For years, the global race for artificial intelligence has been framed as a contest between Washington and Beijing. The United States commands the frontier models, cloud ecosystems and venture capital that shape global innovation; China, backed by scale, engineers and state coordination, is catching up fast.
But the world’s next frontier for AI power will not be determined by these giants alone. It will depend on how smaller yet adaptive states – such as Singapore – design new compacts between government and enterprise to sustain technological sovereignty and social legitimacy in the age of machine intelligence.
A state-enterprise compact for AI
America’s laissez-faire approach, which long privileged private enterprise and capital markets, created rapid innovation but eroded strategic control. The infrastructure that powers AI – data centers, energy grids and advanced chips – remains fragmented across private interests and vulnerable to supply disruptions.
When Washington moved to reassert control through the CHIPS and Science Act, it exposed how much critical capability had already migrated offshore. The resulting scramble for compute power and skilled workers showed that technological leadership, without state coordination, is brittle.
Singapore, whose economy is more exposed to global value chains than America’s, cannot afford a similar vulnerability. The country’s digital economy already contributes close to a fifth of GDP and continues to expand across finance, healthcare and logistics. Yet sustaining that trajectory will require reimagining what Singapore has long done well: An adaptive compact between state and enterprise updated for the AI age.
From protection to partnership
First, cyber-resilience must be a joint effort between the state and enterprises – an essential foundation for Singapore’s AI economy. At the 2025 Singapore International Cyber Week (SICW), the government announced it would share classified cyber-threat intelligence with critical sectors such as energy, telecommunications and finance to “level the playing field between defenders and attackers.”
This evolution from protection to partnership recognizes that in the AI era, security cannot rest on the state alone. The 2024 case of a Google engineer charged with stealing AI chip designs for transfer to China underscored this shared interest. Singapore’s doctrine of Total Defense has long affirmed that resilience is collective; its Digital Defense pillar already frames cybersecurity as a shared responsibility.
Building on this, Singapore should broaden its definition of “critical infrastructure” to include compute clusters, data exchanges and model-training facilities – the digital backbone of its AI economy. While recent cybersecurity amendments cover cloud and overseas systems, these AI-specific assets are not yet explicitly recognized, which risks leaving a gap in national resilience and collective cyber defense.
Scaling national AI champions
Secondly, Singapore must accelerate the growth of homegrown enterprises that can partner, not merely plug into, global AI giants.
The foundations are already emerging: Resaro is developing AI assurance capabilities with Singapore’s AI Verify foundation, setting benchmarks for responsible AI governance; ST Engineering’s new Multi-Combat Role Vessel – a “mothership” for unmanned systems integrating air, surface and subsurface operations – shows how digital capabilities can translate to physical systems; and my firm, Temus, is applying AI and human-centered design across government and industry to reimagine innovation in strategically vital sectors in Singapore.
Together with other like-minded firms, these enterprises should act as national capability builders, linking AI governance, applications and engineering into a coherent value chain for trusted AI.
Singapore could next project these capabilities abroad through the strategic government-to-government partnerships it’s forged. For example, the expanded Australia Comprehensive Strategic Partnership – covering defense, green energy, supply-chain resilience and digital infrastructure – offers a platform to align Singapore’s strengths in AI governance and systems engineering with Australia’s depth in applied research, defense technology and critical minerals.
Similar frameworks with New Zealand, France and Vietnam can extend cooperation into maritime security, cyber defence and dual-use innovation. Collectively, these partnerships position Singapore’s AI champions to evolve from domestic accelerators to regional force multipliers, helping shape an Indo-Pacific AI commons anchored in trust, interoperability and shared interests.
Broad-based AI fluency
The IMF predicts that AI will affect roughly 40% of jobs worldwide, while a global shortage of AI-skilled workers constrains adoption. For Singapore, where the fertility rate fell to 0.97 in 2024 despite the Dragon Year, the challenge is even sharper.
With an aging population and a shrinking local workforce, Singapore cannot afford to leave AI literacy to a specialist elite. It must cultivate horizontal fluency across professions, ensuring that workers in every sector can harness AI safely and productively.
This is where Singapore’s early push to become a Smart Nation in 2014, and its National AI Strategy launched in 2019, provides ballast. Today, nearly two-thirds of growth in its digital economy comes from non-tech sectors such as finance, healthcare, logistics and retail.
By embedding AI skills and tools across these industries, Singapore can further diffuse these needed digital capabilities through the wider workforce, narrowing the gap between an AI-enabled few and a displaced many.
Public institutions can also lead this transition. Schools can deploy AI tutors to personalize learning; hospitals can use AI-driven triage systems to free nurses for patient care; and social service agencies can apply generative tools to redesign programs and improve policymaking. Each initiative must emphasize human oversight, accountability and ethics – demonstrating that automation augments, not replaces, people.
Just as importantly, Singapore must remain a society that encourages experimentation, not fear. To win the AI race, responsible use must become second nature. The more Singaporeans understand and apply AI in daily life, the more confident and resilient the nation will become.
AI race ahead
America’s Rust Belt shows how manufacturing can hollow out when finance and services surge while industrial capacity migrates abroad. Hong Kong’s post-1980s offshoring of light industry to the Pearl River Delta and its subsequent over-reliance on finance and property produced fragility.
Across advanced economies, from Britain’s Midlands to Canada’s Atlantic provinces, services-led growth without a domestic tech-industrial core created imbalance and overdependency on actors beyond their sovereign control.
Singapore must avoid those mistakes as it renews its own industrialization efforts for the AI race – or risk watching others sprint ahead and leaving it behind.
Marcus Loh is chairman of the Public Affairs Group at the Public Relations and Communications Association (PRCA) Asia Pacific and a director at Temus, a Singapore-based digital services firm. Formerly the president of the Institute of Public Relations of Singapore, he helped strengthen the role of strategic communication and public affairs amid shifting policy, technological and geoeconomic landscapes. He is currently an MA candidate at the War Studies Department of King’s College London.
