Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Germany
Hong Kong
USA
Switzerland
Singapore
United Kingdom
The Asia AI industry has been experiencing significant growth and playing a crucial role in shaping the region’s technological landscape. With substantial investments, supportive government policies, and a rich talent pool, Asian countries, particularly China and Japan, have emerged as major players in the global AI arena.
Last year, the Asia-Pacific AI market was worth $22.1 bn, as per the IMARC Group. By the end of 2023, AI is expected to contribute around 40% of total information and communication technology investments in the region, significantly higher than the rest of the world. Furthermore, between 2021 and 2026, spending on AI in Asia-Pacific is predicted to expand at a CAGR of 24.5%, reaching $49.2 bn, as per IDC.
“Asia Pacific is expected to be the fastest growing artificial intelligence market during the forecast period (2022-2030). The rising investments by various organisations towards the adoption of artificial intelligence are boosting the demand for artificial intelligence technology,” said Prudence Research.
Japan, China leading Asia AI market
Two of the biggest players in Asia’s AI market are China and Japan. Aside from the United States, Japan has the world’s largest AI patent portfolio, according to the World Intellectual Property Organisation. Furthermore, 17 of the top 20 academic players in AI patenting are Chinese research outfits, as are 11 of the top 20 in AI-related scientific publications.
“China is also slated to outpace the rest of the world on AI software spend and to delegate $16.6 bn, or 21% of its software spend, on AI by 2025. Japan is expected to spend $4.1 bn on the AI software market in 2022, largely due to the country’s heavy investment in collaborative robots,” said Forrester.
Among other nations in the Asian AI landscape, India witnessed the highest increase in AI adoption due to Covid-19, outpacing major economies like the UK, Japan and the US. Over 70% of Indian organisations surveyed by PwC said they have implemented AI in some functional areas. Additionally, more than 90% of the Indian businesses surveyed stated that they are implementing or planning to invest in AI solutions to address current business issues.
Additionally, countries like Taiwan, Singapore, Thailand, and Indonesia have stipulated various targeted programmes and projects as a part of their national AI strategies to boost AI preparedness and deployment.
How to invest in Asia’s AI stocks?
With the Asia AI market exhibiting robust growth, the following companies might benefit from the industry trend.
Baidu
It is a Chinese technology company headquartered in Beijing’s Haidian District that specialises in Internet-related services and artificial intelligence. The company announced that its revenue increased by 10% year over year to 31.1 bn yuan ($4.32 bn) in the first three months of 2023. During the same period, its net profit increased by 48% to 5.7 bn yuan ($0.79 bn).
Primary listed on US’s Nasdaq (NASDAQ: BIDU), Baidu has a market capitalisation of $6.97 bn. The company’s stock has risen by 2.64% in the past year. It has a PE ratio of 27.54 and a forward PE ratio of 14.90. The stock has a price-to-book ratio of 1.55.
“We expect AI to drive business transformation with improving productivity and efficiency via higher IT spending and faster cloud adoption, with Baidu gaining cloud market share given its AI capabilities,” said Morgan Stanley in a note. “We believe China’s A.I. evolution is at an inflection point, and Baidu stock is the best play to capture the $7.0 trillion A.I. internet opportunity.”
Tata Elxsi
India-based Tata Elxsi, a Tata Group company, is a global provider of design and technology services for the automotive, media, communications, and healthcare industries. Tata Elxsi’s IoT division assists customers using design thinking and digital technologies such as cloud, mobile, VR, and AI.
The company registered a 23.9% year on year spike in revenue, amounting to Rs 837.9 crore ($0.10 bn) in the quarter ended March 2023. During the same period, its net profit surged by 47.1% year on year to Rs 201.5 crore ($0.024 bn).
Tata Elxsi’s stocks are listed on the Bombay Stock Exchange (BOM: 500408) and the National Stock Exchange of India (NSE: TATAELXSI). The company has a market cap of $5.60 bn. Since last year, the company’s shares have gained 85.21%. Along with that, the shares have a PE ratio of 22.44 and a price-to-book ratio of 23.20.
Appier Group
Headquartered in Taiwan, it is a technology firm that provides services which enhance the marketing and sales activities of other companies by using AI to predict consumer behaviour.
Appier Group registered a 32% year on year rise in revenue, amounting to 5.6 bn yen ($39.4 m) in 2023. During the same period, its gross profit surged by 32% year on year to 2.8 bn yen ($19.74 m).
The company has a market cap of $1.41 bn and is traded on the Tokyo Stock Exchange (TYO: 4180). The company’s shares have fallen by 155.4% since last year. It has a PE ratio of 4,181.45 and a price-to-book ratio of 7.58.
