is tiny, and Adobe, an AI vendor, has an interest in blaming organisation over technology. The report reads like a sequel to Adobe’s earlier GenAI ROI findings.
Efforts such as Singtel’s RE:AI tie-up with SIT-NVIDIA aim to close that deployment gap.
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REGIONAL
Malaysia’s Budget 2027 earmarks US$110.4M for startups: National fund of funds Jelawang Capital and KWAP’s Dana Perintis will deploy the money, Prime Minister Anwar Ibrahim told parliament, though e27’s analysis shows the bigger cheques go elsewhere in the budget.
TCGX closes US$600M Asia biotech fund, opens Hong Kong office: The US healthcare investor’s first Asia-focused vehicle was oversubscribed by international institutional investors and will back drug developers across stages. TCGX is also opening in Shanghai, but has not named LPs, cheque sizes or portfolio companies.
BII commits US$1.6B to SEA climate finance over five years: The UK development financier will put up about half and mobilise the rest privately, largely through British Climate Partners, targeting renewables, transmission, EV infrastructure and water in Vietnam, Indonesia, the Philippines, Malaysia and Thailand.
Zenyum parent MakeO raises US$10M to grow dentist network in Asia: Singularity AMC led the round. The group, with 1,100 partner dentists across seven markets, has passed US$54.7M in ARR, is profitable on an EBITDA basis and is weighing more acquisitions in India and Asia.
NEU Battery Materials raises US$7.6M to scale LFP recycling: Shift4Good and SGInnovate co-led the round after NEU commissioned a 1,300-tonne-per-year Singapore factory. Both backed its 2023 seed, and NEU’s emissions claims still lack an independent life-cycle assessment.
Vietnamese-founded Drylab raises US$3M for autonomous AI lab agents: Vertex Ventures Southeast Asia & India led the seed round, with PatSnap joining. The Singapore-based startup’s agents run entire computational research workflows across 800-plus tools, though it has yet to name customers.
UOB and AWS team up on hybrid cloud and AI banking across ASEAN: The MoU creates a dedicated Singapore cloud environment, AWS’s first hybrid-cloud bank tie-up in ASEAN, designed to meet data residency rules while testing conversational banking and personalised services across UOB’s five markets.
VinFast takes 36% of Vietnam’s car market in first nine months: The Vingroup EV maker’s 177,697 domestic deliveries already exceed its full-year 2025 total, and September marked its 25th straight month on top. Toyota trailed in second place with 53,978 units.
INTERVIEWS AND FEATURES
17 SEA startups that can actually prove their social impact: In a funding winter, founders stretch the social impact label to cover anything with a farmer or a recycling bin in the deck. e27 picks 17 startups taking the harder route of proving it.
Singapore workers won flexibility, then lost their evenings: Jobstreet’s study finds 52% of employees report higher stress since 2019, against 27% citing better balance. Leaner teams spread the workload, yet only 12% plan to hire to ease the pressure.
Vietnamese shoppers ask AI first, then check Google before buying: Ho Chi Minh City-based Q&Me finds 62% of buyers use AI, including generative tools, to research purchases, but Google search remains the final checkpoint before most shoppers commit.
INTERNATIONAL
Moonshot execs seek settlement with Recurrent.ai ahead of HK IPO: In Hong Kong arbitration since 2024, Recurrent.ai accuses the Kimi maker’s CEO and CTO of misleading investors and moving or deleting AI data, seeking 10.5% of Moonshot’s original shares, potentially worth over US$700M. Yang denies wrongdoing.
Firmus pulls US$5B Australian IPO, will turn to private capital: Investors balked at a roughly US$31B valuation, three times its August round, for an operator running 42MW of a 1GW target. Firmus is building AI factories in Singapore, Indonesia and Malaysia, with OpenAI anchoring two Malaysian sites.
IMF tips Vietnam to lead SEA growth at 8.4% as global GDP slows: The fund projects 3.1% world growth in 2026, with Malaysia at 5.2% and Singapore at 5%. SEA gains from the AI cycle mainly through trade and manufacturing, not by building AI infrastructure.
CYBERSECURITY
TikTok CEO Chew Shou Zi warns of AI agents’ cybersecurity risks: Speaking at DBS Asia Future Forward in Singapore, Chew said users may grant AI agents broad permissions, including access to credit cards, without grasping the consequences, and urged firms to stop staff sharing trade secrets with public chatbots.
Igloo exports cyber insurance to Turkey in first move beyond APAC: Through Aktif Bank’s Sigortayeri, the Singapore insurtech will sell cover for cyberbullying and fraud to the N Kolay app’s eight million users for about US$43. Mitsubishi Corporation brokered the deal.
Microsoft’s Brad Smith wants breach alerts for rogue AI agents: Calling AI a weapon and a tool that threatens global cybersecurity, Smith argued the UK, not the US or EU, should lead safety rules, and said voluntary pledges only bind responsible companies.
SEMICONDUCTOR
TSMC posts record US$46.7B Q3 revenue on AI chip demand: Sales rose 50% year on year and topped TSMC’s own guidance of US$44.6B to US$45.8B, as well as analyst forecasts. Full earnings, with margins and outlook, land on 15 October.
Sumitomo Bakelite adds chip packaging lines in Singapore and Suzhou: The Japanese firm expects to roughly double underfill material capacity for AI and satellite chips, with Singapore output from early 2029. It also completes its US$190M purchase of Kyocera’s chemical business this month.
FedEx report finds AI boom pushing chipmakers across Asia Pacific: The AI race now hinges on where chips are made, how far they travel and whether supply chains survive the next geopolitical shock, putting logistics resilience on the agenda for SEA manufacturers.
a16z sends infrastructure team to South Korea to court chip firms: Partner Raghu Raghuram will meet Korean AI hardware firms and officials weeks after the US$1.1B Machine Age Fund launch, eyeing semiconductor and robotics partnerships as the country cements its role as AI’s memory backbone.
AI
Anthropic test agent sent false murder tip to Philadelphia police: The city’s spam filter caught the July tip, and Anthropic took over two months to spot it. Police called the delay unacceptable, and Anthropic is now cutting its internal evaluations off from the live internet.
Satya Nadella calls for an ’emergency brake’ on AI models: Microsoft’s CEO wants every meaningful model action logged with tamper-proof evidence and an authorised person able to pause a model mid-task. Firms should assume a model is compromised from the start, he argued.
Singapore SMEs save time with AI, but messy data stalls scale-up: Small businesses cite time savings as AI’s main payoff, but systems that are not ready stop pilots from running more of the business, mirroring the scaling gap larger firms face.
India’s Clueso raises US$10M Series A for AI business video: Dharana Capital led the round, lifting total funding to US$12M. Clueso, used by Atlassian and Zendesk among 1,000-plus companies, will spend the money on enterprise sales and stronger agentic editing tools.
THOUGHT LEADERSHIP
US-China trade enters managed rivalry; SEA firms must adapt: Shawn Balakrishnan argues Trump’s May visit to Beijing produced a transactional framework, including new Boards of Trade and Investment, that Southeast Asian businesses must now plan around.
Deeptech founders should split their funding needs by job: Jun Yan argues one round size hides money doing different jobs, from funding an unproven product to buying equipment, carrying inventory or financing receivables, and each calls for a different kind of capital.
Human work is priced by the hour, machine thought by the token: Sayan Ghosh notes that only machine intelligence prices are falling fast, while timesheets and pricing models still assume human hours, forcing organisations to rethink how they value knowledge work.
Widespread AI tool use does not make a firm AI-ready: Elvis Lau argues that staff using ChatGPT and Copilot daily, plus a handful of production pilots, can still leave enterprises short of genuine AI readiness at the organisational level.
SEA’s SMEs should chase AI value, not just automation: Arnold Warner argues the real question is where AI creates measurable value without disproportionate complexity, cost or risk, a distinction that matters for the region’s small businesses.
Stop building new apps; build inside the ones users already open: Citing Sensor Tower, Manit Parikh notes users open around ten apps a day and global downloads grew just 0.8% last year, so founders should build inside existing platforms.
AI video is fast to generate and slow to make usable: Drawing on his work with AI-generated cinematic video, Jay Chua explains why prompt-to-scene speed is no guarantee of producing a usable video, where most of the effort now sits.
SEA retailers need observability to protect AI customer service: With Singapore offering a 400% tax deduction on AI spend for smaller retailers, Simon Rizkalla argues that real-time monitoring of AI systems decides whether the customer experience holds up.
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