SINGAPORE - The majority of companies in Southeast Asia that invested in artificial intelligence (AI) initiatives struggle to reap measurable financial gains, an inaugural report on AI adoption in Southeast Asia found.

The survey, conducted between July to August 2025, found that more than three in five companies had allocated between 11 and 40 per cent of their technology budgets to AI initiatives.

But nearly one in five companies reported no discernable impact on their earnings, and more than three in five firms said AI contributed less than 5 per cent of total operating profit.

These findings came from the 63-page report titled ‘AI in Southeast Asia: An era of opportunity’ by consultancy McKinsey & Company, government agency Economic Development Board and tech publication Tech in Asia.

At the launch of the report on Feb 11, Mr Vivek Lath, partner at McKinsey & Company said this could mean that companies had prioritised the wrong applications, or areas to spend money.

He said the lacklustre results could also be due to the lack of employee adoption.

The report is based on in-depth interviews with executives from 330 companies in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Malaysia. The companies span 10 sectors, including consumer goods and retail, healthcare and financial services.

“One of the executives actually said he had more AI pilots than the pilots at Singapore Airlines,” Mr Lath said, noting that some companies participated in isolated trials that did not involve an entire business workflow.

A system in a manufacturing plant that monitors and sends alerts on which machines require maintenance, and orders the parts needed for maintenance and repair is one example of AI use that involves an entire business workflow, he said.

Companies had focused on use cases like simple chatbots or an AI-searchable repository of guidelines and best practices when they should have integrated AI into current work processes to achieve specific busine...