Southeast Asia is pouring billions into artificial intelligence infrastructure, but fragmented data systems, weak interoperability and governance gaps could determine whether its cities become truly AI-ready.

The region’s data-center capacity is projected to roughly triple by 2030 as demand for AI computing surges. But speakers at ATxEnterprise 2026 said the bigger challenge is turning that computing power into better transport, public services and urban management.

A recurring problem is that government agencies, transport operators and businesses often rely on legacy systems that were never designed to share data.

Without common standards and interoperable platforms, AI pilots risk remaining isolated experiments rather than city-wide solutions.

Industry leaders said cities should start with practical, low-risk projects and keep humans involved in decision-making, particularly in areas where mistakes can have serious consequences.

Singapore was cited as a regional model, with projects such as the Punggol Digital District showing how government and private companies can build shared smart infrastructure. But panelists warned against investing in AI tools without first understanding existing workflows.

Malaysia, Indonesia and Vietnam are also emerging as major destinations for hyperscale AI infrastructure, while Singapore remains a key regulatory and policy hub.

Sustainability is another hurdle. Data centers consume significant energy and water, putting pressure on cities trying to meet climate targets.

Speakers said environmental considerations must be built into data-center design, land use and supply chains from the start rather than treated as an afterthought.