EP-118: AI's Dual Impact on Jobs in Asia-Pacific

Artificial intelligence is disrupting the job market in Asia-Pacific in more ways than one, just like everywhere else. Albeit, to a different extent.

David M Solomon, the CEO of Goldman Sachs sparked a significant discussion last week when he said artificial intelligence (AI) is going to make a whole lot of jobs redundant in the financial industry.

Speaking at the Cisco AI Summit in Palo Alto, Solomon pointed out that investment banks could easily use AI to cut down on rote tasks like writing financial documents. He said AI can write 95% of an S1 filing in two minutes—something that takes a team of six people two weeks to finish.

Now that's truly remarkable.

Major investment banks like JP Morgan, Citi Bank, Morgan Stanley, and a few others have either set up executive-level positions to establish AI’s role across the organization or are using AI in quite an overbearing manner.

According to the International Monetary Fund (IMF), AI is all ready to disrupt 40% of jobs globally. Meaning, these many jobs can potentially be replaced by AI.

Google CEO Sundar Pichai's announcement last October that 25% of all new code in the company was AI-generated aligns with the IMF's prediction. Similarly, IBM CEO Arvind Krishna announced in 2023 that the company would pause hiring for back-office roles that could be replaced by AI, affecting about 30% of positions.

However, the impact of AI in a region as diverse as Asia-Pacific will be broad-ranged.?

About half of all jobs in the region’s advanced economies are exposed to AI, whereas developing economies will only see a quarter of the jobs being affected by AI, as per IMF.

On the other hand, the advanced economies in the APAC region have a lot of jobs that will be complemented by AI instead of being replaced. Developing economies, though less vulnerable to AI taking over jobs, won’t be that lucky.?

For example, the IMF predicts that about 40% of jobs in Singapore are rated to be complemented by AI, but the share in Laos for such jobs is merely 3%.

Notably, multiple reports have also signaled AI potentially affecting women in the labor force more than men. A 2023 report by Kenan Institute stated that about 79% of working women are exposed to AI-related automation versus 58% of working men. APAC will likely follow a similar trajectory.

On the brighter side, the World Economic Forum said that even though people would lose their jobs to AI and machine learning, new jobs would be created that would offset the changes.

For instance, an increasing number of people are upskilling themselves to learn AI-related tools in diverse sectors including AI development and engineering, oversight and governance, as well as learning how to collaborate with AI to increase productivity. A survey by Amazon Web Services (AWS) said that 99% of APAC workers believe learning AI-related tools could bump up their salary by 33% or more, on average.

Besides, the splashy investments made by big tech companies like Google, Amazon, Microsoft, Nvidia, and others toward setting up data centers in Southeast Asia to capture the rising AI demand would create more jobs.

For example, Microsoft, which said it would invest US$2.2 billion in Malaysia toward cloud and AI infrastructure, plans to equip 800,000 Malaysians with skills in AI by the end of 2025.

Similarly, AWS has trained more than 1.3 million people in Indonesia with cloud computing skills. Further, it is providing 140,000 Malaysian students with courses in cloud and AI and has partnered with government agencies in the Philippines and Thailand to upskill local workforces.

While this definitely boosts our confidence, it is yet to be seen whether these new jobs will make up for the jobs that will be lost to AI.

On that note, let’s dive into this week’s recap.

Buzzing Deals

? Singapore-based two-wheeler marketplace iMotorbike has closed its Series A funding round at US$10 million. This was the second tranche of funding—the first tranche came in June 2023. The funding was led by Headline with participation from Ondine, 500 Global, Gobi Partners, Astor Management, and Endeavor Catalyst. iMotorbike is an online marketplace for buying and selling pre-owned motorcycles. The company will use the capital to open new inspection centers and showrooms in Malaysia as well as to expand overseas with a branch in Taiwan in the pipeline. It also plans to hire skilled mechanics and operations staff.

? Indonesian agritech startup Banyu has announced the closing of a US$1.25 million Seed round from Intudo Ventures. The company will use the funds to expand its proprietary method for the production of high-quality seedlings and establish a seedling cultivation laboratory and nursery to grow its farming and exporting operations. Founded in December 2023, Banyu is a tech-enabled seaweed company that supports local farmers through high-quality seedlings, advanced farming techniques, and access to a stable income.?

? China-based Inventchip Technology has received US$137.5 million in the first tranche of its Series C round led by The National Manufacturing Transformation and Upgrading Fund. The round saw participation from CICC Capital and Goldstone Investment. Founded in July 2017, Inventchip Technology provides silicon carbide (SiC) power devices and integrated circuit solutions. The company will utilize the funds for product R&D as well as to expand its SiC manufacturing plants.

? Singapore-based indoor air quality monitoring startup uHoo has raised US$3.7 million co-led by Wavemaker Ventures and Menarco Development Corporation. The funding that came in a mix of equity and debt saw participation from Undivided Ventures, Lighthouse Canton, and CEO of Philippines-based office developer NEO Office Raymond Rufino. The company raised US$2.7 million via equity funding while US$1 million came as debt funding. uHoo provides solutions for indoor air quality monitoring, allowing customers to collect data on temperature, humidity, noise levels, and chemical pollutants. The funds will fuel uHoo’s expansion, particularly in the B2B segment, and drive the development of new hardware and software products.

? Singapore-based cybersecurity company Cyfirma has raised an undisclosed round of funding from Indonesian venture capital firm MDI Ventures. Cyfirma specializes in threat intelligence and external threat landscape management. This investment will help the company expand in Southeast Asia, particularly in Indonesia. It will use the fund to beef up its R&D efforts to enhance its capabilities in countering more advanced cyber attacks.

What Stood Out This Week

? Malaysia-based private equity firm Creador has closed its sixth fund at US$930 million. Most of the LPs in Creador’s sixth fund are returning investors including Asian Development Bank, which put in US$75 million in September last year. The PE firm launched its sixth fund in March 2024 with an initial target in the range of US$750 to US$800 million. It had closed its fifth fund in December 2022 at US$700 million.

? The founders and executives of Indonesia’s agritech startup eFishery might have inflated the company’s revenue by 5X according to an internal audit. The Temasek-and-Softbank-backed company has been allegedly maintaining two different financial records since 2018 to mislead shareholders, banks, and auditors. One set of financial records was exclusively for select executives. Last year, the company suspended its co-founders Gibran Huzaifah and Chrisna Aditya over the allegations of financial fraud.

? ByteDance will spend over US$12 billion to build AI infrastructure in 2025. It plans to create cutting-edge technology using AI and LLMs to amplify its growth. TikTok’s owner has set aside US$5.5 billion to purchase AI chips in China this year. There is also a plan to invest US$6.8 billion overseas to build its computing capacity to train AI models using Nvidia chips. This investment could be in jeopardy with Donald Trump at the helm in the US who is pushing to rein in Chinese companies building sensitive technologies in America. It is to be noted that about 60% of ByteDance’s domestic semiconductor orders would go to Chinese suppliers such as Huawei and Cambricon.

? Vietnamese electric vehicle manufacturer VinFast will enter India with two premium electric SUVs. During the India Auto Show in New Delhi, VinFast unveiled its VF6 and VF7 SUVs, which will directly compete with homegrown rivals such as Mahindra & Mahindra, Tata Motors, and others. China’s BYD already has a presence in India, the world’s third-largest car market. Last year, the Nasdaq-listed EV maker had said that it would invest US$500 million in India over five years to build a car and battery factory. VinFast counts Vietnam and North America as its two primary markets.

? Chinese private equity firm CDH Investments has made the first close of its second mezzanine fund at US$136.7 million. The company said several insurance firms, state capital investment platforms, and university endowments plan to commit capital to the second fund after the first close. It didn’t disclose when it would be able to close the fundraiser. CDH targets opportunities in China’s Internet data centers (IDC) and has invested in over 13 IDC projects totaling over US$687.6 million in investments since 2018.

And that’s the wrap for this edition of#ICYMI, our weekly curated highlights from the Asian tech ecosystem. Subscribe to receive it every Thursday and stay updated on the noteworthy tech developments you might have missed during the week. Like this newsletter? Share it with your friends and colleagues here.