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Firms are encouraged to adopt AI to improve productivity and redesign jobs, while tapping on national support will help build local AI capabilities and monitor gains, Minister Tan See Leng said.
Singapore is expected to benefit significantly from AI-related activity in both the near and longer term, although a material slowdown in global AI capital expenditure could weigh on sectors linked to AI supply chains.
Responding to parliamentary questions on 9 September 2026, Minister for Trade and Industry (Energy and Industry) Dr Tan See Leng said strong global investment in AI infrastructure has supported Singapore’s outward-oriented sectors, including electronics and precision engineering in manufacturing, as well as the machinery, equipment and supplies segment of wholesale trade.
However, he noted that global AI investment remains exposed to downside risks. Tighter financial conditions could raise financing costs for AI infrastructure projects, while a sudden decline in AI-related capital spending could weaken investor confidence and trigger sharp corrections in global financial markets.
Such developments could have negative spillovers on global economic activity and affect growth in Singapore’s AI-linked sectors.
Minister Tan said Singapore’s economic diversification provides some resilience against these risks. Other sectors, including information and communications, professional services, real estate and construction, are also expected to support GDP growth for the remainder of 2026.
Beyond the immediate boost from global AI infrastructure investment, the Government is focused on helping local businesses and workers capture longer-term value from AI.
Enterprises at different stages of readiness are being supported to adopt AI and undertake AI-driven transformation, with the aim of raising productivity and innovation. Workers are also being equipped with the skills and confidence to work alongside AI, take on redesigned roles and move into higher-value opportunities.
Early signs suggest that AI adoption is generating benefits for firms and employees. A recent Ministry of Manpower survey found that around three in 10 firms had adopted AI. Among these firms, about seven in 10 reported improvements in worker productivity.
Minister Tan also shared that AI is also complementing rather than replacing workers. More firms are redesigning existing roles and creating AI-related jobs instead of reducing headcount. This is consistent with a recent Ministry of Trade and Industry study, which found that firms using AI recorded higher revenue and total employment, with stronger gains among those that had deepened their AI capabilities.
The Government is also strengthening Singapore’s research, engineering and commercialisation capabilities. Under the National AI Missions announced at Budget 2026, the Government will work with industry and research partners to develop and deploy AI applications in advanced manufacturing, financial services, connectivity and healthcare.
These efforts are intended to drive AI-enabled transformation at scale and support the creation of new businesses. Minister Tan also noted that leading AI companies, including Google DeepMind and OpenAI, have established research labs in Singapore, contributing to local research and engineering capabilities and creating high-quality jobs.
"The Government will continue to monitor the impact of AI on our economy, including enterprise-level AI adoption and its effects on firm performance. Through the National AI Council, we will coordinate our national AI efforts and ensure that AI-driven growth benefits the wider economy," Minister Tan said.
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