APAC enterprises ramp up AI & GenAI spending to USD $23.9bn

Dell Technologies has published new research into the adoption of artificial intelligence (AI) across enterprises in the Asia Pacific (APAC) region, outlining key trends, challenges, and recommendations for organisations pursuing AI-driven transformation.

The research, conducted by IDC and commissioned by Dell Technologies and NVIDIA, surveyed 919 respondents from various APAC industries. According to the findings, organisations across the region are increasingly seeking strategic support from technology partners to overcome obstacles such as talent gaps, integration complexities, and data governance requirements as they progress from experimentation towards measurable business outcomes with AI, generative AI (GenAI), and machine learning (ML).

Spending and strategic priorities

The IDC InfoBrief, "Creating Your AI Implementation Blueprint", highlights the increasing investment in AI and GenAI in APAC. The AI-centric server market in APAC is projected to reach USD $23.9 billion by 2025, and 84% of organisations in the region intend to allocate between USD $1 to 2 million towards GenAI initiatives this year. While global organisations dedicate roughly 33% of their AI budgets to GenAI, the proportion rises to 38% in APAC, with the remaining 61% going to predictive and interpretative AI applications.

Despite this rising investment, the research notes that 35% of ASEAN organisations are still in the early stages of AI and ML deployments, while 21% report systematic progress, with adoption spreading across multiple business functions.

Deployment and operational trends

Deployment strategies are evolving, with public cloud and multicloud options remaining the leading choices in 2024. However, there is rising demand for private AI and on-premises deployments due to security considerations, cost, collaboration needs, and industry-specific regulations. As organisations shift from generic to specialised AI models, Chief Information Officers are prioritising data security and system integrity, regardless of where AI workloads are hosted.

Skills shortages, regulatory requirements, and the need to ensure data privacy and security are the primary concerns cited by organisations scaling GenAI. Over 72% of surveyed APAC enterprises indicate the need for data and AI knowledge in new hires. Many enterprises expect technology partners not only to assist with infrastructure and model development, but also to provide guidance on privacy, system trust, and regulatory compliance.

Industry focus and use cases

AI adoption is accelerating across industries such as banking and financial services, manufacturing, energy, healthcare, and retail, with GenAI use cases broadening to include customer service, supply chain, diagnostics, and fraud detection. According to the survey, 87.4% of APAC organisations are deploying more than 10 GenAI use cases this year, and 25.6% anticipate exceeding 100 use cases in 2025.

In banking and financial services, 84% of organisations have adopted AI and 67% have deployed GenAI, with spending in this sector projected to grow at a compound annual growth rate of 25–31% between 2023 and 2028. Key applications include fraud detection and process efficiency, with 72% of sector professionals anticipating disruption from GenAI within 18 months.

The manufacturing sector shows 78% AI adoption and 54% GenAI adoption, focusing on supply chain optimisation, predictive maintenance, and quality control, while healthcare organisations report 86% AI and 59% GenAI adoption for diagnostics, patient monitoring, and workflow automation. Energy companies and retailers are also adopting AI for grid management, predictive analytics, customer engagement, and operational streamlining.

Adoption barriers and external support

Despite growing adoption rates, talent shortages, data privacy, and integration complexities remain significant challenges. Many organisations are relying on external partners to fill these gaps: 60% depend on external developers for AI applications, compared to 30% developing in-house and 10% using commercial off-the-shelf solutions.

The report highlights a structured approach to AI adoption, prioritising high-impact use cases and building a strong foundation based on people, process, and technology. Workforce training, data governance, and collaboration with technology vendors are among the recommended strategies for maximising efficiency and ensuring long-term success.

"The Asia Pacific region holds immense potential to lead the way in AI adoption and innovation. Now is the time for enterprises to move beyond proof of concept (POC) and focus on achieving measurable return on investment (ROI)," said Chris Kelly, Senior Vice President, Infrastructure Solutions Group Speciality Sales, APJC, Dell Technologies. "The journey to consistent ROI is complex and requires comprehensive support across every stage – strategy, use case development, data preparation, governance, optimisation, and scaling AI implementations. With the support from technology partners, enterprises can overcome adoption challenges and accelerate their path to impactful, results-driven AI outcomes."

The findings are based on surveys conducted by IDC between August 2023 and August 2024, covering a range of sectors and highlighting trends, challenges, and strategic approaches to enterprise AI, GenAI, and ML implementation across APAC.