Amazon Web Services (AWS) has released research revealing that artificial intelligence (AI) adoption continues to accelerate in Singapore. Today, nearly 170,000 (48%) of businesses in Singapore have adopted AI, up from approximately 143,000 (40%) a year ago. This represents a 20% year-over-year growth rate.
AI drives revenue and productivity across key sectors
AI adoption is the strongest in the financial services industry (71%), followed by technology at 70%, and healthcare at 63%. Among Singapore’s businesses that have adopted AI,82% reported an increase in revenue, at an average increase of 19%, while 90% report significant productivity improvements.
Additionally, 89% of businesses also expect an average of 17% in cost savings.
To better understand the scope of AI and where companies of different scales might be headed, AWS collaborated with Strand Partners to conduct the AI adoption survey in Singapore. The “Unlocking Singapore’s AI Potential” study surveyed 1,000 business leaders and 1,000 nationally representative members of the public in Singapore.
Widespread but basic adoption of AI across Singapore’s businesses
While AI adoption is increasingly widespread in Singapore, most businesses are not yet harnessing its most advanced uses, underscoring the need to deepen AI adoption to unlock Singapore’s full AI potential.
Almost two thirds (65%) of Singapore’s businesses that have adopted AI remain focused primarily on basic use cases3 rather than developing new products. Among industries, retail shows the highest concentration at this basic stage, with 71% of AI-adopting retail businesses still at this elementary level.
Only 17% of Singaporean businesses have reached the most transformative stage of AI integration, where AI is no longer just a tool but a core part of product development, decision-making, and business models. The technology industry is leading the way in terms of the most sophisticated AI uses, followed by financial services, and healthcare.
Startup-enterprise adoption gap is creating a two-tier economy
Startups4 are particularly enthusiastic and innovative in their use of AI in Singapore. The research shows that 82% of startups in Singapore are using AI, of which 42% are building entirely new AI-driven products with AI.
In contrast, while 62% of large enterprises5 are using AI, only 16% of these are delivering a new AI-driven product or service, and only 30% have an AI roadmap that outlines how their organization will leverage AI. This gap in AI innovation uncovers a deeper finding that could shape Singapore’s economic future.
Skills remain a barrier to more effective AI adoption
A lack of skilled personnel is the leading reason that 43% of businesses in Singapore say is preventing them from adopting or expanding their use of AI. Businesses reported having the technology and the vision but are unable to find the people to bring it to life.
As a result, companies are seeking to upskill their workforce – 30% have already implemented AI-specific training programs and, on average, 40% of employees have undergone digital training in the past year.
The path forward for AI innovation
The report identified three priority actions to unlock Singapore’s AI potential and prevent a ‘two-tier’ economy: First, develop industry-specific digital skills programs to address the preparedness gap, as AI literacy will be crucial for 48% of future jobs but only 32% of businesses feel ready.
Second, maintain Singapore’s pro-growth regulatory environment with innovation test-beds and cross-border AI projects. Third, accelerate public sector AI transformation in healthcare and education, as 71% of businesses are more likely to adopt AI when government leads and 75% of startups cite public sector adoption as crucial to scaling their solutions.
“Singapore stands at a critical inflection point where early AI adoption success must now translate into deeper integration—moving from experimentation to being AI-powered,'” said Priscilla Chong, Country Manager, Singapore, AWS.
“Getting past the proof-of-concept stage for promising AI projects requires more than just good technology – it also requires capital investment, dedicated skills development and organizational commitment in fostering a culture that prioritizes innovation, embraces continuous learning, and adapts readily to change.
“We see tremendous potential in public-private funding partnerships that could jumpstart the AI journeys of businesses, particularly in helping them bridge the gap between basic and transformative implementation.
“By bringing together government initiatives with private sector expertise and resources, Singapore can accelerate its transition to an AI-powered economy.”
