Disclaimer: Unless otherwise stated, any opinions expressed below belong solely to the author. Data sourced from Singapore’s Ministry of Manpower.
Singapore has become one of the battlegrounds in the global war for AI talent.
American giants OpenAI, Google, Meta and Anthropic are expanding their presence, while Chinese companies such as Alibaba, Huawei and ByteDance are increasingly treating the city as both a regional base and recruiting ground.
Fresh AI hires can receive S$70,000 to S$90,000, experienced machine-learning engineers can comfortably cross six figures, while the most sought-after PhD-level specialists may receive packages worth S$200,000 to S$350,000 or more, as reported by the Straits Times in May.
Chinese companies have been particularly aggressive, courting students at Singapore universities and dangling spectacular offers before some have even graduated.
But behind the salary headlines lies a more important question: how much are these companies actually investing in Singapore, and how much of that would remain if the AI boom suddenly ended?
First OpenAI lab outside the US
In May, OpenAI announced more than S$300 million for its OpenAI for Singapore initiative, including its first Applied AI Lab outside the United States. It plans to create more than 200 technical jobs here over the coming years.
Google DeepMind has also opened a Singapore research lab and expanded its partnerships with the government in healthcare, scientific research and workforce development.
Anthropic, the creator of Claude, which received investment from GIC and Temasek, has begun building a Singapore presence, which may eventually become a major regional operation.
Meanwhile, Chinese giant Alibaba selected the city for its first AI Global Competency Center—although it’s the Chinese companies whose commitment to Singapore might be the most shaky.
Friction with China
Around 50 Chinese AI-related firms have reportedly set up here since 2024, attracted by Singapore’s legal system, access to international capital, political stability and ability to operate relatively comfortably between China and the West.
Some are undoubtedly building genuine businesses here, while others may simply be acquiring a Singapore address. Therein lies the risk.
For Chinese tech companies, the city offers a convenient international face at a time when operating directly out of China can complicate access to Western customers, investors and technology.
The story of Manus shows just how complicated this can become. The AI startup packed its bags and moved its entire operation from China to Singapore before Meta agreed to buy it for around US$2 billion, only for Beijing to intervene and unwind the acquisition and bar Manus’ founders from leaving the country.
This warning salvo from the Chinese authorities may discourage mainland companies from using Singapore as a link to global customers and reduce the flow of jobs and money from all but the biggest companies.
Is it a bubble or a balloon?
The biggest danger, however, is outside of Singapore’s control. As the global AI buildout has reached extraordinary proportions, any sudden stop to it could throw the economy into a tailspin.
Alphabet, Amazon, Meta, Microsoft, Oracle and others are pouring hundreds of billions of dollars into chips, servers and data centres, betting that future AI revenues will eventually justify the expenditure.
Perhaps they will, and the bubble will turn out to have been a balloon, lifting everybody. But what if they don’t?
It is already clear that investment is rising far faster than the revenues currently produced by AI itself. Singapore is currently benefiting enormously from that spending, having raised its GDP growth forecasts for 2026 to around 5%, but the Monetary Authority of Singapore has raised concerns about what would happen if the demand faltered:
If . . . there is a major retrenchment in AI investment, it could sharply weaken global growth through a fall in business investment and semiconductor demand and negative wealth effects.
Chia Der Jiun, Managing Director, Monetary Authority of Singapore
Global thirst for semiconductors, electronics, financial services and technology has helped propel economic growth, while the arrival of AI companies is pushing up salaries for scarce technical workers.
But it also means that Singapore is becoming increasingly exposed to any future downturn.
If AI revenues disappoint and investors stop rewarding companies simply for spending more, the adjustment could be very painful. AI itself would not disappear, just as the Internet did not disappear after the dot-com crash. But the money could.
Recruitment bonuses would shrink, hiring would be frozen, and experimental regional offices would stop expanding. Startups dependent on continuous fundraising would disappear or consolidate. Expensive research teams could be moved back to headquarters. And layoffs would, inevitably, follow, like they did in the years following the pandemic spending extravaganza.
That is why the most valuable AI investments are not necessarily those producing the biggest salary headlines today.
They are the ones that become difficult to remove tomorrow: research labs, engineering teams, intellectual property, regional decision-making, local customers and operations deeply embedded in Singapore’s economy.
Still, not even large investments are immune to downsizing. Everybody enjoying the generosity of their AI employers should keep that in the back of their heads. Make the most of historic opportunities, but prepare for what might happen if they come to an abrupt end.
- Read other articles we’ve written on Singaporean startups here.
Featured Image Credit: depositphotos
