SINGAPORE — Singapore’s plan to invest more than $743 million into artificial intelligence over the next five years could strengthen its position as a global business and innovation hub, tech executives said.

In his Budget speech on Friday, Deputy Prime Minister Lawrence Wong said Singapore will invest more than 1 billion Singapore dollars over the next five years to further boost the country’s AI capabilities.

“Surprisingly, nearly three-quarters of business leaders globally are ill-equipped for AI transformation, believing their preparations are limited by time, people, and money,” said Nithin Chandra, managing partner of Southeast Asia at Kearney, a global management consulting firm.

“This initiative will help ensure that businesses can capitalize on the opportunities afforded by technological advancements and capture new opportunities,” said Chandra.

As part of the investment, Singapore will work to ensure it can secure access to the advanced chips “that are so crucial to AI development and deployment,” Wong said.

Singapore will also work with leading companies here and around the world to set up AI centers of excellence to spur innovation, he added.

“This will incentivize companies to adopt AI solutions, prioritize AI skills to keep their workforce competitive, and encourage strategic partnerships and knowledge sharing across the industry, thus spurring overall innovation,” said Jonathon Dixon, vice president and managing director of APAC at Cloudflare, a global cloud services provider.

Singapore workers are already the world’s fastest when it comes to adopting AI skills, according to LinkedIn’s Future of Work report released in August.

“The increased focus and investment in AI capabilities, talent, and industry development is also exciting and important for Singapore to strengthen its position as a business and innovation hub,” said Mao Gen Foo, head of Southeast Asia at American experience management company Qualtrics.

Singapore was among the first countries to publish an AI plan in 2019. In December, the Southeast Asian nation launched the National AI Strategy 2.0 — an updated version of its AI initiatives, outlining ways to prepare the economy to harness and utilize AI to empower workers and businesses.

“Sustaining focus on AI and [machine learning] will ensure Singapore’s prominence in technological advancements, strengthening its position as an attractive hub for businesses and talent in an increasingly digitalized global landscape,” said Pannie Sia, general manager of ASEAN at Workday, an American finance and human resources software vendor.

Singapore has “very high” potential as a global AI hub because of an environment that spurs innovation, Google Cloud executive Caroline Yap told CNBC in an earlier interview.

To promote the responsible use of AI, Singapore rolled out AI Verify in May 2022 – the world’s first AI governance testing framework and software toolkit for companies. The tool allows users to conduct technical tests on their AI models and record process checks.

Google, Meta and Microsoft are among companies that have already tested the AI Verify tool or provided feedback.

“The SG$1 billion allocation towards AI which also includes secure implementation of the National AI Strategy 2.0 demonstrates the government’s commitment towards fostering a trusted and responsible AI eecosystem,” said Sujith Abraham, senior vice president and general manager of ASEAN at Salesforce.

“As AI adoption grows, consumers must be reassured that their data is safe, and that technology is being used for good,” said Abraham.