Artificial Intelligence (AI) empowers businesses to do more with less people.
Many businesses are racing ahead to take full advantage.
DBS Bank’s announcement that AI will eliminate 4,000 jobs across 19 markets provides both a proof point and a harbinger of what’s to come. The United States’ latest economic numbers do as well, finding itself enjoying economic growth with no increase in employment.
Across the world, corporates eliminate job openings to make financial space for larger IT budgets and defer filling open positions that AI may soon make redundant.
The Singapore government’s actions to address these challenges constitute a political necessity, as more than half of employees in Singapore are worried AI will take over their jobs within the next two years, according to Manpower’s Global Talent Barometer.
Announced last week, Singapore’s Budget takes steps to mitigate the harms that will come from adopting AI without workforce training.
But this could amplify other harms that AI brings.
As sustainable business network and consultancy BSR puts it, “Social and environmental impacts are at the core of AI risks and opportunities.”
Singapore’s Budget acknowledges need to protect workers in the AI era
Singapore’s 2026 Budget recognises that AI adoption comes with immense potential: “To raise productivity, unlock new discoveries, and transform lives in ways that we are only beginning to understand,” said Prime Minister Lawrence Wong.
At the same time, the Budget also recognises that “with this promise comes deep deep concerns” key amongst them that “workers worry that AI will displace jobs.”
Singapore has established a National AI Council chaired by the prime minister to ensure AI will be deployed deliberately where productivity gains and exportable capabilities can be meaningful.
With a growing risk of people losing or not getting a job that requires AI skills, the Budget includes measures to upskill AI use, including six months of free access to premium AI tools for Singaporeans who take up selected courses, and productivity support for firms.
Just as younger workers and other individuals will be displaced by AI, Singapore takes these steps to prevent what the Singapore Business Federation refers to as the “AI divide”, in which larger firms accelerate and smaller businesses struggle.
The challenge: the more you work to ensure AI benefits as many people as possible, the more you increase the detrimental environmental impact that will bring.
Simultaneously, Singapore’s Budget battles the climate crisis
The climate crisis threatens Singapore, through rising sea levels, increased temperatures, and more intense rainfall.
Singapore’s Budget recognises the need to keep up its efforts to combat the climate crisis, even as “some other governments are scaling back their climate ambitions”, as the prime minister asserted during his Budget speech.
Already, Singapore has the highest carbon tax rate in Asia.
Its solar deployment target has been raised.
Singapore continues importing low-carbon electricity, and moves to further diversify its energy mix, including hydrogen and nuclear power.
The country is aiming for 100 per cent cleaner energy vehicles by 2040.
Its efforts on AI will make such efforts even more necessary.
The International Energy Agency projects that global data-centre electricity use will double by 2030, driven by AI’s growing demand for computing power. Data centres already consume over 1.9 trillion litres of water each year, a figure expected to rise sharply by 2030 as cooling and chip production intensify.
Each new AI model adds to the load – more energy use, more emissions, and greater strain on power grids.
Singapore’s AI plans add to that.
The reality to balance: the impossibility of separating AI’s growth from its increasing emissions and water usage.
Government cannot address AI challenges alone
Singapore understands AI challenges that social compact.
With the government leading with reskilling workers with practical applications in real-world business contexts, all will be for naught if businesses and investors do not follow.
The Singapore government sees clearly the threat that will come from a world in which the benefits of AI flow to the few.
Singapore also recognises the existential threat the climate crisis brings, including how AI adoption increases that challenge.
Recognising that data centres are heavy users of water and power, Singapore’s Infocomm Media Development Authority (IMDA) issued a Green Data Centre Roadmap to pioneer the sustainable growth of data centres.
But Singapore cannot do it alone.
Addressing all elements of the Responsible AI trilemma simultaneously proves difficult and cannot be done without businesses and investors engaged as well.
Significant resources and difficult choices are needed to confront the challenges.
Without real investment in reskilling from corporates, the fallout will extend far beyond lost jobs.
Likewise, businesses must do what they can to reduce their Scope 3 emissions which will increase with their AI adoption.
Yes, investors will and should focus on achieving the gains to their returns from efficiency.
But businesses and investors cannot rely on government while simply prioritising productivity without considering their impact on the environment or livelihoods.
If they do, this will deepen inequality, erode social cohesion, and threaten national stability. All of which will hit their bottom line.
Without the public and private sectors working in the same direction, addressing the negative environmental impact of AI, job losses and increasing income inequality simultaneously may be a challenge even AI cannot solve.
Steven Okun is CEO of APAC Advisors, a Singapore-headquartered consultancy focused on geopolitics and responsible investing. Megan Willis is APAC Advisors’ senior advisor and Noemie Viterale is an associate.
