Singapore will set up a new National AI Council, chaired by Prime Minister Lawrence Wong, to provide strategic direction and drive Singapore’s AI agenda.

“We will review regulations and create sandboxes, so companies can test AI innovations safely and responsibly. Within the government, we will better align our R&D, regulatory, and investment promotion efforts— so that agencies act in concert and pull in the same direction,” Wong said on Thursday (Feb 12) in the Budget 2026 statement.

For AI to truly transform Singapore’s economy, he said companies must also adopt it comprehensively. Many firms say they are using AI. But end-to-end transformation is demanding. It requires organising data, rebuilding systems, redesigning processes and jobs, and retraining workers, he noted.

“Even major global companies are grappling with this. Those that succeed will gain a decisive competitive advantage. A few leading Singapore companies like DBS and Grab are already moving decisively on AI transformation. We want to encourage more to do so. We will launch a new Champions of AI program to support firms with the ambition to use AI to comprehensively transform their businesses,” he added.

To fully realise AI’s potential, Wong said the country must go beyond individual pilots and isolated experiments.

“We must organise at national level, and move with speed and scale. We will therefore launch a new set of national AI Missions. These missions will drive AI-led transformation in key sectors of our economy, and push the boundaries of what is possible. We will focus on four sectors: advanced manufacturing, connectivity, finance, and healthcare,” he said in the speech.

Wong, who is also the finance minister, said the government will also strengthen support for all enterprises, especially SMEs, so they adopt AI and benefit from it in practical ways.

“We will build on the Enterprise Innovation Scheme, which provides businesses with 400 percent tax deductions on qualifying expenditures in activities like R&D, innovation, and capability development. We will expand the scheme to include AI expenditures as a qualifying activity, for the Years of Assessment 2027 and 2028, capped at S$50,000 per Year of Assessment,” he added.

The government will also strengthen its existing support schemes. The Productivity Solutions Grant (or PSG) already helps companies to adopt digital solutions. Increasingly, these solutions will be AI-enabled.

“We will expand the PSG to support a wider range of digital and AI-enabled solutions, so that every firm, regardless of size, can access tools that help them work smarter and compete more effectively,” he said.

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Featured photo credit: MDDI Photo by Lim Sin Thai