Singapore's AI Ambition: Budget 2026 Launches New "National AI Council" and SME Support

As global energy markets remain volatile, Singapore is doubling down on technology as its primary engine for long-term growth. Following the Budget 2026 announcements, the government has moved into the implementation phase of a massive national AI strategy, aiming to cement the Republic’s status as a global hub for artificial intelligence.

At the heart of this push is the formation of a new National AI Council, chaired by Prime Minister Lawrence Wong. This high-level body will coordinate AI research, regulation, and industry adoption across all government agencies, providing a unified direction for the private sector.

Sector-Specific AI Missions

The government has identified several "National AI Missions" to accelerate transformation in high-impact sectors:

•Advanced Manufacturing: Utilizing the A*STAR AI Centre of Excellence to build world-class, AI-enabled factories.

•Logistics & Connectivity: Streamlining supply chains through embodied AI in aviation and maritime sectors.

•Finance & Healthcare: Piloting secure AI applications within dedicated regulatory sandboxes.

Closing the SME Gap: The AI.dea Programme

While large enterprises in Singapore have seen high AI adoption rates (over 62%), local small and medium enterprises (SMEs) have lagged behind at just 14.5%. To bridge this competitive divide, Singtel Singapore and SIM Academy launched the AI.dea programme on April 29, 2026.

The initiative provides hands-on learning to help SMEs move from "experimentation to real-world implementation". To ensure accessibility, eligible firms can receive up to 90% in funding from SkillsFuture Singapore to cover costs.

Economic Headwinds and Resilience

These tech investments come at a critical time. While Singapore's GDP expanded by 4.6% in Q1 2026—largely driven by the global AI capital expenditure cycle—the broader outlook is clouded by geopolitical risks.

Economists note that while AI-related exports rose by 15.3% in March, the ongoing conflict in the Middle East has driven up the prices of crude oil and natural gas. This has already led to:

•Core Inflation rising to 1.7% in March 2026.

•Increased electricity and gas tariffs for the current quarter.

•Tighter supply of certain imported foods like salmon and jasmine rice due to shipping disruptions.

Despite these pressures, the government is betting that a "Champions of AI" programme and enhanced taxdeductions—allowing firms to claim 400% tax deductions.