Southeast Asia's AI boom leaves 40 million gig workers exposed

May 25 (Asia Today) -- Southeast Asia is emerging as a major beneficiary of the global artificial intelligence race led by the United States and China, with booming investment in semiconductors and data centers. But analysts warn that about 40 million gig economy workers across the region, along with growing numbers of office employees, remain dangerously exposed to automation without adequate social protections.

The gig economy refers to a labor system in which companies rely on freelancers and short-term contract workers instead of full-time employees.

According to the South China Morning Post, Southeast Asian countries are rapidly moving into the global AI value chain.

Malaysian government data showed semiconductor exports are expected to reach about $117 billion, or about 178 trillion won, in 2025, accounting for roughly one-quarter of the country's total exports. More than 140 data centers are either planned or under construction, with investments exceeding $6 billion, or about 9.1 trillion won.

Singapore further strengthened its position as a regional AI hub after signing contracts worth at least $234 million, or about 355 billion won, with Google and OpenAI on May 19. Thailand also approved an integrated AI development plan worth about $774 million, or about 1.17 trillion won, in August last year.

However, behind the investment boom, pressures are simultaneously rising across labor markets, energy systems and asset markets.

Anuar Hussein, a Grab driver in Kuala Lumpur, is among millions of Southeast Asians who turned to platform-based work after losing factory jobs during the COVID-19 pandemic.

Six years later, even that livelihood is under threat.

Grab announced last month that it plans to launch pilot self-driving AI robotaxi services in Singapore later this year.

"So many people who lost jobs during COVID depended on ride-hailing work," Hussein said. "If robotaxis become widespread, I will lose my job."

The South China Morning Post reported that around 40 million people work in Southeast Asia's gig economy, with most lacking basic protections such as pensions, health insurance or safeguards against dismissal.

"For them, automation is a direct threat to survival," the newspaper said.

Office workers are facing similar risks.

British multinational bank Standard Chartered announced May 19 that it plans to replace about 7,000 back-office employees in India, Malaysia and Poland with AI systems by 2030.

Chief Executive Officer Bill Winters told Reuters the shift was "not about reducing costs" but about replacing "some lower-value human capital with the financial and investment capital we are deploying."

HSBC announced plans in March to cut as many as 20,000 jobs as part of its AI transition efforts, while Mizuho Bank said the same month it plans to replace 5,000 office workers in Japan with AI over the next decade.

According to the International Labour Organization, labor's share of global economic output fell 0.6 percentage points over the past decade to 52.4% in 2024.

Despite escalating energy risks linked to tensions in the Strait of Hormuz, companies in the region are continuing to accelerate AI adoption.

The war involving the United States, Israel and Iran has disrupted roughly 25% of global seaborne oil trade and one-fifth of global LNG exports that previously moved through the strait.

Although the crisis might have been expected to slow expansion of energy-intensive AI infrastructure, industry executives say the opposite is occurring.

Vivek Chathrath said companies are accelerating AI deployment rather than delaying it.

"If energy crises pressure profit margins, management ultimately asks whether work previously done by humans can be handled in a better way," he said.

Lily Mou said during the Semicon Southeast Asia 2026 conference in Kuala Lumpur earlier this month that the automation trend had become irreversible.

"There is no going back," she said. "We cannot return to an era of building physical systems through trial and error when machines can now be verified through simulation."

A February survey by consulting firm McKinsey & Company found about two-thirds of major Southeast Asian companies have already fully adopted AI or are expanding implementation.

Yet while automation accelerates, worker protections remain far behind.

In a June 2025 report, the World Bank urged governments to simultaneously expand AI job training and strengthen support programs for displaced workers.

But the South China Morning Post reported that many Southeast Asian countries still lag in providing even basic AI skills and ethics education.

For millions of economically vulnerable workers in the region, the difference between unemployment and low-paid precarious labor may remain largely theoretical, the newspaper said.

-- Reported by Asia Today; translated by UPI

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This story was originally published May 25, 2026 at 8:27 PM.