The adoption of artificial intelligence (AI) among enterprises in Singapore saw significant growth in 2025, with more than one in five businesses integrating the technology, according to the latest data released by the Infocomm Media Development Authority (IMDA) on October 5. The country’s digital economy expanded to over S$144 billion, accounting for 19.3% of the national gross domestic product (GDP), up from 18.8% in 2024.

The report highlights a rise in AI adoption across all enterprises, climbing from 14.7% in 2024 to 23.5% in 2025. Among small- and medium-sized enterprises (SMEs), AI use increased from 14.5% to 23.4%, while larger companies saw adoption rates grow from 62.5% to 70.4%. This expansion in AI integration coincided with a 3.8% year-on-year rise in technology sector employment, reaching 222,200 workers in 2025 from 214,000 in 2024. The fastest-growing roles were in AI, data analytics, and cybersecurity.

Singapore’s digital economy comprises both the information and communications sector—encompassing telecommunications, computing, and software—and the adoption of digital technologies by non-tech industries. The latter accounted for the largest share of the digital economy, growing 3.6% to S$97 billion in 2025, while the tech sector grew 6.1% to S$47.1 billion. Notably, demand for tech talent remains concentrated outside the traditional technology industry, with tech employment rising 5.3% in non-tech sectors compared with 1.8% in the tech sector.

Median monthly wages for tech workers remained substantially higher than the overall workforce median, with tech salaries reaching S$8,000 in 2025, compared with S$5,000 for all resident workers. Digitalisation also remained widespread, with 96.4% of businesses adopting at least one of six digital domains—namely cybersecurity, cloud technologies, e-payments, e-commerce, data analytics, and AI—up from 95.1% in 2024.

More companies showed intentions to implement AI, with the proportion of enterprises planning to adopt AI within the next year doubling from 5.6% in 2023 to 12.1% in 2025. Among current AI users, 40% are transitioning from pilot projects to broader implementations. Firms reported benefits primarily in increased productivity and process improvements (nearly 88%), followed by cost reductions and resource optimization (44%).

AI utilisation among workers also increased, with nearly 86% employing AI tools at work in 2026, up from 78% the prior year. Workers cited improved productivity (73%), enhanced work quality (69%), and better problem-solving abilities (68%) as major advantages. Around one-third of AI users reported spending less time on tasks, with 60% saving up to an hour daily, enabling focus on other activities. The most common AI applications included content creation (77%), automation of processes (64%), communications (54%), and data exploration (52%).

Despite widespread AI use, a skills gap persists. While 68% of workers acknowledged the need to upskill or reskill in AI, only 37% had pursued relevant training in the past year. Barriers included lack of employer nomination (35%), insufficient time (approximately 35%), and uncertainty over appropriate courses (about 25%). IMDA emphasized the need for clearer guidance and enhanced support to help workers develop AI competencies.

To address this, IMDA is expanding its National AI Impact Programme. The initiative aims to train 40,000 tech professionals over the next three years with advanced AI skills capable of software development and autonomous agent creation. For non-tech workers, the programme plans to train 100,000 professionals by 2029 in AI skills tailored to specific fields like accountancy and law.

Industry representatives noted challenges in AI adoption, especially among SMEs. Ang Yuit, president of the Association of Small and Medium Enterprises, pointed out that many SMEs struggle with limited time, budgets, and expertise to integrate AI into their processes. He also highlighted a shortage of specialized AI talent within enterprises compared to more established roles such as social media marketing.

Economic commentators cautioned about uneven benefits from digital economy growth. OCBC chief economist Selena Ling said disparities depend on whether workers are in sectors experiencing digital expansion with talent shortages or in lagging industries facing potential stagnation without intervention. She noted concerns over structural skills mismatches and job displacement risks driven by AI and automation.

The report underlines AI’s increasing role in Singapore’s economy and workforce, alongside ongoing efforts to enhance skills and address challenges tied to adoption and equitable growth.