Asian city state’s targeted strategy has made it a preferred innovation hub for global companies.

Singapore has attracted major capital commitments in artificial intelligence (AI) operations from a host of multinationals, as the government’s support and strategy to create an ecosystem for the disruptive technology bears fruit.

Major companies have collectively set out plans to invest billions of dollars into AI hubs in Singapore in 2025, including mining giant BHP, cloud computing specialist Oracle, professional services firm PwC and southeast Asian super-app Grab. OpenAI, the company behind ChatGPT, also has an office in the city state.

Singapore has prioritised its AI and technology ecosystem, starting with its 2014 Smart Nation initiative followed by a dedicated national AI strategy in 2019, which was updated in 2023. Lawrence Wong said in February 2024, when deputy prime minister, that Singapore would invest more than S$1bn ($778m) over five years into AI compute, talent and industry development.

“Singapore has developed an ecosystem for AI over the past decade,” says Tim Lin, a Singapore-based partner of The Digital Infrastructure Collective (Asia). The country’s “forward-leaning approach to adopting technology and partnering with industry leaders to co-create solutions” makes it an attractive option for companies, he adds.

In May 2025, BHP said it would open its first industry AI hub in Singapore. Meanwhile, PwC committed $4m over three years to open a centre it aims to use as an ‘AI factory’. This follows several announcements in March, including brewing company Heineken’s first global lab for developing generative AI solutions and Salesforce’s pledge to invest $1bn in Singapore over the next five years. 

Marc Benioff, CEO of Salesforce, said that Singapore is “at the forefront” of a shift where businesses will be transformed by autonomous AI agents that augment the work of humans. The US software giant aims to drive adoption of Agentforce, which allows organisations to build and deploy customised autonomous AI agents. 

Multinationals are investing globally “where the government is committed to putting resources into creating AI ecosystems”, such as Singapore, the UAE and US, says John Lovelock, chief forecaster of consultancy Gartner, adding that we are likely to see more businesses set up AI operations in southeast Asia. 

A major draw for Singapore is access to computing power, given its high concentration of data centres, and the data processing capacity in neighbouring countries like Malaysia and Indonesia. The need for access to a limited supply of new “AI-optimised servers” is pushing companies to set up in hubs like Singapore where there is a “more reasonable chance of their demand being fulfilled”, says Mr Lovelock.

But high demand is creating bottleneck due to power and land constraints. Sherwin Loh, Singapore country director at consultancy Vriens & Partners, says tightening of US chip export curbs may also mean companies face a challenge in acquiring the necessary hardware for their AI operations. 

“Singapore’s historically advantageous position as a welcoming hub for both US and Chinese AI companies is increasingly precarious amid escalating geopolitical tensions and tech bifurcation,” he says, noting that this may force Singapore to choose sides and limit its ability to attract diverse AI investments.

Even as Singapore scales up its AI talent pool through targeted training and attraction initiatives, local businesses argue there is a skills shortage. Nearly half (47%) of 350 Singapore-based business leaders surveyed in April 2025 by Milieu Insight for HR platform Deel said that the local talent pool was insufficient.