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Singapore ramps up AI investments but faces hurdles in scaling enterprise adoption

A new IBM study finds that while AI investment is growing in Singapore, few businesses have succeeded in scaling it across the organisation.

A new global study from the IBM Institute for Business Value has found that while business leaders in Singapore are accelerating their investment in artificial intelligence, only a small portion have succeeded in expanding AI across their entire organisations.

The annual IBM CEO study surveyed 2,000 CEOs worldwide, including 210 from ASEAN and Singapore. It revealed that business leaders expect the growth rate of AI investments to more than double over the next two years. In Singapore, 52% of CEOs say they are actively adopting AI agents and preparing to scale their implementation.

Despite this, just 14% of Singapore businesses have successfully scaled their AI efforts organisation-wide in the past three years, indicating a significant gap between intent and execution.

Data challenges and mismatched returns slow progress

Singapore CEOs appear more ROI-driven than their global peers, with 80% prioritising AI initiatives based on return on investment—compared to 65% globally. However, only 23% of these leaders report that their AI programmes have met expected returns. This suggests that while Singapore businesses are investing with clear outcomes in mind, the results have not matched expectations.

Data infrastructure remains a critical issue. While 58% of CEOs identify enterprise-wide data architecture as vital for collaboration across departments, and 68% consider proprietary data key to unlocking the potential of generative AI, half admit their current technology landscape is fragmented. Many attribute this to the pace of recent investments, which have resulted in isolated and disjointed systems.

Gary Cohn, Vice Chairman at IBM, wrote in the study’s foreword, “As AI adoption accelerates creating greater efficiency, and productivity gains, the ultimate pay-off will only come to CEOs with the courage to embrace risk as opportunity. Meaning, focusing on what you can control, especially when there is so much you can’t. When the business environment is uncertain, using AI and your enterprise data to identify where you have leverage is a competitive advantage. At this point, leaders who aren’t leveraging AI and their own data to move forward are making a conscious business decision not to compete.”

Abraham Thomas, Managing Partner at IBM Consulting, ASEAN, added, “Business leaders in ASEAN are under pressure to demonstrate ROI from AI while needing to invest in long-term capabilities to stay competitive. This balancing act is made even more complex by the region’s fragmented digital landscape, with varying national regulations and inconsistent standards for cross-border data flow. Singapore stands out with its national AI strategy, and businesses must follow suit by building adaptable data foundations and investing in talent that can turn AI ambition into real results.”

CEOs seek balance between innovation and execution

The study also reveals that Singapore CEOs face ongoing tension between short-term demands and long-term innovation. Only 23% report that AI projects have delivered the returns they hoped for, while just over half (52%) say their organisations are beginning to see value from generative AI beyond just cost savings.

When it comes to technology adoption, 77% of leaders admit they are sometimes driven by fear of falling behind, even if they do not fully understand the value of new technologies. However, only 40% believe it is better to act quickly and risk mistakes than to wait for certainty.

Funding innovation is another challenge. About 58% say their organisations struggle to balance budgets between existing operations and new digital initiatives when unexpected changes occur. Meanwhile, 62% believe greater budget flexibility is necessary to seize digital opportunities that support long-term growth.

Strategic leadership and talent development are also viewed as key. Around 75% of Singapore CEOs say business success depends on having leaders who understand strategy and can make critical decisions. Another 72% believe having the right experts in place, with proper incentives, is central to their competitive edge.

Workforce development remains a priority, with 32% of employees expected to need retraining or reskilling over the next three years. At the same time, 67% of CEOs plan to use automation to address talent shortages, while nearly half (48%) report hiring for AI-related roles that did not exist a year ago.

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