Asia hits the AI accelerator as Britain faces being left in the digital dust, warns ALEX BRUMMER

Britain likes to think that it has a competitive advantage in AI. In developers such as Google-owned DeepMind and Cambridge-based but New York-quoted Arm Holdings, the UK has been, and doubtless will continue to be, a great source of innovation. How much of the wealth created will accrue to British investors, contribute to growth or boost the Exchequer is more questionable.Indeed, while Britain and other Western democracies debate whether data centres and AI capacity are a good thing, because of power and alleged water demands, Asian countries have embraced this technology to amazing effect.Some 30 years ago, the boom on the Pacific Rim, built on debt, collapsed, triggering a global slowdown and a series of bailouts by the International Monetary Fund (IMF). This time, however, the IMF thinks it could be different. Asia’s tiger states are booming on the back of AI. Korea, Singapore, Vietnam, Malaysia, Thailand and China are all beneficiaries of this technological shiftThere will be volatility, as there has been on South Korea’s exchanges in the latest trading session. Concern that leading-edge memory chips developed by Micron Tech could be displaced by a technological breakthrough reported by China’s Chang X led to a sharp fall in the Kospi index.The reality is that Asia’s tiger states are booming on the back of AI. Korea, Singapore, Vietnam, Malaysia, Thailand and China are all beneficiaries of this technological shift.There is an assumption that the competitive edge lies with America’s biggest players such as Anthropic, OpenAI, SpaceX and the ‘Mag 7’.The battle for ideas and speed of developing new tools means we simply do not know who the ultimate winners will be.The belief that Silicon Valley will always come out on top is being challenged. After all, it was Korea’s Samsung that reported extraordinary record profits of £60bn in the third quarter of 2026.Together, the Asean emerging markets (excluding China) are forecast by the IMF to grow by 4.4 per cent this year and 4.3 per cent next, driven by the halo effect of AI development and production. Catching the AI train, for all its risks, is proving a fast track to economic expansion.The Fund calculates that the 32 countries benefiting from AI account for 95 per cent of global growth, against 54 countries in April this year. It is hard to resist the force, momentum and rapidity of the change.OverheatedSo far, it has been commercial organisations that have been the victims of digital villains and AI agents.As if France does not have enough problems, the cyberattack on supermarket groups Carrefour, Monoprix, Intermarche and Cooperative U, which saw fridges heat up to as much as 50C (122F), illustrates the scale of the challenge.Placing AI at the heart of systems may bring efficiencies, but it also means that, by attacking a controlling agent, hackers can menace several targets at the same time, going beyond the wrecking tactics used against Jaguar Land Rover, the Co-op, Asos and others.It is, however, one thing to have a can of baked beans nearby in case the lamb chops defrost in the freezer. It is quite another to consider the damage that could be wreaked on financial systems.When Bank of England governor Andrew Bailey raised concerns about the frightening powers of the Anthropic Claude Mythos tool and the chaos it could wreak on financial systems at the spring session of the IMF in Washington, it seemed far-fetched. Six months on, it is a case not of how but when. Time to buy that safe box.Chilling outThe Thai government has done its best to endear itself to the hundreds of journalists from around the globe gathered for the annual IMF/World Bank meetings. But it has made a fatal error.With temperatures outside at a soggy 35C, it has located the journalists in the bowels of the Queen Sirikit National Convention Centre, adjacent to the car park.The air conditioning is turned up so high that the press room has been nicknamed the ‘ice box’. Colleagues from Africa are so chilled that they sit typing their stories in heavy coats, scarves and woolly hats.Siberia in the tropics.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you