Significant Moments of Change
Over the past two decades, the Asia-Pacific region has witnessed a significant rise in tech companies, transforming the lives of billions of people and becoming a global powerhouse in the technology sector. This transformation can be divided into three distinct phases.
Phase 1: Consumer Internet Apps
The first phase saw the emergence of e-commerce, payments, and social media apps, leveraging the region's vast internet population. Companies like China's Alibaba, launched in 1999, quickly became dominant players, vanquishing competitors such as eBay on their home turf. China's Tencent also made its mark in the e-commerce market with its messaging and payment app WeChat.
In Southeast Asia, the mass affordability of digital phones in the late 1990s paved the way for the development of e-commerce platforms. Pioneering firms like GGV Capital (Singapore) and IDG Capital (Beijing) imported the Silicon Valley venture playbook, including multistage funding, board guidance, and equity-for-pay. This led to the growth of venture capital (VC) in countries like Singapore, where East Ventures invested in Kudo, acquired by Grab, and Loket, bought by Gojek.
Phase 2: Strategic Technologies
The second phase was characterised by a focus on strategic technologies such as chips, aerospace, AI hardware, and robotics. Beijing's concerns over the outsize market influence of internet giants spurred this shift. China's tech success in this phase is evident in the rise of companies like TSMC, the world's most strategically important company, producing over 90% of the world's most advanced semiconductors (5nm and 3nm).
Phase 3: Open-Source Approach to AI
The third phase is currently underway, with China adopting an open-source approach to AI to make up for the mainland's lack of access to expensive American AI chips. This move is expected to intensify competition with global giants, as Chinese AI companies like Alibaba, Baidu, Tencent, DeepSeek, and Viettel invest heavily in AI research and development, creating large language models, AI-driven cloud services, and advancing AI technology in fast-growing digital economies across Asia.
The Impact of Innovation
The World Bank and Asian Development Bank data support this humanitarian win, with approximately 1 billion people lifted out of extreme poverty due to innovation, trade, and industrialization in Asia. Roughly 700 million people were lifted from poverty in China, 400 million from Southeast Asia, and an additional 300 million from the Indian subcontinent.
The Future of AI in Asia
As the AI boom continues, it's expected that the AI sector will attract more funds from state-owned megafunds and the mega-rich. Sovereign wealth funds like Temasek (Vertex Holdings) and family offices have already expanded their venture arms, and Chinese AI companies to watch include DeepSeek, Alibaba's Qwen, and Baidu’s Ernie Bot.
In conclusion, the rise of tech companies in the Asia-Pacific region over the past two decades has been nothing short of remarkable. With an open-source approach to AI and a focus on strategic technologies, Asia is poised to continue its dominance in the global tech landscape.
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