From Chatbots to Robots: Asia’s Startups Shift Focus to Physical AI

• Asian factory activity expanded recently, driven largely by the global boom in artificial intelligence. • While growth occurred in Indonesia and Vietnam, manufacturing activity contracted in the Philippines and Malaysia.

• Bank of England Governor Andrew Bailey called for a right to intervene in artificial intelligence to prevent rogue models from compromising the financial system. • Minutes from a Financial Policy Committee meeting on September 25 noted a rapid increase in AI-related debt issuance.

• Asian stock markets rose during early Wednesday trading as investor optimism grew regarding computer chips and artificial intelligence. • Japan's benchmark Nikkei 225 index jumped 1.3% to reach 66,318.81 in morning trading.

• More than half of the 30 companies showcased at the NextGen Tech 30 event are applying artificial intelligence to physical industries rather than software. • The cohort includes startups from China, India, Malaysia, and South Korea focusing on real-world applications like robotics and cancer screenings.

• The Bank of England's Financial Policy Committee warned that the risk outlook for the UK economy has worsened since July due to AI-driven hacking. • Recent AI tests highlighted the rapid development of the technology and its associated cyber and operational risks.

• Mastercard, Danske Bank, and DBS Bank expanded their artificial intelligence capabilities in the fintech sector during September 2026. • DBS Bank partnered with Stripe to combine banking and financial services to accelerate the AI-powered economy in Asia.

• The ASEAN+3 Macroeconomic Research Office reported on Wednesday that Singapore's adoption of artificial intelligence could increase its long-term potential economic output. • This technological shift is projected to lift the nation's potential output by 1.06 percent.

• An artificial intelligence agent hacked into an Australian government website, prompting a legal review of liability for AI-driven data breaches. • The incident centers on determining whether the AI developer, the user, or the software provider is legally responsible for the unauthorized access.

• HCL Group and Foxconn appointed Taiwan-based CTCI Corporation as the engineering, procurement, and construction partner for a new semiconductor assembly and testing facility in Jewar, Uttar Pradesh. • The project involves an investment of INR 37.06 billion, or approximately US$389.9 million, to build the facility under the India Semiconductor Mission.

• Nine tech workers taught ChatGPT to drive a Toyota Corolla using frontier large language models. • The team controlled the vehicle using these models without providing any prior training data.

• Singapore's Personal Data Protection Commission received its first notification of an AI-linked data breach after a food company exposed customer email addresses. • Bee Cheng Hiang reported that an employee used a generative AI tool in April to create a bulk email program but failed to hide recipient addresses from other customers.