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One of the few proven use cases for generative AI is automating customer service inquiries to reduce costs even further than it’s been possible to achieve by offshoring jobs to low-wage companies like the Philippines – which yesterday bet that its outsourcing industry will thrive even as it plans a massive investment in AI.
The nation’s government yesterday delivered the PAIIM – aka the Philippines AI+ Infrastructure Masterplan [PDF], a policy that calls for $34.4 billion of investment in infrastructure, connectivity, and datacenters. Current government programs and private investments dedicated to funding network and energy spending already cover $18.2 billion of the planned spend. The government hopes the remainder “will be mobilized through targeted public investment and private sector participation, particularly for hyperscale AI datacenter infrastructure.”
The plan assumes private enterprise will invest $21 billion of the total spend. The likes of Amazon, Google and Microsoft currently spend roughly $20 billion on AI infrastructure each quarter. Chinese clouds also expect to spend tens of billions each year. The Philippines is bidding for less than a month of their combined spending to fuel its national plan.
The Philippines’ government nonetheless thinks this plan will turn the nation into a regional AI hub and see the national datacenter fleet surge from today’s 50MW to 1.5 GW by 2033, and for the new bit barns to house around 152,000 GPUs.
Again, these are small numbers: American and Chinese AI players have committed to acquire and operate millions of GPUs that require multiple gigawatts of energy.
Government officials said the plan means the Philippines can compete with regional competitors Singapore and Thailand. They didn’t mention nearby Malaysia, where the Johor datacenter province already has almost 4GW of datacenter projects in place, with similar capacity in the planning and construction pipeline.
Citizens have been told that the plan will see over 1.3 million professionals receive training on how to use AI, and will generate half a million AI-related jobs – 175,000 of them working on AI infrastructure projects.
“These investments will further produce spillover benefits such as improved public service delivery, greater international connectivity for all businesses, and enhanced cybersecurity and data governance frameworks in line with global best practices,” the plan promises.
Those outcomes are made possible, the plan suggests, by the fact that the nation already has a million-strong tech workforce – including its outsourcing industry that will apparently both make the AI plan possible and benefit from it.
“PAIIM does not position AI as a replacement for the Philippine IT-BPM industry;” the policy document states. “Rather, it enables the sector to move up the value chain by using AI for first-level, repetitive, and data-intensive interactions while empowering Filipino workers to handle complex, empathy-driven, and higher-value customer experience functions.”
That’s a very old assumption about the impact of automation on customer service. Yet the Philippines owes the existence of its business process outsourcing industry to the fact that automation alone didn’t drive down the cost of customer service to levels that some businesses were willing to pay. And AI will likely enable even more automation at even lower costs. ®
