Washington – A new report from RBB Economics assesses competitive dynamics in Generative AI across the Asia-Pacific (APAC) region. It examines whether concerns raised by competition authorities about concentration and potential adverse consumer outcomes have materialized to date. The report covers the foundation model, deployment platform, and application layers of the GenAI stack, drawing on six APAC case studies. The report finds that the GenAI sector in APAC shows characteristics consistent with healthy competition, with continued high levels of investment, entry, and innovation.
The report finds five mechanisms that promote competitive outcomes.
- Multi-homing is prevalent and switching costs are low, as demonstrated by Chinese developers rapidly migrating from OpenAI’s API to domestic alternatives when access was blocked.
- Platforms favor openness, with firms like Samsung offering rival and in-house models, and Tencent and Baidu integrating rival models alongside their own.
- Modular design enables organizations like CBA to maintain simultaneous partnerships with multiple providers without lock-in.
- Intermediaries such as TCS and orchestration platforms like LangChain facilitate foundation model comparison and switching.
- Regulatory diversity, local language requirements and cost-efficient training techniques support a wide range of competitors and help prevent region-wide dominance by any single provider.
The report concludes that competition is currently working effectively, with no evidence of concerning concentration levels. The report cautions against premature intervention, noting the risks of disrupting competitive processes or chilling innovation during critical development phases, while acknowledging that continued monitoring remains prudent.
The following can be attributed to CCIA Chief Economist and Research Center Director, Trevor Wagener:
“Despite regulator fears of an AI monopoly, the evidence from Asia-Pacific points the other way. Switching costs are low, entry is high, and no single player is pulling away from the pack. This is a competitive sector, and it should be treated as one.”
