Singapore's AI push may spawn more automation tools

It could also spur the development of more advanced AI chips.

A $150m state fund that seeks to quicken artificial intelligence (AI) adoption among Singapore businesses is expected to bring about more automation tools for finance, healthcare, supply chains, and energy management, analysts said.

The so-called enterprise compute initiative announced in the 2025 budget could also spur AI tools for customer experience and environmental, social, and governance (ESG) initiatives, Lyon Poh, a partner and head of corporate transformation at KPMG International Ltd. in Singapore, told Singapore Business Review.

“We could see AI-driven micro-personalisation for customer engagement in retail, hyperlocal demand forecasting for food businesses and AI-optimised energy management for small businesses,” he said in an emailed reply to questions.

Gerard Seng, executive director for digital advisory at  BDO Singapore, expects the state AI push to have a spillover effect on hardware development needed for running AI solutions, particularly AI chips. “Hyperscale infrastructure providers are already anticipating increased demand and preparing to meet it,” he added.

Poh said the fund could stimulate demand for AI-enabling hardware across various scales.

“As small and medium enterprises gain experience with AI through the initiative, they may pivot to cost-effective on-premise small language models (SLMs) suited for their specific use cases, driving demand for lower-powered enterprise-grade GPUs (graphics processing units) or even commercial GPUs,” he said.

“We also expect an uptick in demand for lower-powered AI processing units for Internet-of-Things (IoT) and real-time applications, such as shelf and inventory monitoring, predictive maintenance, and climate control,” he added.

Manik Bhandari, EY Asean Data and Artificial Intelligence Leader, offered a different perspective, saying that while the initiative may boost demand for AI chips, the overall impact will not be significant.

Meanwhile, Poh expects increased demand for certain AI tools from specific industries. For example, healthcare, logistics, and manufacturing might adopt computer vision and image recognition tools.

In financial services, Poh said predictive analytics and anomaly detection tools would be the most widely adopted given banks’ focus on fraud detection and financial forecasting, he added.

Seng sees higher demand for content creation tools because of the $150m fund, whilst finance, legal services and tax advisory are also expected to benefit.

“AI can enhance fraud detection, risk management, and personalised finance; improve diagnostics, treatment, and automation in healthcare; and optimize supply chains, route planning, and inventory in logistics,” Poh said.