Singapore Is in Perfect Position to Court AI Companies From China
Singapore is open for business from the U.S. and China
I’ve recently been writing a lot about AI developments in Asia. Here let me repost an article that’s behind the paywall on the Diplomat for y’all.
The Lion City is once again attracting talent and capital from the region, especially from China, as artificial intelligence companies race to develop the next super app. Singapore, the city-state, has, in the last few years, been a top destination for big tech to set up APAC headquarters as geopolitical tensions heat up between the US and China and domestic regulations intensify in China. Singapore is now a major hub for ByteDance, Google, Netflix, Shein, and so on.
The Singapore Infocomm Media Development Authority (IMDA) announced a GenAI Sandbox program in February to support SMEs across industries in adopting AI and offer a grant for a three-month trial run program. Tribe and Digital Industry Singapore (DISG), a joint office between the Economic Development Board, Enterprise Singapore, and the IMDA, also recently announced a collaboration with NVIDIA in establishing an AI-focused accelerator program, showcasing multiple arms of the government bolstering the enhancement of the AI ecosystem in Singapore.
“Singapore is a good location for two reasons. First, it is easy to establish a company in Singapore, and for Chinese companies going global, Singapore allows more international and diverse exposure. Second, Singapore's overall tech environment is relatively strong, with all the major companies having huge operations here. So it's easier to build those networks and connections,” said Kelly An, Co-founder of OpenCord.AI, a 24/7 on-demand social media manager.
When Hong Kong pro-democracy protests broke out in 2019, Singapore saw an influx of capital, more specifically private equity money. Years later, it became a top choice for family offices and venture capitalists to set up shops. In comparison to the previous first choice, Hong Kong, Singapore boasts better tech entrepreneur visa rules, tax incentives, and often lower operational costs.
With China facing advanced chip and equipment bans from the US, Singapore is once again the perfect place for Asia-based talent to set up AI companies, from software to hardware. Singapore checks all the boxes needed for a founder, as it offers a strong talent pool, a vibrant ecosystem, proximity to PE/ VC money, and a free and open internet.
A country of under 6 million people, made up 15% of Nvidia’s revenue in the October 2023 quarter, only trailing behind the U.S. (34.77%,) Taiwan (23.91%), and China, including Hong Kong (22.24%) in Nvidia’s 2023 Q3 sales rankings. Whether the chips are used domestically for AI development or data centers or they are being repackaged and shipped off elsewhere, Singapore has successfully positioned itself as one of the world’s leading AI players.
The concerted push to attract some of China’s most promising AI startups to relocate seems all too natural and a win-win for both the companies and Singapore. Companies get access to international networks, public and private investments, and mature digital infrastructure, while Singapore gets another chance to court some of the brightest minds in the industry and leapfrog to obtain frontier technology.
“Singapore is an attractive place for many founders to set up entities targeting the global market because it shares the same internet ecosystem as the rest of the world, has good internet connectivity, and serves as an easy-to-access travel hub so many Singaporean AI companies can easily adapt a global roadmap,” said Yichen Guo, CEO of CapGo.AI, a Singaporean AI productivity app for lead generation.
Many echoed his comment and said that the fact that the country can offer AI developers access to a free internet would be enough incentive to draw in Chinese talent. The issue with training large language models (LLMs) in China is that it is limited to using data within the Great Fire Wall, whether it’s institutional censorship or self-censorship, and there is simply less information on a closed internet. So, there will be an inherent disadvantage for Chinese AI companies as there is just more data (in all languages, from all countries) to train for companies outside of China.
Ultimately, “ LLM performance improves with scale – more parameters, more and better training data, more training runs, and more computation,” wrote Goldman Sachs in a note.
An at OpenCord.AI said that the US or Europe could be intimidating for Chinese companies going global, while “Singapore feels like a safe harbor.”
But companies setting up shop in Singapore are not problem free Guo added, “The biggest challenge for AI applications in Singapore is that the market size of the region (Southeast Asia) is still relatively small and fragmented. Software businesses, in general, thrive better in developed countries with a higher willingness to pay.”