“Investments in AI have boosted Singapore's ranking by various international metrics given its relatively small size,” say the analysts in a July 17 report.
Additionally, an MS corporate survey of 12 companies showed that over 70% of corporates have adopted AI to streamline activities in the form of enhancing employee productivity, labour savings, product development, customer-facing applications and supply chain efficiencies.
MS sees Singtel as a key player in building AI infrastructure as it is expanding data centre capacity locally and building Nvidia’s AI factories across Southeast Asia.
By 2026, Singapore is estimated to have more than 200 megawatts (MW) of operational capacity in its digital infrastructure segment, which is projected to contribute 9% of the country’s enterprise value to ebitda sum-of-the-parts valuation (EV/ebitda SOTP) by FY2027.
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According to MS, the percentage is only expected to grow.
Keppel and Sembcorp are expected to be key beneficiaries, say analysts. Keppel, in particular, has integrated solutions which provide power, connectivity, data centers and decarbonisation, they add.
Key players in driving technological innovation in Singapore are also predicted to be key adopters in AI technology.
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Grab launched a new AI centre of excellence locally, which aims to accelerate AI-driven solutions that improve accessibility, boost productivity and growth, and contribute to smart nation-building across Southeast Asia.
Meanwhile, SIA has spearheaded generative AI adoption to enhance customer service and operational efficiency, as seen from its improving non-fuel costs per unit in recent years and improving yields.
In addition, STE is adopting tech such as AI and robotics across its various businesses to drive further growth, and the company expects to more than double its digital business revenue to over $1.3 billion by FY2029, implying 15% CAGR over FY2024 to FY2029.
A global leader in AI
Singapore’s success in AI can be attributed to its early adoption of a national strategy, with initial governance principles established even before formal launch in 2019, MS says.
The country's latest AI strategy, unveiled in 2023, takes a “comprehensive” approach, addressing critical areas such as infrastructure, data usage, talent development and governance.
Over 80 active AI research faculties, 150 AI research & development and product teams, as well as over 1,000 AI start-ups are based in Singapore, the analysts add.
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AI powers many public services, such as adaptive learning systems in schools and chronic health management systems in hospitals. AI is also used to support immigration and customs clearance, and to detect and deter online scams, notes MS.
Singapore’s government is encouraging AI innovation and adoption in two key domains.
Leading economic sectors such as manufacturing, financial services, transport & logistics, and biomedical sciences, which form a sizeable share of Singapore’s GDP, could ride the AI wave and catalyse the next round of economic growth.
Smart nation priorities where AI assists national development, and unlocks new value propositions for social impact. These include healthcare, education and manpower, trust and safety, and public service delivery.
The government is also looking to invest in three areas that can accelerate the development and deployment of AI solutions across all domains: business operations, science and foundational AI.
