Asia Pacific faces AI spend cuts amid lack of clear strategy

A new study has shown a widening gap between the ambitions and actual execution of artificial intelligence strategies among enterprises in Asia Pacific.

Findings from ServiceNow's Enterprise AI Maturity Index reveal that while the uptake of AI continues to grow in the region, there are signs of strategic misalignment, budget reductions, and gaps in governance that may inhibit the realisation of expected business value.

AI spending trends

The survey, which gathered responses from 4,473 senior leaders globally - including 1,476 from Australia, Hong Kong, India, and Singapore - reported that several of Asia Pacific's most advanced markets are cutting back on AI spending. Specifically, year-on-year declines were recorded in Singapore (down 4%), Japan (down 3.3%), Australia (down 3%), and India (down 2.1%). These reductions come at a time when many C-suite executives continue to express optimism about the long-term potential of AI for their organisations.

Lack of unified AI vision

The study highlights that across the four markets, only 39% of enterprises report operating with a clear and shared AI vision for business transformation. Within the region, India stands out, with 52% of enterprises reporting strategic alignment, while Singapore (34%), Australia (33%), and Hong Kong (30%) lag behind.

Visibility into how AI is deployed across functions also remains limited, with only 40% of organisations on average reporting strong oversight of AI initiatives. Again, Indian organisations report better visibility (51%) compared to Singapore (36%) and Hong Kong (31%).

"You can't steer what you can't see. Enterprises are pushing forward with AI, but without a unified vision or clear line of sight across the business, they're essentially flying blind," said CK Tan, APJ Innovation Officer, Singapore at ServiceNow.

AI deployment in silos

The findings indicate that, rather than implementing enterprise-wide strategies, 68% of businesses are building and deploying AI through multiple internal task forces, resulting in siloed adoption. While this approach allows for experimentation, it also poses risks when governance frameworks are lacking or inconsistent.

According to the study, more than half of enterprises in Australia (57%), Singapore (56%), and India (51%) have yet to make significant progress in establishing governance structures to oversee the development and use of AI. The absence of common controls leaves organisations open to potential duplication of efforts, inconsistencies in service delivery, and increased exposure to data and compliance risks.

Workforce concerns

The rollout of generative AI technologies has also heightened workforce anxiety, particularly concerning job security. In Australia (60%) and India (57%), majorities of enterprises report employees expressing fears about job insecurity resulting from generative AI. In Singapore, the figure is 54%. Beyond job loss, employees are voicing broader concerns relating to data misuse and AI model hallucination, highlighting a growing demand for trust, oversight, and transparency in AI deployments.

"Many enterprises are building isolated AI capabilities without the connective tissue needed to scale responsibly. As deployments grow more complex, governance will become the difference between competitive advantage and operational risk. Leading with transparency and putting people at the centre of AI is essential to building trust and unlocking long-term value,' said CK Tan.

Workflow redesign drives value

The survey underscores that those organisations which rethink and redesign human-AI workflows achieve greater benefits from their investments compared to those that simply layer AI onto existing processes. In Singapore, companies that adopted new workflows were approximately three times more likely to report improvements in efficiency and employee satisfaction. In India, productivity improvements were twice as likely, while in Hong Kong, benefits relating to risk management and employee or customer experience were roughly twice as common among such businesses.

Despite these findings, most companies in the region continue to add AI solutions to their existing technology stacks rather than consolidate or integrate tools, leading to 'solution sprawl'. In Australia and Hong Kong, 61% of enterprises report layering new AI systems rather than replacing them with integrated options, and at least one in two in both markets are primarily adopting single-purpose AI solutions. In Singapore, this figure stands at 50%.

The study suggests that as AI complexity increases, more attention will be needed on governance, alignment, and strategic integration to ensure that investments translate into measurable business value.