Asia Pacific enterprises shift to genAI spend amid AI cloud push

Forrester's latest research examines the status of artificial intelligence (AI) adoption across Asia Pacific and its implications for cloud strategy and enterprise innovation.

The two recent Forrester reports, The State of AI, 2024 and Embrace the AI-Native Cloud Now, provide an in-depth look at how organisations in Asia Pacific and worldwide are approaching generative AI (genAI) investments, use cases, and cloud-native transformations.

Regional investment trends

Forrester's The State of AI, 2024 report shows more than half of enterprise AI decision-makers globally have allocated between USD $200,000 and USD $400,000 to genAI so far. These figures signal significant but selective engagement with AI, as adoption patterns differ according to regional objectives and regulatory environments.

Within Asia Pacific, one of the more distinct trends is a change in budget allocation. Enterprises in the region are more likely to transition funding from predictive AI initiatives to genAI. According to Forrester, this shift indicates "a pragmatic, value-driven approach" to investments in artificial intelligence.

Leaders across Asia Pacific continue to place a premium on employee productivity and customer experience (CX), two goals that mirror global priorities. However, Asian Pacific organisations stand out by leading slightly on data literacy efforts, with 50% of respondents indicating a focus on upskilling employees for more informed, data-driven decision making.

Adoption and key use cases

GenAI applications are gaining traction in both operational and development domains. While IT operations is a top AI use case globally, 43% of Asia Pacific respondents said their firms are deploying genAI to support software development. This reflects the region's intent to bolster engineering productivity and accelerate the pace of digital transformation.

Despite ongoing investment, barriers continue to influence adoption rates. Data privacy is the primary risk cited by firms in the region. At the same time, Asia Pacific organisations report a more acute lack of specialised technical skills compared to their counterparts elsewhere. This underlines the need for expanded workforce enablement and training to meet enterprise AI ambitions.

Expectations for returns on investment (ROI) also demonstrate variability. Half of organisations surveyed anticipate realising returns within one to three years. Meanwhile, 38% are targeting a three-to-five year time frame. These figures suggest a diversity of approaches based on the scale and complexity of AI projects currently underway.

Generative AI continues to spur conversation and investment across industries, albeit at varying levels depending on regional priorities and challenges. Companies that strategically align their AI efforts with measurable outcomes around customer experience and employee productivity are already reaping returns. However, addressing barriers such as data privacy, governance, and skill shortages is critical to ensuring that AI investments deliver sustainable value.

That assessment comes from Frederic Giron, Vice President and Senior Research Director at Forrester.

Cloud strategies for the AI era

The Embrace the AI-Native Cloud Now report explores the evolving nature of public cloud platforms under the influence of widespread AI adoption. The report asserts that as genAI capabilities advance, Asia Pacific enterprises and governments must pursue AI-native cloud strategies to remain competitive and operate efficiently at scale.

AI-native clouds are described as moving beyond conventional infrastructure services to offer intelligent, automated operations and application capabilities. Key features highlighted in the research include predictive operations, autoscaling, and automated handling of security updates and system patches.

There is also a rapid expansion of AI-enabled development tools, such as TuringBots and low-code platforms that help streamline application design and deployment. These tools aim to raise developer productivity by automating much of the coding and debugging process while freeing teams to focus on strategic initiatives.

Furthermore, embedded AI APIs are increasingly underpinning both software-as-a-service (SaaS) solutions and bespoke applications, providing elements such as predictive analytics, personalisation, and intuitive agentic AI-driven user experiences. The report notes that to fully benefit from the AI-native cloud, organisations should integrate technologies such as retrieval-augmented generation (RAG) and adopt composable architectures.

The AI-native cloud is not just the next iteration of cloud technology; it is the paradigm shift enterprises need for their cloud strategies to remain competitive in an AI-driven world. Leaders must prioritise AI-native cloud strategies to improve operational efficiency, advance development capabilities, accelerate business innovation, and differentiate their customer experiences.

Those comments were made by Charlie Dai, Vice President and Principal Analyst at Forrester.

The research indicates that as organisations in Asia Pacific move towards more data-driven operations and cloud-native models, the focus will increasingly fall on workforce competence, governance, and risk management to ensure AI and cloud investments translate into sustained value and competitive differentiation.