How AI Threatens Climate and Social Stability

The numbers from the World Economic Forum’s Executive Opinion Survey 2025 are striking, and they deserve far more attention than they have received.

Key Takeaways

• Business leaders in Southeast Asia are significantly more concerned about AI risks than their global counterparts (ranking them fourth worldwide), fearing the technology will widen existing regional fault lines like inequality, informality, and institutional fragility.
• The AI boom threatens to increase inequality by outpacing the readiness of small-to-medium enterprises and institutions, potentially impacting up to 164 million employees, with women and youth in service and entry-level roles expected to be the most affected by automation.
• The expansion of data centers—essential for AI—poses an environmental risk by driving up power demand in a region heavily dependent on fossil fuels, creating a contradiction to Southeast Asia’s climate transition pledges.

While business leaders and executives worldwide rank the risks from artificial intelligence in tenth place, their counterparts in Southeast Asia place them in fourth. Six ranks higher. That is not a marginal discrepancy; it is a flashing warning light from the people closest to the ground.

To be clear, the executives surveyed are not AI skeptics or technophobes. These are the same leaders overseeing key cloud and AI investment programmes from Microsoft in Indonesia and Malaysia, Singapore’s Green Data Centre Roadmap, and an AI research and development centre from Qualcomm in Vietnam. They are beneficiaries of the boom. And yet, they are more worried than anyone else on earth.

A Region Racing Ahead of Its Own Readiness

The WEF acknowledged that while the AI boom in Southeast Asia has brought about myriad opportunities, it has also caused fault lines to widen. This is not an abstract concern. The fault lines run along the most familiar fractures in the region: inequality, informality, and institutional fragility.

Consider the employment picture. While just under half of firms in the region are beginning to scale AI, this is not the case for small and medium-sized enterprises, where most workers are employed. Even in Singapore, the most digitally advanced economy in the bloc, AI adoption sits at just 15%. 

The technology is advancing at one speed; the institutions and businesses expected to absorb it are moving at another. That gap is where inequality is manufactured.

The WEF report frames the stakes with unusual directness: if large companies capture most of the productivity gains while workers across the labour market face job losses, AI could increase inequality, especially when unemployment already ranks as the second greatest perceived risk in the survey. The respondents are not describing a distant dystopia. They are describing a trajectory already in motion.

Women and Youth Will Bear the Brunt

Perhaps the most sobering finding in the data concerns who stands to lose the most. AI could affect as many as 164 million employees across the region, with women and younger workers expected to be the most impacted.

This is not a coincidence of demographics. It reflects the concentration of women and young people in service, administrative, and entry-level roles, precisely the categories most susceptible to automation. 

In a region where youth unemployment is already a political flashpoint and gender economic participation remains uneven, AI risks amplifying existing disadvantages rather than dissolving them.

The Carbon Cost No One Wants to Acknowledge

The productivity debate dominates headlines, but there is a second, quieter crisis embedded in the region’s AI expansion. 

The WEF warned of the high power demand of data centres in a region where electrical grids are still largely dependent on fossil fuels, a trajectory likely to produce exponentially greater emissions, particularly in Malaysia, the Philippines, and Indonesia.

Southeast Asia has committed, at least rhetorically, to the climate transition. Turbocharging a data centre build-out powered by coal and gas is not a footnote to that commitment. It is a contradiction at its heart. Governments cannot credibly pursue green pledges while subsidizing the infrastructure of an AI economy that runs on fossil fuels.

Governance cannot Keep Waiting

The Brookings Institution has previously noted that Southeast Asia faces significant disparities in AI readiness, governance capacity, and technical expertise, and that uneven institutional capacity and fragmented governance frameworks increase exposure to AI-related risks.

That assessment is not a critique of any single government. It is a structural observation about a region of extraordinary diversity, in language, legal tradition, development level, and institutional strength. ASEAN’s consensus-based architecture, valuable in so many diplomatic contexts, is poorly suited to the pace of technological change. By the time ten nations agree on an AI governance framework, the technology will have moved on twice.

The Region Cannot Afford Complacency

The WEF survey data does not suggest Southeast Asia should slow its AI ambitions. The opportunity cost of falling behind is real, and the region’s young, digitally engaged population is genuinely one of its greatest assets in this transition.

But opportunity and risk are not opposites. They are companions. The business leaders surveyed understand this, which is why their concern levels outpace the rest of the world by such a significant margin. They are watching an enormously powerful technology land in a landscape that is, by any honest measure, not yet ready to manage its consequences.

The question for governments, regulators, and civil society is not whether AI will reshape Southeast Asia. It will. The question is whether the region will shape that transformation deliberately, or simply absorb it.

The survey suggests the people closest to these decisions are already nervous. Policymakers would do well to listen.

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