Executive summary

AI is evolving at breakneck speed and reshaping the strategic priorities of every forward-looking organization. Foundation models are mimicking human reasoning, AI-generated content is everywhere, and autonomous systems are moving into real-world operations. Behind the scenes, billions are being invested in data centers and infrastructure to power the next wave of AI breakthroughs. At the same time, it is hard to separate the signal from the noise, and the unique context in Southeast Asia (SEA) makes it challenging for CEOs in the region to define their AI strategy.

SEA CEOs are asking themselves three critical questions, each driven by the realities they face today.

Where should we focus? There is no shortage of bold claims around AI disruption, but the shape and scale of impact are still unclear. Will value pools disappear due to disintermediation? Will AI-native disruptors rewrite the competitive landscape, or will traditional business models endure? SEA has distinctive characteristics such as market fragmentation and persisting gaps in essential services. SEA online consumers, on the other hand, are among the most engaged in the world, spending 23% more time on social media than the global average, making the region ripe for digital innovation. In this context, will the impact of AI vary in SEA vs. other parts of the world? Where should SEA CEOs focus to get ahead of disruption and outperform the market?

What is the investment case? Companies are experimenting with AI, but most aren’t seeing bottom-line impact. Productivity gains alone rarely add to the P&L, especially in SEA where labor costs are low (average monthly wages are 7% of US levels), leaving limited room for headcount reduction as a big driver of ROI from AI investments. The SEA business landscape is unique (large-cap companies account for only 40% of SEA’s market capitalization vs. 60% in India) and much more dependent on trade (total trade was 89% of SEA GDP over the past decade vs. 57% globally), leading companies to be more conservative in their approach toward AI investments. How should CEOs think about AI’s true value in this unique context?

How do we orchestrate the transformation? Many companies have moved beyond pilots and isolated initiatives, but scaling enterprise-wide impact is still elusive. Our research shows that fewer than 20% of companies have meaningfully scaled generative AI. Transformation is even harder in SEA because of fragmentation across markets, regulations, and digital maturity, as well as inconsistent, siloed data and job displacement concerns. What can CEOs do to orchestrate change and unlock the transformation in their organizations?

Bain has been at the forefront of this wave, partnering with pioneers like OpenAI and advising clients globally on how to navigate this once-in-a-generation transformation. In our work with clients across the region, we’ve helped identify what’s holding progress back and, more importantly, what it takes to break through. We will attempt to address these questions in this guide, addressing myths along the way and sharing lessons from the AI transformations we’re supporting in the region.