Singaporean CEOs invest in AI but struggle to realise returns

Singaporean businesses are increasing investment in artificial intelligence, but only a small proportion have successfully scaled AI initiatives throughout their organisations, according to new research from the IBM Institute for Business Value.

The study, which surveyed 2,000 CEOs globally including 210 across Singapore and ASEAN, highlights a widening gap between the ambition to adopt AI and the ability to achieve enterprise-wide impact in Singapore. Although most CEOs in the country prioritise return on investment (ROI) in their AI strategies, challenges around data infrastructure and talent acquisition are hindering actual returns.

Investment and return

According to the study, 80% of Singaporean CEOs report that they determine AI use cases primarily based on ROI, a figure notably higher than the global average of 65%. However, only 23% of those surveyed have realised the expected returns from their AI programmes. Furthermore, just 14% of Singapore businesses have succeeded in scaling AI initiatives across the entire enterprise in the past three years.

Singaporean CEOs are also more likely to be focusing on expanding AI investments, with over half (52%) stating they are actively adopting AI agents and preparing to implement them at scale. Nonetheless, rapid investments have sometimes resulted in challenges for technology integration and coherence. More than half (52%) of respondents say the speed of tech investment has created a fragmented and piecemeal technology environment in their organisations.

Data environment and technical challenges

The importance of integrated, enterprise-wide data architecture is clear among respondents. Over half (58%) of Singapore CEOs believe such architecture is critical for collaboration across business functions, and 68% view their organisation's proprietary data as key to unlocking the potential of generative AI. Issues with data integration, however, are limiting the effectiveness of AI deployments.

As AI adoption accelerates creating greater efficiency, and productivity gains, the ultimate pay-off will only come to CEOs with the courage to embrace risk as opportunity. Meaning, focusing on what you can control, especially when there is so much you can't. When the business environment is uncertain, using AI and your enterprise data to identify where you have leverage is a competitive advantage. At this point, leaders who aren't leveraging AI and their own data to move forward are making a conscious business decision not to compete.

The above was written in the study foreword by Gary Cohn, Vice Chairman of IBM.

Workforce transformation and skills demand

The study signals that digital transformation remains a top priority, but requires skilled talent and adaptable workforce strategies. Nearly half (48%) of Singapore CEOs say they are hiring for AI roles that did not exist only a year ago. Additionally, around 32% of the workforce is expected to need retraining or reskilling in the next three years. Automation will also play a role in bridging skills gaps, with 67% of organisations planning to use it to address talent shortages.

Business leaders in ASEAN are under pressure to demonstrate ROI from AI while needing to invest in long-term capabilities to stay competitive. This balancing act is made even more complex by the region's fragmented digital landscape, with varying national regulations and inconsistent standards for cross-border data flow. Singapore stands out with its national AI strategy, and businesses must follow suit by building adaptable data foundations and investing in talent that can turn AI ambition into real results.

This was commented by Abraham Thomas, Managing Partner, IBM Consulting, ASEAN, who also emphasised strategic alignment of data, technology and human capital as central to capturing the benefits of AI.

Balancing innovation and ROI

The findings also reveal that CEOs in Singapore face competing demands between achieving short-term ROI and investing in long-term innovation. Only 23% report expected ROI from AI initiatives over recent years, and while 52% say they are experiencing value from generative AI investments beyond cost reduction, a significant majority (77%) acknowledge investing in technologies before fully understanding their value, due to fears of falling behind competitors. At the same time, only 40% believe in taking a "fast and wrong" approach versus a "right and slow" method when adopting new technology.

Call for agility and strategic leadership

There is a recognition among CEOs of the need for more agility in budgeting. 58% say their organisations find it difficult to balance funding for existing operations with innovation when faced with unexpected changes, while 62% desire increased budget flexibility to pursue digital opportunities for growth.

Strategic leadership and specialised expertise are also viewed as key enablers for AI success. 75% believe that organisational success is tied to having leaders with a deep understanding of strategy and the authority to make critical decisions, while 72% say differentiation depends on having the right people with the right skills and incentives in the correct roles.

The report draws from responses collected in early 2025, examining key areas such as technology adoption, strategic decision-making, leadership approaches, and talent strategies across industries and sectors.