Forrester Predicts AI Shifts for Asia-Pacific by 2025: A Transformative Year for AI Adoption

The Asia-Pacific (APAC) region is on the cusp of a significant artificial intelligence (AI) transformation, driven by a shift from experimental AI projects to real-world implementation with measurable returns. 

Forrester predicts that AI Shifts in APAC by 2025 will focus on localized AI models, regulatory challenges, infrastructure adaptation, and ROI-driven AI adoption. 

As businesses seek to enhance customer experiences, optimize operations, and navigate evolving AI regulations, understanding these predictions is crucial for firms looking to stay ahead in one of the world's fastest-growing technology markets.

You may also want to read this: New Generations Lead the GenAI Charge in Asia-Pacific Region: A 2024 Deloitte Report

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Key AI Predictions for APAC in 2025

1. Forrester Predicts AI Localization: 60% of Firms to Adopt Regional AI Models

• Forrester predicts that 60% of APAC firms will deploy regionally trained large language models (LLMs) to cater to diverse linguistic and regulatory environments.
• Unlike the U.S., where AI models rely on public cloud computing, 90% of large enterprises in Greater China will shift to hybrid AI models using private cloud infrastructure.
• Geopolitical factors, particularly U.S.-China tensions, will drive regional AI adoption:
  
  • China and ASEAN countries will accelerate AI adoption to reduce reliance on Western AI technologies.
  • Locally produced AI chipsets will power over 5% of AI computing in China, marking a significant step towards technology self-sufficiency.
    
    

2. AI Governance: No Unified Regulatory Framework in APAC

• Unlike the EU AI Act, which provides a standardized governance model, APAC lacks a unified regulatory approach.
• AI regulations across key APAC nations:
  
  • Singapore: Developed comprehensive AI governance frameworks and tools promoting responsible AI adoption.
  • China: Implemented strict laws against algorithmic misconduct, such as deepfake regulations.
  • India: Relies on existing criminal laws to govern AI applications.
• While regional efforts, such as the ASEAN Guide on AI Governance and Ethics, aim to unify regulations, compliance remains a country-by-country challenge.
  
  

3. AI in Business Strategy: Moving Beyond Experimentation

• 54% of APAC enterprises expect AI adoption to drive long-term revenue growth and innovation.
• Forrester Predicts that the top AI adoption priorities in APAC by 2025 will be:
  
  • Customer experience enhancement (21%).
  • Back-office automation (18%).
  • Sales automation and customer lifecycle management (16%).
• Key barriers to AI adoption:
  
  • 39% of firms cite data complexity as a key barrier.
  • 36% struggle with the high cost of AI implementation.
  • 35% lack well-defined AI use cases.
• AI leaders will pivot from early-stage pilots to scalable AI implementations to drive measurable ROI.
  
  

4. AI in Marketing: Rise of Synthetic Audience Data

• Forrester predicts that 20% of B2B brands in APAC by 2025 will use synthetic audience data for enhanced engagement.
• Why synthetic AI models?
  
  • Enables businesses to model customer behavior without violating privacy regulations.
  • Offers a cost-effective solution to simulate large datasets when direct data collection is restricted.
  • Provides a workaround for fragmented data privacy laws across APAC.
    
    

5. AI Resets and Infrastructure Challenges

• 75% of firms attempting independent AI adoption will fail due to complexity.
• AI infrastructure concerns:
  
  • Forrester Predicts a 25% reduction in AI investments by a major high-tech vendor due to chip shortages.
  • AI-driven self-service help desks will become the primary contact point for 50% of businesses, reducing dependency on human support teams.

Read Also: The Rise of AI-Generated Content: Expert Insights on the 90% AI-Powered Web by 2025‍

‍AI Adoption in the Financial Sector

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‍1. AI Models Transform Fintech and Banking

• 100+ digital banks will emerge in APAC by 2025, forcing traditional financial institutions to modernize.
• Forrester Predicts AI models will power fraud detection, digital banking personalization, and tokenized financial assets.
• Tokenization of assets will accelerate as blockchain-based AI models become mainstream.
  
  

2. AI Shifts in Cybersecurity: Fighting AI-Powered Fraud

• AI-driven fraud attacks are becoming industrialized, requiring advanced fraud detection AI models.
• Key AI adoption strategies for cybersecurity:
  
  • Real-time behavioral analytics.
  • Multimodal biometric authentication.
  • Automated risk assessment models.
    
    

3. AI Adoption in Cashless Payments

• APAC by 2025 will lead global cashless payment growth, with transactions expected to increase by 109% between 2020 and 2025.
• Forrester Predicts AI adoption in digital payments will be driven by:
  
  • E-commerce expansion.
  • Mobile-first economies.
  • Government-backed digital payment initiatives.

More on AI Adoption in the Financial Sector here: How GenAI with LLMs are Transforming Banking & Financial Services‍

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‍AI Adoption in Digital Business Strategies

• Forrester predicts that only 40% of APAC firms currently use KPIs to measure digital transformation success.
• Top AI adoption priorities for APAC by 2025:
  
  • Measurement intelligence: Firms will invest in AI-driven analytics to connect digital interactions to business revenue.‍
  • Competitive pricing strategies: 25% of APAC consumer brands will struggle to maintain customer loyalty amid economic slowdowns and price wars.
    
    

AI’s Strategic Role in APAC’s Future

AI will reshape businesses, technology, and governance in APAC, with organizations shifting from early AI experimentation to large-scale implementations focused on ROI. 

However, fragmented regulations, infrastructure challenges, and geopolitical factors will influence AI adoption rates.

As Sharyn Leaver, Chief Research Officer at Forrester, states:
"While bold AI experimentation will continue in 2025, leaders will also focus heavily on putting lessons learned into practice to ensure their investments deliver true business value." 

Organizations that adapt strategically, navigate compliance complexities, and optimize AI investments will emerge as leaders in APAC’s AI-driven future.

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As Forrester Predicts, businesses in APAC by 2025 will need advanced AI models to keep up with the region's evolving AI adoption trends, from customer experience enhancements to fraud detection and AI governance compliance. 

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