Singapore firms boost AI, sovereign cloud as security rises
Singapore enterprises are increasing investment in generative AI and showing growing interest in agentic AI, as security concerns and digital sovereignty reshape how businesses choose technology and telecommunications suppliers.
The findings come from EY's Reimagining Industry Futures study 2026, based on a survey of 1,590 businesses across 25 countries, including 48 enterprise respondents in Singapore.
Generative AI leads technology investment across sectors in Singapore. The survey found 44% of Singapore enterprise respondents are currently investing in agentic AI, with a further 25% planning to invest in the next year. Globally, 34% are investing now and 32% plan to invest over the next year.
Interest extends beyond AI. Investment in 5G has risen year on year, and sovereign cloud has moved onto enterprises' investment radar amid concerns about cybersecurity, regulatory compliance, and dependence on foreign vendors.
External pressures
In Singapore, respondents ranked competitor actions as the most significant external factor shaping technology investment decisions (86%, versus 84% globally). Environmental, social and governance considerations followed (83% in Singapore, 79% globally).
Policies and laws governing technology and data were also prominent, cited by 81% of Singapore respondents, compared with 89% globally. Geopolitical uncertainties such as trade wars and tariff disputes ranked lowest among the factors listed (79% in Singapore, 81% globally).
Even so, supplier strategies are shifting. The survey found 71% of Singapore enterprise respondents are reassessing supplier relationships due to the changing geopolitical environment, compared with 77% globally.
Digital sovereignty is adding another layer of review. In Singapore, 83% said they are subjecting their long-term technology roadmaps to greater scrutiny because of the trend, versus 74% globally.
Sovereign cloud
Adoption of sovereign cloud is gaining momentum among Singapore enterprises. The survey found 19% are currently investing in sovereign cloud solutions, slightly above the global figure of 17%. Over the next three years, 57% plan to invest, compared with 53% globally.
Cybersecurity and data control were the top drivers, cited by 61% of Singapore respondents, matching the global result. Compliance with national policies and regulation ranked second (53% in Singapore versus 39% globally).
Reducing reliance on, or lock-in with, foreign technology vendors was also a significant motivator, cited by 44% of Singapore respondents, compared with 34% globally.
Joongshik Wang, EY Asean Technology, Media & Entertainment, and Telecommunications Leader, linked the shift to tighter expectations around data control and compliance.
"Digital sovereignty is compelling enterprises to re-evaluate their existing cloud vendor relationships for compliance with national regulations and the need for greater control over their data. Service providers should strategically refine their go-to-market approaches in sovereign cloud and explore innovative ways to differentiate their offerings," Wang said.
Supplier selection
Security is now the top supplier attribute Singapore enterprises look for in telecoms and technology providers. The study pointed to customer data protection and regulatory compliance as the key reasons for the shift.
Competitive pricing or pricing model and end-to-end solutions ranked second. Enterprise respondents also tended to rate information and communications technology providers and cloud vendors ahead of telcos in delivering business outcomes.
At the same time, telcos appear to have a stronger position in some areas. In Singapore, 40% of respondents viewed telcos as digital infrastructure guardians, compared with 33% globally.
Respondents also highlighted where suppliers need to improve. In Singapore, 52% cited a better understanding of business and technology priorities as the most desired improvement, versus 43% globally.
Evidence and credibility also emerged as gaps. In Singapore, 79% said vendors do not provide enough case studies showing how they have delivered value to other businesses. Another 73% said vendors do not demonstrate how they have used technologies internally to support their own transformation. Both measures were 59% globally.
Service expectations
After-sales support is another priority for enterprise buyers. In Singapore, 73% want higher-quality after-sales experiences, compared with 53% globally. Some 52% want better access to service providers' technology experts, broadly in line with the 51% global result.
Nearly half of Singapore respondents (48%) want more agile interactions with vendor sales representatives, compared with 43% globally.
The study also suggests vendor consolidation is becoming more likely as enterprises narrow their supplier lists. In Singapore, 54% plan to consolidate vendors in the next 12 months, up from 41% last year. Globally, the figures were 43% this year and 35% last year.
Wang said telcos face pressure in core connectivity and need clearer differentiation in adjacent services.
"The traditional connectivity business is becoming increasingly saturated, diminishing growth prospects for standalone connectivity solutions. Telcos should continue to evolve from pure connectivity providers to strategic enablers. This includes investing in AI-powered, software-defined networks to deliver superior reliability and more dynamic service quality, while offering network-as-a-service and edge computing to enable enterprise innovation. The outlook is also positive for telcos that can enhance their role as security specialists, given B2B customers' growing focus on vendor security credentials and the emergence of new security-related services such as sovereign cloud and fraud management APIs (application programing interfaces)," Wang said.