In January 2025, as world leaders gathered in Davos for the World Economic Forum, the consensus was clear: American tech giants were leading the charge in the global race for artificial intelligence (AI), while Asia lagged far behind. At the time, China’s AI prospects were grim, with many experts citing heavy government regulations as a significant obstacle to innovation. Meanwhile, countries like Japan, South Korea, and Southeast Asia were seen as too fragmented or underdeveloped to compete with the might of Silicon Valley.
However, just as the Davos crowd was settling into their predictions, the tide began to shift. A series of surprising developments turned the conversation on its head, signaling that Asia’s influence in AI was far from a pipe dream. These changes underscore a profound shift in the global AI landscape, one where upstart companies from the East are challenging the West’s dominance.
DeepSeek’s Breakthrough: China’s Unexpected AI Challenger
In the weeks following the Davos meeting, the first bombshell dropped: DeepSeek, a relatively unknown AI arm of a Hangzhou hedge fund, unveiled its new large language model, R1, which matched the performance of OpenAI’s latest model. This was a major surprise. Not only had DeepSeek come out of nowhere, but it also developed the R1 model for a mere $6 million, a fraction of the billions spent by American tech giants on their AI platforms.
As Nicholas Gordon notes in his deep dive into DeepSeek’s rise, the breakthrough wasn’t just about creating an AI that could rival OpenAI. It demonstrated that Chinese companies are not just capable of innovation—they are thriving in the world of AI. The development of R1 suggests that the frontier for AI innovation is much wider and more open than many experts in the West had assumed. The fact that DeepSeek managed to achieve such a significant milestone with minimal resources highlights the growing power of Asia’s AI industry and its potential to disrupt the status quo.
“R1 astonished not only by coming out of nowhere, but also because it was trained for a fraction of the cost, proving that innovation can emerge from unexpected places,” Gordon said. This is a clear message to the West: Asia is no longer a follower in the AI race, but a formidable player in its own right.
SoftBank and Masayoshi Son: Japan’s Strategic Moves in AI
The rise of DeepSeek was followed by another notable moment in the AI landscape: Masayoshi Son, the billionaire Japanese tech investor and head of SoftBank, made a surprise appearance at the White House. This marked a significant development in the global AI arms race, as President Donald Trump announced that Son’s SoftBank Group would lead a $500 billion partnership to revolutionize America’s AI infrastructure.
Not stopping there, on April 1, 2025, SoftBank committed to investing up to $40 billion in OpenAI, valuing the AI giant at a staggering $300 billion. Son, who has navigated highs and lows in his career—most notably his Vision Fund’s struggles—has bounced back in a big way. His investments are now critical in shaping the future of AI, with SoftBank playing a pivotal role in funding the next generation of technology.
In a profile of Son, it’s clear that despite his previous setbacks, his focus on AI has positioned him as one of the most powerful figures in the industry. SoftBank’s investments are not only changing the landscape of American AI but are also solidifying Japan’s place at the table in this high-stakes global competition.
Johor’s Data Center Boom: Southeast Asia’s Gateway to AI Power
While China and Japan are leading the charge in AI innovation and investment, another region within Asia is quietly making moves that could soon put it at the heart of the AI revolution. The southern Malaysian state of Johor is emerging as one of the world’s most critical data center hubs, particularly for the development and training of large language models (LLMs).
Unlike traditional data centers, which are optimized for running video games or handling financial transactions, those devoted to AI model training require vast amounts of land, water, and—crucially—cheap and abundant power. The good news for Johor is that it has an abundance of all three. Positioned just across the strait from Singapore, Johor is perfectly located to become a powerhouse for AI infrastructure, particularly as demand for AI resources continues to soar.
Malaysia is racing to provide the resources and infrastructure needed to support this growing demand. The development of these specialized AI data centers represents a strategic investment in the future, positioning the country to play a key role in the global AI landscape. With the right resources, Johor could soon become a critical part of the supply chain for AI development, serving as a central hub for businesses and researchers working to push the boundaries of AI technology.
The common thread running through the rise of DeepSeek, SoftBank’s strategic moves, and Johor’s data center boom is clear: Asia is no longer an afterthought in the AI revolution. While the West may have dominated the conversation for years, Asian companies and investors are now critical players in shaping the future of AI.
The events unfolding in 2025 suggest that the traditional power dynamics in AI development are rapidly shifting. The narrative that American companies hold a monopoly on AI innovation is quickly becoming outdated. China, Japan, and Southeast Asia are stepping up to the plate, and their contributions to the AI landscape are proving that the future of technology is not limited to Silicon Valley.
For those in the West who have discounted the influence of Asia, these developments serve as a wake-up call. With a combination of innovation, investment, and strategic resources, Asia is poised to be an even more influential force in the AI space in the coming years.
