Singaporean CEOs Double Down on AI Investment but Struggle to See Returns

Singaporean CEOs Investing in AI Face Challenges in Realising Returns

Singaporean companies are increasing their investments in artificial intelligence (AI), yet many struggle to scale these initiatives effectively across their organisations. New research from the IBM Institute for Business Value, involving 2,000 CEOs globally—including 210 from Singapore and ASEAN—reveals a growing gap between AI ambitions and actual enterprise-wide impact.

While most CEOs in Singapore focus on return on investment (ROI) in their AI strategies, issues related to data infrastructure and talent shortages are holding back tangible results.

Investment and Return

According to the study, 80% of Singaporean CEOs prioritize AI use cases based on expected ROI, which is significantly higher than the global average of 65%. Despite this, only 23% have achieved the returns they anticipated from their AI programs.

Moreover, just 14% of businesses have successfully scaled AI initiatives throughout their entire organisation in the past three years. Over half (52%) of Singaporean CEOs are actively expanding AI investments, with plans to implement AI agents at scale.

However, rapid investment has led to challenges in technology integration. More than half (52%) of respondents reported that fast-paced tech investments have resulted in fragmented and piecemeal technology environments.

Data Environment and Technical Challenges

Integrated, enterprise-wide data architecture is critical. Over 58% of Singapore CEOs see it as essential for collaboration across business functions, and 68% consider proprietary data a key asset for unlocking generative AI's potential.

Yet, difficulties with data integration are limiting AI’s effectiveness. To gain efficiency and productivity from AI, leaders must focus on what they can control amid uncertainty. Those not leveraging AI and enterprise data risk falling behind competitors.

Workforce Transformation and Skills Demand

Digital transformation remains a priority, but it demands skilled talent and adaptable workforce strategies. Nearly half (48%) of Singaporean CEOs are hiring for AI roles that did not exist a year ago. Additionally, around 32% of the workforce will require retraining or reskilling within the next three years.

Automation is expected to fill some talent gaps, with 67% of organisations planning to use it to address shortages.

CEOs in ASEAN face pressure to deliver ROI from AI while investing in long-term capabilities. The region’s fragmented digital landscape, with diverse regulations and inconsistent cross-border data standards, complicates this balance.

Singapore distinguishes itself with a national AI strategy. Businesses must follow by building adaptable data foundations and investing in talent capable of turning AI ambition into results.

Balancing Innovation and ROI

Singaporean CEOs face tension between achieving short-term ROI and funding long-term innovation. Only 23% report expected ROI from AI efforts in recent years.

While 52% see value from generative AI investments beyond cost reduction, 77% admit to investing in technologies without fully understanding their value—driven by fear of falling behind.

Notably, only 40% favour a “fast and wrong” approach over a “right and slow” method when adopting new technology, highlighting cautiousness despite competitive pressures.

Call for Agility and Strategic Leadership

Many CEOs recognise the need for greater agility in budgeting. About 58% find it challenging to balance funding between current operations and innovation amid unexpected changes. Meanwhile, 62% want more budget flexibility to pursue growth opportunities through digital initiatives.

Strategic leadership and specialised expertise stand out as key enablers of AI success. Three-quarters (75%) believe organisational success depends on leaders with deep strategic understanding and decision-making authority. Additionally, 72% say differentiation hinges on having the right talent, skills, and incentives aligned in appropriate roles.

This research offers a clear message: Singaporean executives must align data, technology, and human capital strategically to realise AI’s potential and convert investment into measurable business value.

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