AI investment expands as 41% of firms skip structured ROI analysis

They invest in AI due to opportunity or fear of falling behind.

Singapore organisations are rapidly increasing investment in artificial intelligence (AI), but many are doing so without clear measurement of returns, according to a new IDC InfoBrief commissioned by Expereo.

The report found that 32% of firms are investing aggressively in AI with little evaluation, largely driven by fear of being left behind, whilst another 41% are investing based on AI’s potential but without structured return on Investment (ROI) analysis.

About 35% of organisations said their AI implementations have exceeded expectations, whilst 25% report that outcomes have only partially met expectations.

Amongst organisations where AI underperformed, half cited weaker-than-expected performance, 42% pointed to higher costs or failure to achieve ROI, and another 42% highlighted poor-quality training data.

On the other hand, amongst those reporting success, 73% credited better-than-expected AI performance and 73% cited strong in-house skills as key factors.

Cost remains the biggest barrier to adoption amongst non-adopters, with 83% identifying it as a constraint, the highest level across all markets surveyed.

Other challenges include unclear benefits, lack of in-house skills, and workforce resistance, each cited by 50% of respondents.

At the same time, concerns around risk are rising, with 54% of organisations worried that AI introduces new security risks, 40% concerned about reputational, financial, or legal harm from AI-related anomalies, and 38% fearing loss of visibility over AI costs and ROI once systems are fully embedded.

Cybersecurity continues to be the dominant concern overall, with 64% of organisations rating it as a major threat, whilst AI implementation challenges are also significant, with 40% viewing them as a big or huge risk.

In terms of priorities, security and cybersecurity, along with networking and connectivity, are joint top areas of technology investment, each cited by 60% of organisations, with networking investment notably higher than the global average of 48%.

AI maturity remains uneven across Singapore, with 38% of organisations reporting that they are using AI extensively or have been transformed by it, whilst 12% are still in early stages or have not adopted it, slightly above the global average of 8%.

Digital sovereignty is also becoming a key concern, with 82% of organisations treating it as at least a moderate priority, driven mainly by the need to retain control over sensitive data (51%) and comply with regulations (44%).

Across APAC, AI investment is high but often poorly governed, with 37% of organisations admitting they are investing aggressively with little evaluation—nearly double the global average and well above the US (10%) and Europe (13%).