February 28, 2024

Categories: Finance - Investment

Subscribe With Us

Artificial Intelligence (AI) is revolutionising industries worldwide, with its impact on business growth becoming increasingly profound. Nations all over the world are sitting up and taking action – Singapore included – in the race to arms to become the forerunners in this digital revolution.

As investors, we should also examines AI’s role in driving business growth, focusing on key developments in Singapore’s technology infrastructure, national AI strategy, and the global AI market, as well as its implications for companies’ innovation and sustainability efforts.

Singapore’s recent announcement to invest up to $100 million to upgrade its Nationwide Broadband Network to deliver 10Gbps speed1 reflects the country’s commitment to harnessing AI for economic development. This investment is part of Singapore’s broader efforts to enhance its digital infrastructure and connectivity, laying the foundation for businesses to leverage AI technologies for improved efficiency and innovation.

Moreover, Singapore’s National AI Strategy 2.0, following years of planning, underscores the government’s proactive approach to fostering AI-driven growth. In his Budget speech, Deputy Prime Minister Lawrence Wong highlighted that the growth in the AI sector is not by chance but a result of deliberate planning and strategic investments2. This strategic approach has positioned Singapore as a leading hub for AI development and adoption, attracting global talent and investments in the process.

The global AI market’s growth is further evidenced by the positive outlook for companies like NVIDIA, which reported a blowout quarter driven by strong guidance for AI chip sales3. This demonstrates the increasing demand for AI technologies across industries and the significant opportunities for businesses to capitalise on AI-driven growth. In this context, it is essential for businesses to evaluate the sustainability of their AI strategies.

Questions such as the sustainability of the company’s business model, the recurring nature of AI-generated revenue, and the scalability of AI in driving business growth become paramount. Companies need to assess whether AI can truly help them scale their operations and drive sustainable growth in the long term.

Additionally, the impact of AI on business growth extends beyond revenue generation to innovation and sustainability. Budget 2024 introduces new tax credits – such as the Refundable Investment Credit scheme comes with a refundable cash feature – to support firms’ innovation and green transition4, highlighting the government’s recognition of AI as a key enabler for sustainable growth. Companies can leverage AI to drive innovation, improve operational efficiency, and reduce environmental impact, aligning with global trends towards sustainability and responsible business practices.

As the AI trend continues to reshape industries, investors must approach it with a balanced perspective, considering both its promises and pitfalls. Investing in AI offers significant potential for growth and innovation, as businesses can leverage AI technologies to streamline operations, improve decision-making processes, and enhance customer experiences. However, investors should also be mindful of the challenges associated with AI, such as ethical considerations, data privacy concerns, and potential job displacement.

To navigate the AI trend effectively, investors should adopt a strategic approach that prioritises responsible AI deployment. This could involve investing in companies that prioritise ethics and transparency in their AI strategies, adhere to regulatory standards, and prioritise data privacy. Additionally, investors should consider the long-term sustainability of AI investments, ensuring that companies have a clear roadmap for integrating AI into their business models and adapting to evolving market dynamics.

Overall, by approaching the AI trend with caution and foresight, investors can capitalise on its transformative potential while mitigating associated risks, ultimately driving sustainable growth and innovation in the digital age.

Disclaimer:‍‍‍‍‍‍ Investment carries certain risks. You should not just rely on results as an indication of your financial needs. You should understand and familiarise yourself with any investment and the associated risks before investing. You are also recommended to seek professional advice ‍‍‍before making any decision to buy, sell or hold any investment or insurance product. The views and thoughts expressed in the post belong solely to us, and not to Manulife Financial Advisers Pte Ltd, or any other group of individuals.

Share it with your friends!

Exclusive Content

Be Part of Our Exclusive Community

Subscribe to our newsletter to get the latest updates of our news and events.

Thank you for your message. It has been sent.
There was an error trying to send your message. Please try again later.