Budget 2026 positions AI as a strategic advantage for Singapore

Budget 2026 is the first fiscal statement since Singapore’s General Election last year and the first budget of the current government term. It sets out how artificial intelligence is expected to play a central role in strengthening Singapore’s long-term economic position, provided the technology is applied carefully and with clear intent.

In his Budget speech on 12 February, PM Lawrence Wong said Singapore’s advantage in artificial intelligence does not come from building the world’s largest frontier models. Instead, it lies in how effectively the technology is deployed, how quickly it can be scaled, and how responsibly it is governed across sectors.

“Singapore can be a trusted hub where companies and researchers come together to develop, test, and deploy impactful AI solutions – and do so faster and more coherently than many larger countries,” PM Lawrence Wong said. He noted that Singapore’s size allows it to move in a more coordinated manner, aligning policy, industry, and research more tightly than larger economies.

This approach reflects a practical strategy for a small, open economy. Rather than competing on scale or raw computing power, Singapore is positioning itself as a place where AI can be translated into real-world outcomes efficiently and safely, with trust as a key differentiator.

AI investments translating into jobs and capabilities

PM Lawrence Wong said this strategy is already taking shape on the ground. More than 60 companies have established AI Centres of Excellence in Singapore, including major technology firms such as Google and Microsoft. These centres focus on activities ranging from applied research to engineering and deployment in commercial and public-sector settings.

According to the Prime Minister, these investments have resulted in a “growing number of good jobs for Singaporeans” in areas such as AI research, engineering, and deployment. These roles span model development, systems integration, and the adaptation of AI tools to meet industry-specific needs.

AI is also seen as a way to address Singapore’s structural constraints. With limited natural resources, a rapidly ageing population, and a tight labour market, productivity growth is becoming increasingly important. PM Lawrence Wong said that if AI is harnessed effectively, it can help businesses and workers achieve more without relying solely on manpower growth.

“If harnessed well,” he said, AI will be a “strategic advantage for Singapore”. The technology is expected to support growth across sectors including manufacturing, logistics, healthcare, finance, and public services, while helping companies remain competitive in a fast-changing global environment.

Governance and shared benefits as adoption accelerates

Alongside investment and deployment, PM Lawrence Wong stressed the importance of clear governance as AI continues to advance rapidly. He said that while AI holds strong potential to raise productivity and unlock new discoveries, it also brings serious concerns that must be addressed.

“We must act with clarity and resolve,” he said. “AI is a powerful tool – but it is still a tool. It must serve our national interests and our people.”

This requires clear rules to ensure AI is applied responsibly and safely, and that its benefits are “shared widely across society”. PM Lawrence Wong highlighted public concerns about job displacement, misinformation, bias, and the ethical use of increasingly powerful technologies.

“These anxieties are real – and we must confront them squarely,” he said, pointing to worries among workers and broader society about how AI could affect livelihoods and trust in information systems.

At the same time, PM Lawrence Wong cautioned against allowing fear or uncertainty to slow Singapore’s response. He warned that hesitation could leave the country behind as other economies push ahead with AI adoption.

“But fear cannot be Singapore’s response,” he said. “If we allow uncertainty to paralyse us, we will fall behind in a world that is moving rapidly ahead.”

Budget 2026 signals that Singapore intends to pursue AI with both ambition and discipline, aiming to turn the technology into a long-term strategic asset while managing its risks carefully.