Enterprises in the Asia-Pacific region (excluding Japan), particularly small and medium-sized businesses (SMBs), are accelerating their investments in artificial intelligence (AI), viewing it as a key driver of growth and competitive advantage, according to a recent report by research firm IDC.
The report, IDC FutureScape: Worldwide Small and Medium-Sized Business 2025 Predictions — Asia/Pacific (Excluding Japan) Implications, forecasted that by 2027, half of the region’s smaller enterprises will substantially restructure their IT spending to prioritize AI.
This transition will be propelled by advancing technologies, changing vendor pricing models, and the growing imperative for AI capabilities in an increasingly competitive market environment.
The report noted that 65 per cent of mid-sized companies in the region now see AI—including generative AI (GenAI)—as a fundamental business function, comparable to ERP systems or ecommerce platforms. Moreover, over 50 per cent of these companies intend to allocate up to $1 million toward generative AI (GenAI) initiatives in 2025 alone.
“AI in particular is no longer a luxury—it’s a necessity. It is emerging as a key enabler, transforming workflows, optimizing decision-making, and unlocking new opportunities. SMBs that align their long-term technology roadmap with their business goals will gain a significant edge in the digital economy,” said Supriya Deka, research manager, SMB, Midmarket, and Digital-Native Business Program, IDC Asia/Pacific.
The report highlights that smaller businesses are placing greater emphasis on transparency from vendors before adopting AI solutions. By 2025, 70 per cent of SMBs in the region are projected to require well-defined AI use cases prior to committing to new AI or GenAI technologies.
At the same time, AI spending is starting to shape workforce strategies. In 2025, 30 per cent of SMBs plan to deploy targeted AI solutions to lessen reliance on manpower and address internal talent gaps, according to the report.
Vendors too are also realigning their strategies. By 2026, 80 per cent of AI-as-a-Service (AIaaS) vendors are projected to deliver customized offerings for SMBs, such as pretrained models that minimize the need for significant infrastructure outlays.
According to the report, cybersecurity—an escalating priority for smaller firms—is also poised for deeper AI integration. In response to mounting cyber risks, 35 per cent of SMBs in the region are expected to implement advanced AI-driven security solutions by 2027.
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