Singapore organisations are moving faster than global peers in turning artificial intelligence (AI) pilots into full-scale deployments, but governance, skills and regulatory challenges continue to limit the technology’s broader transformational impact, according to a new Deloitte report.
The Deloitte AI Institute’s 2026 “State of AI in the Enterprise” report draws on a global survey of more than 3,000 director- to C-suite-level executives involved in AI initiatives, including 75 respondents from Singapore. Titled The Untapped Edge, the study examines how enterprises are adopting AI and the strategic choices shaping its long-term value.
Singapore firms close the pilot-to-production gap
The report finds that 32 per cent of Singapore respondents have moved at least 40 per cent of their AI pilots into production, compared with a global average of 25 per cent. Over the next three to six months, 54 per cent of respondents in Singapore and globally expect to reach similar levels of deployment.
Deloitte notes that organisations are balancing the need to maintain core operations while investing in emerging technologies. To overcome what it describes as “pilot fatigue”, the report highlights the importance of a clear AI roadmap that enables successful trials to be scaled across the enterprise.
“Business leaders in Southeast Asia have strong AI ambitions, and they are already reaping benefits, particularly in terms of productivity gains,” said Chris Lewin, AI & Data Capability Leader at Deloitte Asia Pacific.
“As they continue to invest in AI, they will need a clear roadmap to guide their transformation beyond incremental optimisation, with effective governance firmly embedded at all levels,” he added.
Productivity gains dominate current AI value
Singapore businesses are already seeing tangible benefits from AI adoption. About 73 per cent of respondents reported improved efficiency and productivity, higher than the global average of 66 per cent. More than half (53 per cent) also said AI has enhanced decision-making through data-driven insights, in line with global results.
However, Deloitte’s report suggests that AI’s deeper transformational potential remains underutilised. Only 33 per cent of Singapore leaders said their organisations are redesigning key processes around AI while keeping existing business models. Just 28 per cent reported using AI to fundamentally reinvent core processes and business models, although this remains higher than the global average of 17 per cent.
Key barriers cited by Singapore respondents include regulations and compliance (27 per cent), followed by AI skills and knowledge gaps (24 per cent). High implementation costs and insufficient technology infrastructure were each cited by 15 per cent of respondents.
Workforce redesign and agentic AI governance
Preparing employees for AI-driven change is a growing focus. More than half of Singapore firms (53 per cent) are prioritising AI fluency, matching the global average. At the same time, 47 per cent are redesigning career paths and mobility strategies due to AI adoption, compared with 33 per cent globally.
The report also points to rapid growth in agentic AI, systems capable of acting autonomously rather than merely providing recommendations. About 72 per cent of Singapore companies plan to deploy agentic AI across multiple operational areas within two years, up from 14 per cent today.
Despite this momentum, only 14 per cent of Singapore respondents said they have a mature governance model for agentic AI, below the global average of 21 per cent. Deloitte warns that stronger oversight frameworks are needed as autonomous systems take on more direct decision-making roles.
Physical and sovereign AI gain attention
Adoption of physical AI, which combines AI with machines and control systems, is also set to rise. Eighty-four per cent of Singapore businesses expect to use physical AI within two years, up from 53 per cent today. Digital twins, collaborative robotics and intelligent security systems were cited as the most impactful use cases.
Concerns around sovereign AI are becoming more prominent. Seventy-seven per cent of Singapore respondents said data residency and local compute requirements are important to strategic planning, while 57 per cent expressed concern over reliance on foreign-owned AI technologies.
