Investing.com -- Artificial intelligence is reshaping Asia-Pacific equity markets, positioning the region at the center of global AI development in hardware, infrastructure, and applications.
The global AI market is projected to expand from more than $300 billion in 2025 to nearly $1.2 trillion by 2030, with about $1 trillion of cumulative investment expected in APAC.
Taiwan dominates AI foundry services, South Korea leads in high-bandwidth memory, and China has advanced in chips, generative AI software, and liquid cooling systems.
Japan contributes through robotics and precision manufacturing, while India provides IT talent and services. Together, these economies underpin nearly every layer of the AI stack.
The surge is visible in equity performance. Chinese AI chip, optical module, and software stocks have risen sharply, with some increasing 10x to 25x over the past three years. Korea's robotics and defense firms, along with Japan and Taiwan's materials companies, have also more than doubled year-to-date.
AI is also challenging assumptions about demographics and growth. Investors have long been cautious on China, Japan, and Korea because of shrinking workforces, but automation may upend that logic.
As BofA Global Research notes, "labor cost may no longer be a key constraint for GDP growth or a defining factor for nations' long-term economic competitiveness".
Governments across the region are prioritizing sovereign AI development. South Korea is building domestic large language models, Malaysia is developing AI chips, and Vietnam and Thailand are emphasizing data sovereignty.
These policies reflect geopolitical divides while creating new investment opportunities in infrastructure and applications.
Data centers are another focal point. APAC accounted for nearly 40% of global IT capacity in 2024, led by China, Japan, Singapore, and Australia.
China's market alone is forecast to grow at a 13% CAGR from 2024 to 2030, reaching about $46 billion, with AI demand expected to comprise a third of the total by decade's end.
Risks remain. Export controls, bottlenecks in advanced packaging and memory, and power constraints could limit expansion. Structural challenges such as water scarcity and seismic risks add to the pressure.
India's IT services sector faces its own turning point as automation disrupts outsourcing models. "What we're looking at is a world of 100bn AI agents working alongside us," said futurist Steve Brown.
"You can think of these as digital employees. Digital employees that work for electrons rather than dollars and cents".
That shift could reshape employment patterns and economic reliance on outsourcing.
AI is driving a new investment paradigm in APAC equities -- creating leaders in chips, infrastructure, and applications, while exposing vulnerabilities in traditional labor-driven growth models.
How the region balances capital inflows, policy choices, and demographic pressures will define the depth of AI's impact.