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Southeast Asia’s venture investors are excited about AI—but less excited about the region

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Asia editor Nick Gordon here, filling in for Allie Garfinkle. The future of AI is in Asia. At least, that’s the message you’d have gotten at our Fortune Brainstorm AI Singapore conference, which wrapped up in the Southeast Asian city last week.

We covered AI’s impact on just about everything: health care, banking, agriculture, video gaming, and even K-pop. (As an aside, check out my debut as a Korean singer—thanks to some assistance from Korean AI developer Supertone).

DeepSeek’s efficient, powerful—and importantly, cheap—models have shaken up the Asian AI conversation, pushing investors to give the region’s AI developers a second look and encouraging firms to adopt the new technology for themselves. 

Granite Asia’s senior managing partner Jixun Foo, speaking on our stage last week, credited the “DeepSeek moment” for democratizing access to AI across the region. 

AI optimism has also lifted Hong Kong’s stock market, as investors rush to invest in mainland Chinese AI developers like Alibaba and Kuaishou. Shares in other Asian tech firms—like TSMC, Softbank, and Korea’s Naver and Kakao—have surged amid the AI boom as well. 

At first glance, Southeast Asia should be an attractive home for startups. The region’s population is young, still growing, and digitally savvy. But on our conference stage, those that actually have to fund these AI endeavors were more wary. 

Even amid a global slowdown, venture funding in Southeast Asia plummeted by almost 80% from 2022 highs, according to CNBC. “Funding dried up dramatically as people looked for more profitable companies and steady cash flow rather than cash-burning tech companies,” said AC Ventures managing partner Helen Wong at the conference. 

She urged investors to be cautious. “This is not a very mature ecosystem, unlike China, where you have entrepreneurs that have gone through intense competition…here is still a bit more raw,” she said.

“What’s the exit landscape here [in Southeast Asia]?” Phylicia Koh, a general partner at Play Ventures, asked during a separate panel on video gaming. “That has been a challenge, and one I don’t envy for Southeast Asia-focused VCs.”

Singapore, the region’s financial hub, has had just three IPOs this year as of mid-July. Its largest, NTT DC REIT (a real estate investment trust of data centers from Japan’s NTT) raised $773 million. Hong Kong’s largest IPO—the secondary listing of batterymaking giant CATL—raised at least $4 billion.

Public tech companies haven’t done too well either. In a recent issue of the magazine, my colleague Lionel Lim tells the story of one such startup, the Indonesian ride-hailing firm GoTo, whose shares have plunged by almost 85% since its 2022 IPO in Indonesia.

“[Are] the capital markets here mature enough to support an exit? It hasn’t probably performed as well as investors wanted it to,” Koh added. 

Another reason why Southeast Asia struggles? While it’s big, it’s not quite as big as markets like China, India, or the U.S. “Why is there not a RedNote in this part of the world?” Foo asked, using the global name for the wildly-successful Chinese social media platform Xiaohongshu. Southeast Asia, smaller than China (and split into different markets), lacks the network effects to supercharge a local content platform.

Still, speakers noted that there are plenty of opportunities in Southeast Asia for those willing to look for them. Wong noted that while fintech and e-commerce firms may have suffered, climate and sustainability startups are still raising funds. 

There’s “a tremendous opportunity for a lot of much more specific, highly differentiated visions that could potentially be billion-dollar companies,” said Matthew Graham of Ryze Labs. (He, however, wasn’t interested in a company “trying to be the 19th LLM.”)

And funders based in Southeast Asia are prepared to start investing again—even if not right now. “We want to be patient. We want to see the confluence of talent and market adoption, and then we’ll start investing,” Foo said.

Nicholas Gordon
X: @nickrigordon
Email: nicholas.gordon@fortune.com

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VENTURE DEALS

– Lumotive, a Redmond, Wash.-based programmable optics company, raised $59 million in Series B funding from Amazon’s Industrial Innovation Fund, Oman’s ITHCA, Gates Frontier, and MetaVC.

– Positron AI, a Reno, Nev.-based developer of hardware for multimodal AI, raised $51.6 million in Series A funding. Valor Equity Partners, Atreides Management, and DFJ Growth led the round and were joined by Flume Ventures and others.

– BlinkOps, an Austin, Texas-based developer of cybersecurity micro-agents, raised $50 million in Series B funding. O.G. Venture Partners led the round and was joined by Lightspeed Venture Partners and Vertex Growth.

– Fable Security, a San Francisco-based human risk management platform, raised $31 million in funding from Greylock Partners and Redpoint Ventures.

– E2B, a San Francisco-based provider of open-source cloud infrastructure designed for AI agents, raised $21 million in Series A funding. Insight Partners led the round and was joined by Decibel, Sunflower Capital, Kaya, and angel investors. 

– Julius AI, a San Francisco-based AI-powered data analyst for knowledge workers, raised $10 million in seed funding from Bessemer Venture Partners, Y Combinator, Horizon VC, AI Grant, 8VC, and angel investors.

– Reach Security, a San Francisco-based developer of AI-powered assistant technology designed to reduce exposure to security risks, raised $10 million in funding from M12 and existing investors including Artisanal Ventures.

– Journey, a New York City-based provider of mental health solutions for companies, raised $8 million in Series A funding. Cambrian Growth Partners led the round and was joined by Manchester Story, Canaan Partners, J-Ventures, J-Impact, Life Science Angels, HealthTech Capital, and others.

– Overwatch Imaging, a Hood River, Ore.-based developer of airborne imaging systems and AI-powered automation software for intelligence and surveillance, raised $6 million in funding. Squadra Ventures led the round and was joined by SEMCAP AI, the Elevate Oregon Venture Direct Fund, and Edo Capital.

– Keye, a New York City-based AI tool designed for private equity teams, raised $5 million in seed funding from Sorenson Capital, General Catalyst, Y Combinator, ERA, Tiferes Ventures, Dunamu Ventures, Palm Drive Capital, and angel investors.

PRIVATE EQUITY

– BVP Forge acquired a majority stake in BetterRx, a Salt Lake City-based hospice pharmacy platform. Financial terms were not disclosed.

EXITS

– EQT and CPP Investments agreed to acquire NEOGOV, an El Segundo, Calif.-based provider of HR and compliance software for U.S. public sector agencies, from Warburg Pincus and Carlyle. Financial terms were not disclosed.

– Gridiron Capital agreed to acquire Greenix Pest Control, an Orem, Utah-based pest control company, from Riata Capital Group. Financial terms were not disclosed.

– Warburg Pincus agreed to acquire FlavorSum, a Kalamazoo, Mich.-based provider of natural flavor solutions for food and beverage companies, from The Riverside Company. Financial terms were not disclosed.

OTHER

– NiCe agreed to acquire Cognigy, a Dallas-based developer of customer service AI agents, in a deal that values the company at approximately $955 million.

IPOS

– Figma, a San Francisco-based design software company, now plans to raise up to $1.15 billion in an offering of 36.9 million shares priced between $30 and $32. The company posted $821 million in sales for the year ending March 31, 2025. Index Ventures, Greylock Partners, KPCB Holdings, Sequoia Capital, and Wu-Wallace Family Trust back the company.

– Firefly Aerospace, a Cedar Park, Texas-based space and defense technology company, announced plans to raise $631.8 million in an offering of 16.2 million shares priced between $35 and $39 on the Nasdaq. The company posted $108 million in revenue for the year ending March 31, 2025. AE Industrial Partners, Astera Institute, and Thomas Markusic back the company.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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7 hours ago

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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