AI investments grow, yet readiness gaps hold Singapore back, Kyndryl reports

Singapore companies are increasing AI spending and seeing early returns, but most still feel unready for future risks.

Many companies in Singapore are seeing stronger returns from their AI and cloud spending, but most leaders still feel unready for what comes next. That's one of the main themes in Kyndryl's second annual Readiness Report, which gathered views from 3,700 senior leaders across 21 countries. Only 24% of respondents in Singapore say they are fully prepared to handle future risks, a gap compared to the global average of 31%. While modernization is moving ahead, many firms say skills shortages and rising regulatory demands are slowing their progress.

"The Kyndryl Readiness Report shows Singapore is a nation in motion, yet most organizations on the island admit they're not ready for AI," said Guat Ling Ang, managing director, Kyndryl Singapore. "What strikes me in this report is the pragmatism behind the numbers. Fortunately, companies are adapting fast, rethinking cloud strategies, and demanding measurable returns on AI. This shows that resilience and modernization aren't optional. They're the foundation for what comes next."

AI spending is up, but many projects aren't moving forward

On average, Singapore companies raised their AI budgets by 33% in the past year. Even with the rise in spending, 53% of projects remain in pilot mode as leaders feel pressure to show results. Globally, 54% of organizations now report positive returns from AI, but many in Singapore say core technology issues slow them down. About 58% struggle to keep up with fast shifts in tech, more than half say older systems limit new ideas, and 68% feel their infrastructure is not ready for future risks.

AI is reshaping jobs, but many workers do not yet have the skills that employers say they need. While 87% of global leaders believe AI will fully transform roles within the next year, only 26% in Singapore feel their teams have strong enough technology skills to benefit from the changes. This makes digital skill-building the top workforce issue for companies in the country.

Last year's report showed a mismatch between confidence and actual readiness, and that tension remains. This year's findings show:

• More organizations worldwide are seeing returns from AI, but 62% still have not moved past early testing.
• While 90% say they can quickly test and scale new ideas, over half say their core systems still hold them back.
• Many expect major job shifts due to AI, but few say their workers use the tools often or have the technical ability needed.
• Global rules and political pressures are causing companies to rethink where their data sits and how it is managed.

Three in four leaders say they worry about geopolitical risks tied to global cloud setups, and 65% say they have already changed their cloud plans. Some are pulling data closer to home, some are reviewing vendors, and others are moving toward private cloud options.

The next test: people and culture

Almost nine in ten leaders expect AI to reshape jobs soon, but only 29% believe their workforce is ready. Many also point to internal culture as a barrier, with concerns about slow decision-making and resistance to new ideas.

The report identifies a group of "Pacesetters" who are moving faster by focusing not only on technology but also on training, culture, and leadership. Compared to others, they are far less likely to see their tech stack as a hurdle, more confident about adapting to new rules, and less likely to face cyber outages.

For Martin Schroeter Chairman and Chief Executive Officer Kyndryl, the findings of the report are not abstract concerns for global business leaders.

“The organizations that become pacesetters will successfully navigate these technology, people and regulatory readiness hurdles with a clear leadership vision and investment in innovation — to ‘tip the right way’ and turn potential obstacles into successful differentiators,” he said in the report.