- AI startups in ASEAN are prioritizing profitability over growth at all costs, due to slowing venture capital flows and concerns about a tech bubble.
- Bluente, an AI translation startup in Singapore, raised $2.6 million in seed funding in July 2024 and aims for financial autonomy by the end of 2026 through corporate subscriptions.
- This approach reflects a new pressure: startups must survive even without additional external capital.
- Venture capital for ASEAN AI startups in 2025 dropped by 20% compared to the same period, but remains higher than 2023 levels.
- Investors have become stricter regarding revenue generation plans, especially as AI valuations are perceived to be inflated.
- ASEAN currently has over 680 AI companies, with about 500 (over 70%) located in Singapore.
- The region accounts for only about 2% of total global AI funding, lower than its 4% share of global GDP.
- Total venture capital investment in Southeast Asian AI startups in 2025 is estimated at $410.5 million, down from $520.2 million in 2024 but higher than the $324.9 million in 2023.
- Global instability, US tariff wars, and governance scandals in Indonesia have made investors more cautious.
- The US still leads capital flows, exemplified by Meta’s acquisition of Manus in Singapore.
- Investors are starting to focus on deep niches and essential infrastructure rather than broad models.
- QAI Ventures is looking for “quantum AI” startups in sectors like life sciences and finance.
- GenAI Fund has poured over $6 million into its first batch of startups and continues to seek new enterprises.
- Some founders believe that actual AI demand is still rising, but operate their companies under the assumption that “hype could cool at any time.”
- Many experts argue that the bubble, if any, lies mainly in infrastructure and foundation models burning cash for compute.
- Startups that survive the correction will feature: lean operations, real customers, and sustainable pricing.
📌 The ASEAN region currently has over 680 AI companies, with about 500 (over 70%) located in Singapore. The region accounts for only about 2% of total global AI funding, lower than its 4% share of global GDP. Total venture capital investment in Southeast Asian AI startups in 2025 is estimated at $410.5 million, down from $520.2 million in 2024. Facing AI bubble risks, ASEAN startups are strategically shifting towards profitability and real cash flow. Lean enterprises focused on specialized niches and real paying customers are seen as candidates to overcome any upcoming market corrections.
