Seoul tops global AI implementation as Singapore enters top tier

The global race to lead artificial intelligence is usually framed as a contest between countries: the US versus China, with Europe, India and a handful of others trying to carve out space. A new ranking argues that this view misses where much of the action is actually happening.

The Observer’s inaugural AI Cities Index, released today, maps AI capacity at the metropolitan level, scoring 57 cities across 36 countries. The report looks at three broad areas: investment, innovation and implementation. Put simply, it asks which cities are attracting money, producing breakthroughs, and building the institutions and infrastructure needed to use AI in the real world.

Also Read: Why Singapore, Indonesia, and Vietnam are losing the AI race they think they are winning

The answer still begins in the US. San Francisco and New York take the top two positions overall, underlining America’s continued strength in frontier AI research, venture capital and commercialisation. But the more striking finding is how quickly East and Southeast Asian cities are closing the gap.

Six of the world’s top 10 AI cities are in East and Southeast Asia: Seoul, Tokyo, Singapore, Shanghai, Shenzhen and Beijing. Together, they point to a shift in AI power away from a few US technology clusters and towards a more distributed network of Asian hubs, many of which lean on state coordination, industrial depth and public-sector adoption rather than venture funding alone.

The city as the new AI battleground

The Observer says the index builds on the Global AI Index, which has benchmarked national AI performance for seven years. Its city-level approach matters because AI ecosystems are rarely spread evenly across a country.

The US may be the world’s most influential AI market, but much of its cutting-edge activity is concentrated in and around San Francisco. China, by contrast, has three cities in the global top 10: Beijing, Shenzhen and Shanghai. South Korea’s AI strength is heavily concentrated in Seoul, while Singapore functions as both city and national AI platform.

This is particularly relevant for Southeast Asia, where AI adoption is unlikely to be driven by national scale alone. Singapore’s fifth-place ranking for implementation shows how a smaller market can punch above its weight when policy, talent, digital public infrastructure and enterprise adoption move in the same direction. For neighbouring markets such as Indonesia, Malaysia, Thailand, Vietnam and the Philippines, the question is not whether they can replicate Silicon Valley. It is whether they can build city-level clusters with enough talent, cloud capacity, industry demand and policy support to make AI useful beyond pilot projects.

Also Read: Korea’s startup ecosystem is training founders, not just funding them

The index defines implementation as the presence of institutions, systems and practitioners needed to operationalise AI across business, government, education and communities. That distinction is important. Building a powerful model is one thing. Putting AI into factories, hospitals, classrooms, banks and public services is another.

Seoul’s implementation edge

Seoul emerges as the most prominent non-US city in the ranking. While San Francisco tops the overall index, the South Korean capital ranks first globally for AI implementation.

That result reflects South Korea’s long-running investment in digital infrastructure, advanced manufacturing and semiconductors. Seoul is home to a dense cluster of semiconductor headquarters and related technology firms, including Samsung Electronics and SK Hynix, two of the world’s most important memory chipmakers. Both sit at the centre of the AI hardware boom, as demand for high-bandwidth memory and advanced chips rises with the growth of generative AI.

The city has also created the Seoul AI Innovation Committee to support small and medium-sized enterprises that cannot easily fund in-house AI talent or infrastructure. This is the kind of policy plumbing that rarely attracts the same attention as a new chatbot or chip launch, but it may prove more important in determining which economies actually benefit from AI.

For founders and operators in Southeast Asia, Seoul’s example is instructive. Many businesses in the region are not trying to train frontier models. They are trying to automate customer service, improve logistics, detect fraud, optimise energy use or equip workers with better tools. The winners may be cities that help ordinary companies adopt AI safely and affordably, not just those that host the biggest research labs.

Tokyo ranks third and Singapore fifth in the implementation table, while Shanghai, Shenzhen and Beijing also appear in the top 10. The report contrasts these cities with San Francisco and New York, where adoption is described as more fragmented and often still at pilot scale, despite deep private-sector innovation.

US still leads in capital and breakthroughs

None of this means the US is losing its AI lead. San Francisco remains the world’s strongest AI city overall, ranking highly across innovation, investment and implementation. New York also scores well across the board, helped by its deep capital markets, enterprise customer base, universities and growing AI startup scene.

On innovation, the report describes a more direct contest between Chinese cities and US technology hubs. San Francisco ranks first, followed by Beijing, New York and Shenzhen. This mirrors broader industry trends: the US continues to produce more frontier AI models, but Chinese labs and companies have narrowed the performance gap.

The Observer cites wider research showing that the performance gap between Chinese and American AI models has fallen to 2.7 per cent, down from as much as 31.6 per cent in 2023. The US still produced more frontier models in 2025, with 50 compared with China’s 30, but China’s count doubled year on year.

That narrowing gap matters for Asia’s startup ecosystem. If high-performing AI models become cheaper, more open and more widely available, the advantage may shift from those who own the models to those who know how to apply them in specific markets. Southeast Asian startups, often built around fragmented languages, regulations and customer behaviours, could benefit from this shift if they can localise AI effectively.

Europe struggles for space

Europe’s showing is comparatively modest. Only London and Paris make the global top 10. That reflects a familiar challenge: Europe has strong universities, research talent and regulatory influence, but has struggled to match the US in venture-backed scaling or East Asia in coordinated industrial deployment.

The ranking also suggests that state support alone does not guarantee implementation strength. Cities with prominent technology ambitions, including Tel Aviv and Dubai, do not make the top 10 for AI implementation.

Patricia Clarke, The Observer’s technology editor, said the index shows that AI power is being redrawn around cities rather than countries. “Some of tomorrow’s most important AI decisions may not be made in Washington or Beijing, but in Seoul, Shenzhen and a handful of other emerging hubs,” she said.

Also Read: A Southeast Asia AI adoption outlook vs alternative global hubs

For Southeast Asia, that is both a challenge and an opening. Singapore is already in the top tier for implementation, but the region’s larger markets still need deeper AI talent pools, stronger cloud and data infrastructure, clearer rules and more patient capital for applied AI. The cities that get those basics right may not dominate headlines like San Francisco, but they could determine how AI changes everyday business across the region.

The AI race is still led by the US. But if The Observer’s index is any guide, the next phase will be fought less by countries in the abstract and more by cities that can turn AI from promise into infrastructure.

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