Singapore businesses are ramping up their AI investments and are already seeing encouraging results, according to new research from SAP.
Organisations here say they are spending an average of S$18.9 million (US$14.5 million) this year on AI and report an average return on AI investment of 16% — a figure expected to rise to 29% within two years.
While this outlook is promising, the findings suggest that as AI continues to evolve, future gains will depend on strengthening workforce skills and improving access to quality data, which remain key barriers to scaling AI impact across the enterprise.
These are from a study commissioned by SAP and conducted by Oxford Economics, involving a survey of 1,600 business leaders of various sizes, including 200 in Singapore. The study also covered respondents based in Australia, Brazil, China, Germany, India, the United Kingdom and the United States.
Respondents are from organisations with 200 or more employees. They were evenly distributed between midmarket organizations (500 – 1500 employees) and enterprises (1,500 or more).
“Spurred by strong policy direction, high digital maturity and a globally connected economy, Singapore has moved decisively on AI ambition and investment,” said Eileen Chua, managing director of SAP Singapore.
“Our research suggests that to sustain this momentum and seize the next wave of AI innovation, Singapore organisations will have to bridge their reported gaps in data readiness and workforce capability,” said Chua.
According to the report, Singapore firms are expected to increase their AI investments by an average of 38% over the next two years.
Two-thirds (67%) of respondents say they are satisfied with their current ROI on AI, and 63% businesses say AI has already helped them address key challenges — such as improving decision-making and customer engagement.
Despite these measurable gains demonstrated by many companies, 70% of Singapore business leaders remain uncertain whether AI is delivering its full potential.
This reflects growing awareness that current success does not automatically translate into long-term advantage and highlighting significant opportunities for further growth and value creation.
Organisational readiness appears to be the main constraint. The study found that 76% of Singapore organisations have not yet provided comprehensive AI training for employees, even as 68% acknowledge that shadow AI — the use of unapproved or unregulated AI tools — is already in use internally.
Moreover, 58% of respondents lack confidence in their ability to integrate and share data across business functions — a foundational requirement for enterprise-scale AI.
The challenge of data readiness for AI is particularly pronounced in legal (80%), finance (73%), human resources (66%), the CEO’s office (64%) and procurement (55%).
