AI: Why Southeast Asian startups are looking for the 'American dream'

Many startups in Southeast Asia are expanding their operations to the US, which is considered the global hub for artificial intelligence and technology development.

Since its launch in July 2024, JigsawStack — a startup founded by Yoeven Khemlani in Singapore — has quickly attracted customers from the US. The company creates small AI models to automate the work of software engineers, meeting growing demand from overseas markets.

Figures show that the number of venture capital deals in Southeast Asia tripled to 1,800 between 2015 and 2021. The region’s GDP grew more than 62% to $4.12 trillion, fueled by a growing middle class. But rather than focusing on the domestic market, many startups are looking to the US for bigger opportunities.

The number of venture capital deals in Southeast Asia increased significantly from 2015 to 2023, peaking in 2021 with 1,771 deals. (Source: PitchBook)

Many founders believe that the US market has high purchasing power, is more concentrated and less price sensitive, making it easier for them to reach customers and scale up than serving individual countries in Southeast Asia.

In addition, the US is leading in artificial intelligence and technology, making it an attractive destination for startups. "We are living in an AI-first world , where the US is at the center of breakthrough advances," said Shailendra Singh, CEO of Peak XV.

Southeast Asian startups have a huge cost advantage, offering more efficient solutions than their US counterparts. However, they also face many challenges, especially the cost of importing hardware due to tariffs on China.

In addition, expanding to the US also makes it easier for companies to raise capital. “Investors tend to underestimate foreign startups,” said Nataliya Wright, a professor at Columbia Business School. “But if a startup has customers in the US, it will have a big advantage in future fundraising rounds.”

Startups can raise capital more easily when they are present in the US.

Despite expanding to the US, many companies still choose Singapore as their headquarters. The country has attractive tax policies, no capital gains tax, and many supports for technology companies.

Some startups have adopted a split-personnel model, sending one co-founder to the US while the other continues to manage operations in Southeast Asia. For JigsawStack founder Khemlani, having a presence in the US was crucial to connecting with customers and expanding their network.

JigsawStack Founder Khemlani.

With AI technology growing rapidly, Southeast Asian startups are seizing the opportunity to enter the US market, which will not only help them grow but also help shape the global technology landscape in the coming years.

Minh Hoan (Source: Business Insider)

Source: https://vtcnews.vn/ai-ly-do-startup-dong-nam-a-di-tim-giac-mo-my-ar946720.html