The risks and rewards of Generative AI opportunity in Asia

There is no escaping generative AI. It seems not a day goes by in the business world without another landmark iteration, playbook launch, or attention-grabbing concerns over the very existence of humanity.

Artificial Intelligence is nothing new, of course, but the launch of ChatGPT in November 2022 was a tipping point similar to the dawn of the internet and launch of the iPhone.

The good news is that the Asia & ANZ region is well positioned to take full advantage of the AI opportunity. That’s according to the latest Global AI Index – a deep analysis of 62 countries that has been producing annual reports for four years.

Those countries are ranked according to investment, innovation and implementation, and while the US is a runaway leader with a score of 100, China is in second place (62) and Singapore third (50).

Singapore is the big mover, placing tenth in 2020 and now beating the UK into third spot. South Korea (40) is also moving in the right direction, from 8th in 2020 to sixth in 2023. Of other countries in the region, Japan scores 30, India 31, Australia 31, and Taiwan 25. For context, the UK scores 42 and the UAE 24.

This looks like positive news for the region as governments invest in AI and infrastructure, but what does it mean for your business? And what are the rules and regulations that you need to be aware of?

There has been a surge in AI adoption in the region, according to a report by Dataiku. It says Southeast Asian firms are expected to increase spending on AI by 67% this year compared to 2022. The report also says AI platforms will be the fastest-growing software category up to 2026, with spending on AI solutions in Southeast Asia growing by almost 300% to hit US$646 million in 2026.

Maximise rewards and minimise risks of AI

Companies are clearly clamouring for a slice of the generative AI pie, investing heavily in technology that they likely do not fully understand, and this could open up numerous risks.

Anthony Stevens is a former Partner and Chief Digital Officer at KPMG and published author of Chasing Digital: A Playbook for the New Economy. As the founder and CEO of 6clicks – an AI-powered risk and compliance platform headquartered in Australia – Stevens is well placed to provide insights on how best to maximise rewards and minimise risks when adopting Generative AI.

“Generative AI for business presents two primary risks. One is from the source material, and the other is in terms of the finished product,” says Stevens. 

“Because generative AI produces content based on the input it uses or receives, organisations must ensure that they are not breaking copyright laws or restrictions through improper or unauthorised use of material that is owned and protected by others. Similarly, businesses need to ensure that their own protected or proprietary content is not exposed through the use of generative AI.”

Compliance is key when it comes to AI

Stevens highlights rumours about company secrets, source code and confidential data that have been unintentionally released publicly through generative AI, and the importance of monitoring output.

“Using generative AI without supervision is risky and, possibly, reckless,” he says. “Organisations will want to establish review processes that not only serve as a check and balance for created content, but also will continually assess the accuracy of the material. Very high degrees of accuracy consistent over periods of time may allow for higher levels of trust and less stringent review.”

While there is rightly caution required when it comes to embracing generative AI, the implications for not welcoming the technology with open arms could be even worse for the business.

That’s the view of Siva Kolisetti, Head of Technology, Operations and Compliance at RightData, who has more than 25 years of experience working with global firms including UBS, The Coca-Cola Company, Nike, Target, and Omega Healthcare.

“Generative AI has implications on various aspects of the business, with short term wins building into long term wins,” says Kolisetti. “Considerations of Generative AI should be founded on establishing strong data governance practices, addressing ethical considerations, fostering technical expertise, ensuring robust infrastructure, and engaging in continuous monitoring and improvement. 

“Navigating these factors will allow the businesses to harness the power of Generative AI – driving innovation, enhancing customer experiences, and gaining a competitive edge in today's evolving business landscape.”

For business leaders, that competitive edge is a double-edged sword. You have to innovate and take risks – or risk being left behind. That is what is driving governments to invest right now, and what is also facing the organisation – but the benefits are clear.

“The benefits can be significant in terms of lower costs, faster turnaround times and even finished products that are more accurate, representative and focused than those from traditional means of developing content,” says Stevens.

“Generative AI offers upside to a near limitless number of industries and applications. In particular, those that face the sheer volume and drudgery of tasks that could be automated are ones that could see the greatest transformation. The caveat is that Generative AI must be used responsibly, and it must be managed.”

Encouraging employees to embrace AI

Perhaps one of the biggest challenges leaders face when looking to adopt AI is, ironically, a human one. People are naturally concerned about their jobs, and the wider implications for their lives, as talk of machines replacing humans in various roles takes an icy grip.

Convincing employees to embrace AI could, then, be seen as them signing their own redundancy papers, especially if their job involves some of those mundane tasks that Stevens alludes to.

According to Goldman Sachs, 18% of work globally could be automated by AI, and 300 million full-time jobs could be lost to generative AI. The upside to those startling stats is that annual global gross domestic product could increase by 7%.

And although fewer jobs in emerging markets are exposed to automation than developed markets, Goldman Sachs says more than 10% of jobs in India and nearly a fifth in the Philippines could be lost to AI.

Despite this, Kolisetti is upbeat on Generative AI’s long-term impact, saying that integrating the tech in the near term will challenge human roles that are based on repetitive activities, process orientation, quick data insights and are rules driven. 

“Embracing AI starts with education of AI and what it means to the business and its employees,” says Kolisetti. “A winning culture towards such innovation is one of continuous learning and upskilling, creating value-added roles and moving its workforce to manage those functions. It will always be a journey of humans and technology complimenting each other.”

Stevens agrees, and says that generative AI should not be seen nor used as a replacement of humans, but rather an augmentation or extension. Ideally, these solutions will make people’s jobs better and more meaningful. Generative AI should reduce workload, and make employees more efficient, effective and productive. He says employees should understand what is and is not the aim of generative AI within their company so that fear and rejection can be reduced or eliminated.

How to take the Asian AI opportunity

As a business leader, you may be wondering how best to implement generative AI – how to cut through the noise and discern genuine benefits that you can tap into. You are not alone. There are so many new tools on the market, and so many developers looking to make a fast buck, that many in the C-suite are becoming overwhelmed.

Before you pull out the cheque book or sign that purchase order, it’s worth taking a step back. Sure, you don’t want your business to get left behind when it comes to generative AI but with the technology and solutions evolving so quickly, it might be worth taking your time to get it right.

This is backed up by a recent IBM study that found few AI projects are delivering the financial value silver bullet that shareholders might expect.

“Challenges include the current understanding of the risks and unknowns of these complex models,” says Kolisetti. “Then there is the availability of high-quality and diverse training data, as acquiring and curating such datasets can be time-consuming and resource-intensive. Additionally, ensuring ethical use and addressing potential biases in the generated content presents a significant challenge. Moreover, deploying and integrating these complex models into existing systems and workflows can pose compatibility and scalability challenges.”

Looking ahead, Stevens sees far more specialised use cases across nearly every industry and market, but at the same time, greater governance and management for its uses.

Regulation is coming – and fast. With Asia & ANZ being such a diverse region, that could prove problematic, but smaller nations may benefit from AI leaders like China setting early standards. 

That is now happening. In August, China introduced its own AI regulations, following on from those in the US and standards slated for adoption in the EU.

These 24 new guidelines encourage the development of AI technology in China for use in global markets, while having stricter controls for the domestic front. Some of the measures seem eminently sensible, such as clearly labelling content that is Generative AI, and not creating ‘false and harmful information’.

It is clear that no matter where in the world you may operate, there will be greater governance, regulation and compliance when it comes to generative AI. The good news is, if there is a relatively level playing field, this region could benefit more than most. 

“Pan-Asia/ANZ regions are well-positioned to benefit from generative AI due to growing labour shortages, escalating demands and requirements, increased complexity and the need to further compete in global markets,” says Stevens.

Clearly, it’s time to make smart business decisions.