HSBC says AI will create jobs. Southeast Asia should read the fine print first

The latest HSBC survey reveals that AI is expected to create significant spending among entrepreneurs. A total of US$367 billion is planned to be invested in AI over the next year, with 95% of business owners feeling positive about their business prospects. However, the survey focuses on wealthy business owners with at least US$2 million in investable assets, which may not represent the typical entrepreneur in Southeast Asia.

Big firms, with annual revenue over US$5 billion, intend to allocate 34% of their turnover to AI, while those with smaller revenue tend to invest less. This disparity highlights the gap in AI adoption between large and small businesses. Additionally, even the big spenders express concerns about high implementation costs, data privacy and cybersecurity risks, employee resistance, and difficulty integrating with legacy systems.

The report also predicts that AI will increase headcount for 44% of entrepreneurs, but this increase may not result in the same types of jobs. SMEs tend to adopt AI more slowly than large businesses, primarily due to fragmented data and slower approval processes. In Southeast Asia, Singapore SMEs are facing issues like messy data, which can hinder AI implementation.

To successfully navigate the AI revolution, smaller players should focus on high-volume, repetitive tasks, assign owners to AI pilots, and fix their data early on. Additionally, hiring individuals with the ability to audit AI output, not just perform tasks the AI can already handle, will be crucial for the long-term success of Southeast Asian startups.