Budget 2024: Singapore goes all-in on AI

Under the banner of ‘Building Our Shared Future Together’, Budget 2024 was delivered amid heightened market interest by Lawrence Wong, Deputy Prime Minister and Minister for Finance.

This address on 16 February kicked off the first instalment of the ‘Forward Singapore’ program which was first introduced to the public in October 2023. The aim is to emphasise opportunities, provide assurances and outline collective responsibilities to keep the nation “united” in times of change and uncertainty.

In that context, Budget 2024 was designed to serve as a comprehensive roadmap capable of guiding the city-state through the complexities of a challenging global landscape while promoting inclusive growth and resilience across all sectors of society.

With a wide range of initiatives covering economic resilience, social support and environmental sustainability, one notable inclusion stood out from a technology standpoint.

At least $1 billion in SGD will be invested over the next five years to develop artificial intelligence (AI) compute infrastructure, talent and industry development under the National AI Strategy 2.0, which launched last year.

This investment aims to attract AI talent and develop capabilities within the community, strengthening the country’s competitive advantage to be a global AI hub by raising the quality of AI creators and practitioners.

“Budget 2024 transcends investments in growth areas such as AI, productivity, and energy transition, to address social needs like healthcare, education, and build a vibrant arts and sports scene,” said Lim Kexin, a PwC Partner specialising in Entrepreneurial and Private Business Tax in Singapore.

“Bringing vision to action, these measures reflect the Government’s commitment to Forward Singapore’s collective hope for a shared future, while energising Singapore Inc 2.0.”

According to Kexin, while the world is still deliberating how to best navigate the opportunities and risks of AI, the government has made a “decisive move”.

A commitment to increase investment for critical advanced AI chips amid plans to quickly anchor a community of AI centres of excellence is “especially laudable”. This is in addition to the government’s previously announced ambition of tripling Singapore-based AI practitioners to 15,000.

“It is bold and holistic moves like these, which will put Singapore ahead in the new economy and provide a further boost for our next phase of economic growth,” Kexin added.

For Greg Unsworth – Digital Business and Risk Services Leader at PwC Singapore – the investment further reflects the potential that AI holds in transforming the nation’s economy in the near future.

“This investment will help to realise the National AI Strategy 2.0’s outcomes of developing AI talent, industry and infrastructure,” Unsworth noted.

“All of which need to be underpinned by a trusted environment for AI, where businesses, the government and the broader Singaporean society can continue to experiment with AI, scale it and eventually realise its promise.”

Additional spending on AI came within the context of a further $3 billion investment under the Research, Innovation and Enterprise 2025 Plan that was launched in 2020. The Plan invests in areas of national priority such as advanced manufacturing, sustainability, healthcare and the digital economy.

“Innovation sandboxes were established in 2023 to enable businesses to build production-ready generative AI solutions and develop evaluation benchmarks for trusted generative AI (GenAI),” stated Ching Ne Tan, Partner and Corporate Tax Leader at PwC Singapore.

Announced in early February, Ching Ne SMEs are able to receive a grant from IMDA to trial one of the GenAI solutions curated with industry and technical experts from Institutes of Higher Learning in use cases involving customer engagement, marketing and sales.

“The winning formula for this year’s budget is to act now,” Ching Ne added.

According to PwC, such investments “exemplify” Singapore’s proactive approach towards embracing emerging technologies to achieve sustainable progress and build up the competitiveness of local enterprises and people.

“This will certainly propel AI-enabled digital transformation efforts for businesses and allow them to realise their fullest potential,” outlined Charles Loh, Consulting Leader at PwC Singapore.

“In addition, the partnerships with leading organisations to establish their AI ecosystems in Singapore will be a key thrust in building a deeper pipeline of AI talent, spurring innovation and ultimately building stronger and sustainable businesses across every sector.”