An AI model that's light on SME pockets

In The Prompt this week, we dive into Recursal’s budget AI model for startups and Indonesia’s AI infrastructure problems. [Read from your browser]( The Prompt 🤖 Welcome to The Prompt! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in AI. Get all our content, including The Prompt, by [registering for a Tech in Asia account](. Alternatively, [sign up here]( if you just want to receive this newsletter. IN FOCUS In today's newsletter, we look at: - [A new budget AI model for startups in SEA]( - Indonesia’s attempts to build its AI infrastructure --------------------------------------------------------------- Hello {NAME} Artificial intelligence has become more sophisticated over time. But despite these rapid advancements, its development is known to cost an arm and a leg. AI demands immense computing power and vast amounts of data. Plus, it involves hiring highly skilled talent, which doesn’t come cheap. In this week’s Big Story, my colleague Scott explains the AI model of open-source AI firm Recursal. The model, called receptance weighted key value (RWKV), can reduce the costs for SMEs in Southeast Asia looking to build their own AI solutions for businesses, the firm says. RWKV enables companies to support their AI solution through the use of more cost-effective GPUs, those typically required to play a video game, for instance. This reduces the amount firms usually spend on AI chips from thousands to just hundreds of dollars. Meanwhile, in the Hot Take, I discuss Indonesia's state-owned firm Telkom and its plan to build an AI data center with a 500 megawatt capacity by 2030. With limited AI-related investment entering the country, the Indonesian government needs to accelerate infrastructure development even further. Otherwise, Indonesia risks falling further behind neighboring countries in AI adoption and development. – Jofie  --------------------------------------------------------------- THE BIG STORY [Can’t afford $300k for AI chips? New model for SEA cuts high costs]( Startups looking to build AI models face heavy costs, but Recursal is mixing old and new tech to make market entry easier.  --------------------------------------------------------------- THE HOT TAKE Indonesia playing catch-up with neighbors in AI infrastructure Here’s what happened: - Indonesia state-owned firm Telkom is [targeting]( to build data centers with a total capacity of 500 megawatts by 2030. - These data centers are needed to accelerate AI adoption in the country. - Currently, Telkom has 34 data centers, 29 of which are domestic and five are located overseas. Here’s our take: Indonesia is the largest contributor to the digital economy in Southeast Asia. However, the investment flowing into the country for the AI sector is still [lagging behind]( its neighboring countries. According to data from Tech in Asia, of the US$51.5 billion in AI-related investments distributed across Southeast Asia since 2023, only US$1.9 billion went to Indonesia. Limited infrastructure remains an obstacle to broader AI adoption in the country. According to [data]( from ResearchAndMarkets, Indonesia had 68 data centers at the beginning of 2023, and 27 more data centers are currently being prepared. This year, Indonesia’s data center market is expected to have a volume of around 0.65 thousand megawatts and is projected to reach 1.4 gigawatts by 2029. This volume is still far behind Singapore, which has more than [70 data centers]( with a total capacity of 1.4 gigawatts. To catch up with its neighboring countries, Indonesia needs to accelerate the development of infrastructure that supports this sector. Telkom's target to build its data centers by 2030 will not be enough. By that year, Singapore will likely have a much larger capacity. Indonesia needs other companies to also help accelerate the development of AI infrastructure in the country. Aside from Telkom, other firms that operate data centers in Indonesia are [NTT]( and [DCI Indonesia](. Between the three companies, they contribute more than 45% of the existing rack capacity in the archipelago’s data center market, according to ResearchAndMarkets. Rack capacity refers to the total amount of space available in racks to hold servers and other equipment in a data center. See also: [Why Indonesia trails in AI investment in Southeast Asia]( In addition to data centers, attracting AI chip manufacturing companies to operate in Indonesia could also bring in more investment to the country. Having more chipmakers will bolster local supply chains such as semiconductor fabrication, hardware assembly, and software development. Nvidia, for example, has [committed]( to building an AI center in Solo city, Central Java, through a partnership with the local telecom firm Indosat Ooredoo Hutchison. Indonesia also needs more talent to keep up. Microsoft, in its investment announcement in the country, said it would provide [AI skilling opportunities]( to 840,000 people in the archipelago. But what is missing here is the Indonesian government’s drive to push for AI adoption through infrastructure and skilling projects. Previously, the government [stated]( that AI would be included in its major strategic plans in 2025. However, the details of this plan have not yet been specified.  --------------------------------------------------------------- DEEP READS Check out these interesting reads about AI: 1️⃣ [How ‘Friendshoring’ made Southeast Asia pivotal to the AI revolution]( Malaysia is emerging as a major player in the global semiconductor industry, with companies like Intel, Micron, and Infineon investing billions in new facilities. The country benefits from strong infrastructure and decades of engineering expertise but faces challenges navigating geopolitical tensions, particularly between the US and China. 2️⃣ [VCs are so eager for AI startups, they’re buying into each others’ SPVs at high prices]( VCs are increasingly purchasing late-stage startup shares via secondary markets, particularly in AI companies, often through special purpose vehicles (SPVs). SPVs are commanding premium prices, but this poses risks for buyers who don't gain direct shares or influence in the startups. 3️⃣ [AI can help bridge Southeast Asia’s 1,000 languages—but the work ‘has to be done by Southeast Asians’]( Southeast Asia’s linguistic diversity - the region has over 1,000 languages - presents challenges for businesses trying to operate across borders. AI is seen as a potential solution to bridge language gaps, enabling better collaboration and market access. However, some of the region's languages, like Khmer and Lao, are underrepresented in digital data, limiting AI's effectiveness.  --------------------------------------------------------------- SYNC 2024 - AI • SINGAPORE Get ready for a game-changer SYNC 2024 is taking on a new dimension. This year, we're diving deep into the world of artificial intelligence - the force that's reshaping industries, driving innovation, and redefining the future of business. AI is already here, but it's only just beginning to reveal its true potential. This summit will bring together Asia's leading experts to explore how AI is transforming business models and discuss the latest advancements in the sector. Expect candid conversations on how AI can be harnessed to address global challenges, from maximizing the human-AI synergy to tackling climate change. Think you would be a good fit? [Apply for an invite today]( - we carefully review each application, and only select individuals will be informed of ticketing details.  --------------------------------------------------------------- EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Jakarta on October 23 - 24]( Get ready to be inspired at the upcoming #TIAConferenceJKT. We are bringing together the region's top minds for two days of in-depth discussions, groundbreaking ideas, and unparalleled networking opportunities. Hear from Edward Tirtanata on the D2C user preferences across SEA, what it takes to build an AI startup from Wiz.AI’s Jennifer Zhang, and Gibran Huzaifah shares how he built SEA’s first agritech unicorn. [Get your tickets at 45% off now!]( [Tech in Asia’s Founders Meetup: Thailand on September 11]( Is Bangkok's tech scene ripe for disruption? Get the inside scoop from A2D Ventures’ Ankit Upadhyay, WV’s Wing Vasiksiri, and The Radical Fund’s Paul Ark on unlocking growth potential, mastering investment strategies, and connecting with the right people. [Get your early bird pass at 20% off now.]( Hurry, promo ends August 26! [DevOps Decoded: Industry Insights & Networking on September 12]( DevOps is evolving at a breakneck pace - do you have what it takes to adapt and thrive? Uncover the hottest trends as we dissect success stories and arm you with the knowledge to future-proof your DevOps strategy. [Apply for an invite now.]( [Leadership Collective: Building at Scale on September 26]( Consider this your backstage pass to the expanding intersection of design and AI, where creativity meets algorithms and workflows transform into intelligent, collaborative ecosystems. We're unpacking how AI can help you improve traditional processes, build innovative products, and gain a competitive edge. Seats are extremely limited - [apply now.]( [Startup Factory at Tech in Asia Conference Jakarta]( Are you a founder looking for inspiration, connections, and the latest tech insights? Look no further than the Startup Factory at #TIAConferenceJKT! This exclusive space, designed for founders like you, will showcase the region's most promising tech companies. Get up close and personal with the innovators shaping the future, discover the trends driving the tech industry, and connect with potential partners and investors. Competition is fierce and limited booth slots are available. [Apply now!]( --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter [here](. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you soon! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center](. 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