Offshore AI Solutions in Asia
A White Paper by OREL IT
Executive Summary
Artificial Intelligence (AI) is transforming business at a pace and scale that few enterprises anticipated. Companies are facing mounting pressure to integrate AI into operations, enhance decision-making, and generate new revenue streams. However, in traditional onshore markets such as North America and Western Europe, organisations encounter two persistent challenges: high labour costs and a shortage of specialised AI talent.
Offshore AI delivery in Asia has emerged as a compelling solution to these challenges. By leveraging Asia’s growing AI talent pool, robust cloud infrastructure, and supportive regulatory environment, enterprises can achieve cost savings of up to 60%, scale teams rapidly, and accelerate time-to-market — all without compromising on quality, security, or compliance.
At OREL IT, we combine deep regional expertise with best-in-class governance and delivery models to help enterprises turn offshore AI into a strategic advantage. This whitepaper explores the market, examines key Asian ecosystems, outlines critical operational and regulatory considerations, and explains how organisations can realise tangible value from offshore AI solutions.
Why Offshore AI Makes Strategic Sense
The rapid rise of AI has created unprecedented demand for skilled engineers, data scientists, and AI operations specialists. In many developed markets, salaries for these roles are skyrocketing, often exceeding USD 150,000 annually for experienced ML engineers. Talent shortages exacerbate the problem, slowing adoption and increasing risk.
Asia offers a compelling alternative. Countries such as India, the Philippines, and Vietnam combine deep pools of technical talent with significantly lower labour costs. For instance, a mid-level AI engineer in India or Vietnam may earn 40–60% less than their counterpart in Europe, while delivering comparable outcomes (McKinsey).
But cost savings are only part of the story. Asia also provides:
- Rapid scalability: Established IT hubs and global delivery centres allow organisations to ramp teams from a handful of engineers to hundreds within months.
- Advanced infrastructure: Investments from hyperscalers like AWS, Google Cloud, and Azure ensure reliable, high-performance AI compute close to data sources (Google Cloud locations, AWS Taiwan).
- Supportive policy environments: Governments actively promote digital skills, tax incentives, and export-oriented IT services (Reuters).
By offshore AI development to Asia, organisations not only save costs but also gain access to innovation ecosystems capable of supporting complex AI initiatives.
Understanding the Regional Ecosystem
While the benefits of offshoring are clear, the choice of country and ecosystem matters. Each Asian market offers distinct advantages and considerations:
India – Scale and Specialisation
India has become synonymous with technology outsourcing, but it has also developed a world-class AI talent ecosystem. With hundreds of thousands of AI-trained professionals and a rapidly expanding startup landscape, India offers both depth and flexibility.
- Capabilities: Full-stack AI development, model fine-tuning, MLOps pipelines, data engineering, and enterprise-grade AI solutions.
- Regulatory context: India’s DPDP Act 2023 introduces new requirements for personal data handling and cross-border transfer. Organisations must embed compliance at the design stage.
- Illustrative example: Several global financial services firms have established AI centres in Bengaluru to run large-scale credit risk modelling, leveraging India’s talent scale while controlling costs.
Philippines – Language and Customer-Centric AI
The Philippines has long been a hub for customer-service outsourcing. Its workforce is highly English-proficient and culturally aligned with Western markets, making it ideal for annotation, labelling, and conversational AI applications.
- Capabilities: AI-enhanced BPO services, supervised learning data pipelines, and voice/chat AI operations.
- Growth trajectory: The IT-BPM sector is projected to grow 8% per year (Reuters).
- Illustrative example: OREL IT has leveraged Philippine-based teams for large-scale data labelling projects supporting LLM training for European clients, achieving high accuracy at reduced costs.
Vietnam – Competitive Engineering Hub
Vietnam is emerging as a cost-effective alternative for mid- to senior-level software engineering.
- Capabilities: Backend AI services, automation of MLOps workflows, SaaS integrations, and custom AI applications.
- Illustrative example: A Southeast Asian fintech client scaled its AI infrastructure team in Ho Chi Minh City, doubling output while reducing development costs by nearly 50%.
Sri Lanka – Managed AI Services
Sri Lanka provides affordable, English-speaking teams specialising in annotation, data preparation, and managed AI services.
- Capabilities: Data QA, managed labelling, and support for AI training pipelines.
- Strategic advantage: Low cost combined with strong alignment to international quality standards (SLASSCOM).
Singapore – Governance and High-Value AI
Singapore is recognised globally for AI governance and regulatory sophistication. Its Model AI Governance Framework provides practical guidance for transparency, accountability, and explainability in AI deployments (PDPC).
- Capabilities: Secure AI deployment, compliance-heavy applications, regional HQ for multinationals, and R&D.
- Illustrative example: Multinational banks use Singaporean AI centres for model validation, bias monitoring, and compliance oversight before deploying systems region-wide.
Infrastructure, Cloud, and Operational Readiness
Access to hyperscaler infrastructure is critical for AI projects. Asia’s investment in cloud capacity has made it possible to:
- Deploy high-performance GPU clusters for model training close to data.
- Ensure low-latency inference for applications like recommendation engines and real-time analytics.
- Maintain resilience through multi-region redundancy and automated failover.
OREL IT integrates these capabilities into our delivery model, ensuring clients benefit from localised infrastructure while complying with data residency regulations.
Governance, Compliance, and Security
For enterprises, security and compliance are non-negotiable. Offshore AI projects require adherence to:
- International standards: ISO/IEC 27001, SOC 2 Type II, PCI DSS
- Local regulations: Singapore PDPA, India DPDP 2023, and evolving frameworks in other Asian markets.
- MLOps-specific practices: versioned datasets, model cards, drift detection, and audit trails.
OREL IT embeds security and compliance into every stage of delivery, from pilot projects to enterprise-scale deployments.
Engagement Models and Delivery Approach
OREL IT offers flexible models:
- Pilot projects — Short-term initiatives to test feasibility, train models, and validate results.
- Dedicated offshore teams — Scalable, long-term teams for continuous development.
- Managed AI services — Outcome-based delivery with agreed KPIs (accuracy, latency, model performance).
All engagements are supported by robust project governance, knowledge transfer, and exit planning to prevent vendor lock-in.
Risks and Mitigations
- Data quality → rigorous annotation QA, inter-annotator agreement monitoring.
- Intellectual property → explicit ownership clauses, technical separation of client assets.
- Regulatory compliance → PIAs, encryption, and contractual guarantees for cross-border transfers.
- Model bias & explainability → bias testing, model cards, human-in-the-loop validation.
The Future of Offshore AI in Asia
- Generative AI scaling: LLM fine-tuning and RAG architectures will increasingly move offshore for cost efficiency.
- Converging regulations: Expect stricter transparency and auditability requirements, aligned with global norms.
- Hybrid human-AI annotation: Automation will reduce annotation costs while increasing quality.
- Distributed AI infrastructure: Multi-region and hybrid cloud strategies will become standard to support resilience and compliance.
Conclusion
Offshore AI in Asia offers enterprises cost savings, talent access, and operational agility. By choosing the right partners and following robust governance, organisations can accelerate innovation while managing risk.
OREL IT leverages decades of offshore delivery expertise to provide secure, scalable, and compliant AI solutions — enabling clients to realise tangible business outcomes.
Explore our offshore AI capabilities at orelit.com.
References
- BCG – Asia is racing to adopt generative AI
https://www.bcg.com/publications/2023/asia-is-racing-to-adopt-generative-ai - Reuters – India’s AI market seen at $17bn by 2027
https://www.reuters.com/technology/indias-artificial-intelligence-market-seen-touching-17-bln-by-2027-2023-11-29/ - Google Cloud – Global Locations
https://cloud.google.com/about/locations - Reuters – AWS to launch Taiwan cloud region
https://www.reuters.com/technology/amazon-cloud-computing-arm-plans-taiwan-region-2023-10-03/ - Singapore Personal Data Protection Commission – Model AI Governance Framework
https://www.pdpc.gov.sg/help-and-resources/2020/01/model-ai-governance-framework - DLA Piper – India Digital Personal Data Protection Act 2023 summary
https://www.dlapiper.com/en/insights/publications/data-protection-india/ - McKinsey – Offshore rebalancing and rethinking
https://www.mckinsey.com/capabilities/operations/our-insights/offshore-rebalancing-and-rethinking - Reuters – Philippines IT-BPM sector targets 8% growth
https://www.reuters.com/world/asia-pacific/philippines-it-bpm-sector-targets-8-growth-2023-07-19/ - Levels.fyi – Salary benchmarks and compensation data
https://www.levels.fyi/ - SLASSCOM – Sri Lanka Association of Software and Services Companies
https://slasscom.lk/ - ISO – ISO/IEC 27001 Information Security Management
https://www.iso.org/standard/27001 - AICPA – SOC 2 overview
https://us.aicpa.org/interestareas/frc/assuranceadvisoryservices/soc2report - PCI Security Standards Council – PCI DSS Overview
https://www.pcisecuritystandards.org/
