Singapore companies weigh AI potential and limits, reveals Dell Technologies study

Dell Technologies' study shows that Singapore companies are moving ahead with AI, but many still struggle with integration, skills, and data preparation.

Singapore companies are moving ahead with AI, but many are still working out how to turn those plans into real value. That picture comes from new research that looks at how organizations in the country are handling innovation, AI and GenAI, sustainability, and security, and how their progress compares with the wider Asia Pacific and Japan region.

The study shows that AI adoption in Singapore is high and close to the regional average. However, while businesses are actively implementing AI tools, their overall focus on innovation is slightly lower than the rest of APJC. This gap suggests room for companies to use new ideas more deliberately, so that technology adoption also brings wider gains.

"High AI adoption paired with cautious ROI expectations shows that organizations are intentional and critical about where AI delivers real value. Singaporean companies are ahead of the Asia Pacific and Japan region in terms of adopting AI and Gen AI – 52% of Singaporean companies are in the mid to early stage of adoption, as compared to the regional average of 47%," said Andy Sim, Vice President and Managing Director, Singapore, Dell Technologies.

"But with 95% acknowledging integration challenges and 44% struggling to keep pace with rapid changes in AI, it's clear that ambition is also met with realities such as data security, selecting the right technology partner, and a workforce with the right AI skills. Organizations can best harness AI when they couple AI ambition with robust infrastructure, skilled talent, and trusted partners who can help navigate complexity."

The report outlines several trends that influence how businesses' plan and invest. Most firms in Singapore, 72%, believe innovation to be vital to their strategy, and 73% say the same for AI and GenAI. Sustainability and security are also major priorities, with 80% and 85% placing them high on the agenda.

AI adoption levels remain steady. More than half of companies are in the early or mid-stage of adoption; 27% are deploying AI tools in day-to-day work, and 15% already have mature GenAI use. Another group, around 21%, has put leaders in charge of AI planning but has not yet pinned down clear use cases.

Expectations for returns, however, are measured. Companies in Singapore expect about a 26.9% return from AI investments, below the APJC average and well below expectations in India and Southeast Asia. As a result, 42% say they do not expect strong short-term value from AI.

Adapting to change remains a challenge. Many companies struggle to keep pace with new technology shifts, unclear regulations, and rising competition. Almost all—over 95%—say it is hard to fold AI, sustainability, and security into their wider plans.

Choosing the right partners and closing skill gaps are major concerns. One-third point to partner selection as a hurdle, and almost all agree that staff need stronger AI-related skills. Data science, machine learning, critical thinking, creativity, and process knowledge are seen as the most important.

Companies also continue to face obstacles in AI deployment. Data security and privacy, compliance, system integration, and lack of expertise are among the most common issues. Preparing data for AI adds to the pressure, with many citing privacy risks, sensitive data handling, and limited internal experience.

The environmental impact is another severe concern. Most organizations worry about AI's energy use, and many are adopting tools, hardware upgrades, and efficiency measures to manage it.

The research paints a picture of a market that is ambitious but cautious. Singapore companies are clear about the value they want from AI and sustainability, but they also recognize the need for stronger skills, better data foundations, and the right support to move forward.