ELVA

[SINGAPORE] Companies in Singapore may be willing to pay a premium for artificial intelligence, but their bosses have little patience for spending that does not deliver value, according to a top Microsoft executive.

At a closed-door session with Singapore CEOs in October, one business leader asked Microsoft’s chief of commercial business Judson Althoff if he could predict how much their company would spend on AI tokens this year.

Althoff replied that he could not, recounting the exchange during an exclusive interview with The Business Times.

What he could, however, was help the executive determine the “right amount” of tokens spent for a given workflow.

The exchange reflects how Singapore bosses approach AI. The Republic’s firms, often seen as affluent, will pay a “certain premium”, he said.

However, “there is a precision element to operations and culture here that does not tolerate waste”, he added.

“While there may be a willingness to pay for value, there’s certainly a very low tolerance for inefficiency.”

Over the past two decades, Althoff has travelled to Singapore to speak to business leaders to understand their struggles. The conversations have centred on AI in the last few years.

In 2025, the questions revolved around AI experimentation. This year, the queries were more focused on measuring financial returns.

Yet, Althoff acknowledged that companies around the world, including in Singapore, are in the “very, very early phases” of seeing financial gains arising from AI.

This is despite users in the city-state emerging as one of the world’s leading adopters of the technology, according to Microsoft’s research.

As per the company’s Global AI Diffusion report – which tracks the adoption rate of generative AI among working adults – Singapore recorded the second-highest AI usage rate at 64.3 per cent in the second quarter of 2026, against a global average of 18.8 per cent.

A separate Microsoft report noted that 17 per cent of firms in the Republic are classified as frontier firms, against 10 per cent globally.

Frontier firms are defined as companies that have robust AI strategies and realise “significantly higher returns on investments”.

However, Althoff said that the value should not be over-analysed.

“The report talks about high diffusion rates, but really... that in itself is not even well understood,” he noted, pointing out the different ways in which AI could be used.

“Have you put a prompt in a chat window or have you kicked off some semi-autonomous work using an agent?”

Expanding footprint in Singapore

Microsoft recently announced that it will expand its presence in the city-state through a US$5.5 billion investment that will last from 2025 to 2029.

“We are excited about Singapore as an infrastructure hub,” he said. “We invested in Singapore really quite early on, in terms of our data centre capacity.”

Microsoft has three data centres operating in the country and is in talks to expand its digital infrastructure footprint here, he added.

The investment will not only be focused on infrastructure, but also on R&D – “from AI models to the silicon that we develop”.

However, he did not elaborate on the specific spending mix and how much has already been invested in the Republic.

“Singapore is a great place for us to do business,” he said.

The way Althoff sees it, beyond the country’s role as a business hub, it also serves as a unique test bed for the company to see how it stacks up against the competition.

“It’s nice that it all culminates here because it’s one way to evaluate really how well we’re doing across all of the areas,” he noted. “It may seem counter-intuitive, but we love competition.”

Asked what keeps him up at night when he thinks about South-east Asia, Althoff responded: “Agility.”

Part of that includes governance, meaning the control that firms have over their own AI systems – from cybersecurity to AI guardrails, he said.

“There is an awful lot of work on governance that has to be done in order to get businesses comfortable with the rapid pace of adoption that I think they all need to have.”

That said, he noted that governance is “maybe a bit more well-regarded” in Singapore than in other South-east Asian countries, adding that elsewhere, he has to explain the significance of monitoring what AI systems are doing.

Infrastructure is another gap observed by Althoff.

Singapore has the potential to be an AI hub for Microsoft, “if we can get to a place where we have the right amount of infrastructure”, he said.

Data centres remain a key element in the push, but other factors such as power, networking and infrastructure reliability need to be “better addressed”, he added.