LIVE MARKETS-Asia's AI exposure spills beyond leading tech hubs

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ASIA'S AI EXPOSURE SPILLS BEYOND LEADING TECH HUBS

With artificial intelligence driven expenditure and optimism propelling markets to record highs from Wall Street to Taiwan to South Korea, Nomura analysts expect the capex boom benefits to stretch beyond Asia's leading tech hubs.

South Korea takes the top spot in Nomura's ranking of different tiers of contribution by economies. Coming in a close second is China's self-contained system which includes high investment, self-sufficient server manufacturing and data center buildout.

AI researchers said China was closing in on the U.S. techology lead through risk-taking and innovation, with two of the so-called 'AI tigers' startups posting strong debuts on the Hong Kong Stock Exchange in January.

Singapore's status as a regional data center hub and a re-export hub for services such as trading and logistics for regional hardware flows puts it in-line to gain.

In November, chip manufacturer GlobalFoundries GFS.O said it had acquired Singapore-based Advanced Micro Foundry in a bid to speed up AI data center networks.

Meanwhile, Malaysia and Vietnam play crucial roles in assembly and manufacturing. With the former seeing major data center investments while the latter leads in electronics manufacturing.

More than two-thirds of data centre capacity under construction in Southeast Asia had been committed in Malaysia, according to data center consultancy DC Byte with the country drawing in investments from U.S. tech giants Microsoft MSFT.O, Amazon AMZN.O, Alphabet .GOOGL.O and Chinese firms.

Spillovers into India, Thailand, Indonesia and Philippines are less pronounced but still expected through data center investments and smaller production and assembly services.

Microsoft, Amazon and Google have all announced commitmentsranging between $15 billion and $35 billion over the span of the next five to ten years in India to accelerate AI adoption and build data centers.

Mapping AI exposure within the region, Nomura mentions multiple channels through which economies are gaining including increased orders for specialty materials, advanced chips, precision machinery and AI servers.

"While the intellectual property for AI is largely US-based, much of the physical production takes place in Asia," Nomura analysts said.

Other avenues include rising capital expenditure within Asia to meet these needs, increase in third-party data centers for storage and processing as well as the increase in valuation of AI-exposed firms leading to equity wealth affects for investors.

World Trade Organization data cited by the brokerage shows that Asia dominated in AI-related trade, contributing nearly two-thirds of global AI trade growth in first half of 2025 with concentration in Northeast and Southeast countries.

Still, Nomura analysts remain optimistic that the region will see more diversified upsides as tech diffusion grows.

(Twesha Dikshit)

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