# Companies should not use AI as an excuse to cut costs: Tan Kiat How - Date: 2026-09-28 - Added: 2026-09-29 - Who: Tan Kiat How (Senior Minister of State for Digital Development and Information, Singapore) · CNA - Source: https://www.youtube.com/watch?v=Wg7B9eISJRs - sgai: https://sgai.md/videos/v111/ - License: sgai-authored content (summaries, translations, analysis) is CC BY 4.0 — attribute and link to sgai.md. Verbatim source text (Hansard, speeches, transcripts, policy documents) remains © its original rights holders and is reproduced for reference only. Terms: https://github.com/meltflake/sgai/blob/main/DATA-LICENSE.md ## Why it matters Tan Kiat How frames AI as a tool to make staff more capable, not a way to cut headcount. He also states that Singapore competes on adoption, not on frontier models. This is a clear official signal on how companies should adopt AI. ## Summary Tan Kiat How argues that companies should not use AI merely as a cost-cutting measure. ## Full text © CNA — reproduced for reference only. I look at it uh not just as a policy maker but also someone who's now very uh actively involved in trying to integrate technology like AI into uh healthcare mo because it's the other ministry that I'm with and mo you know there's um any health system there are many uh care providers in the health system from doctors to clinicians to nurses to many many frontline officers and staff and they know the problems, they know the issues and more importantly that relationship between a patient and a health system is not through a technology, not through a screen. It is through a person. Same thing for your business. Many times your customers, especially those who have been with you for many years, that relationship is not through just a click and a prompt and a screen. is with you your business and the front and face of that business is your stuff. So I encourage all of us to think about AI technology in a very different way as AI intelligence becomes much more accessible, much more capable, much more pervasive. It it is getting more pervasive. You have so many different AI models. You have many uh very great technology partners like Microsoft here today. You have many partners that with them providing different solutions that addresses different pain points organizations that intelligence group will only get more capable more accessible more extensively used in organization and in our economies. So if you have that mindset that intelligence will be much more extensively used that the next question where are the bottlenecks of the future? Why is it important? Because bottlenecks are where economic value occurr. If you can solve that bottleneck for yourself, for your customers or for a certain industry section segment, that is where people are willing to pay money for. That's where commercialization and monetization efforts pay fruit. So what become more valuable if it's not intelligence? And it must be quite clear that in Singapore, we are not in the intelligence race. We not going to develop the best frontier models. We are not going to develop every advanced chip in the world. But we are really in the adoption phase. But there is so much opportunities in adoption. Think about every sector in the world from financial services to banking to hospitality, manufacturing and many of the sectors which you are in. Those industry sectors, value chains, supply chain, ecosystem has been developed and built on many earlier assumption of how the world works and how technology is deployed. AI will transform it and for those who are the forefront of adopting AI sensibly will be among the first to reap the benefits. But to reap the benefits is not having better intelligence deployed in your organization or in a sector. is about understanding where the bottlenecks are and how to solve those problems. And to understand those bottlenecks whether industry segment or your company requires people who understand the business, understand the domain, understand your customers, understand your pain points and industry pain points and these are your stuff with many decades, many years of experience. So as the intelligence gets more accessible and pervasive the context, expertise, judgment, knowledge and sometimes instincts become much more valuable. So I always encourage companies when you think about technology adopting it. Don't think about just cutting cost and reducing manpower. I can save two manpower here, I can save one person there. Think about it this way. You are actually hobbling your your future growth by cutting people and reducing the reliance on context. Use AI to make your people more capable, able to understand your customers better, able to respond faster, able to seize opportunities faster. And that I would say is the most important opportunity lying ahead of Singapore and all of you. Think of it as a trampoline. Think of it as a trampoline. Over the years, you've been, you know, when you jump on, someone showing me her son who's on a trampoline jumping up and down, right? He's he's a he's a he's a national competitor by the athlete, by the way. The first few bounds always give you the momentum to jump higher and think of it that was your early foundation of digitalization. You spend years putting in place the right digital foundations from data to processes to workflow optimization to training your people, your staff. Those are the first few bounds. The next bounce to really jump high is really using AI to power your next jump to reach greater heights and to reach those greater heights in your business in your industry to seize new opportunities. What you need is not just technology the AI to give you the bounce but the people that you power your organization and that's context judgment expertise. So think about AI use is not just reducing cost letting go of people by saving one or two heads here and there. Those are short-term gains. The longer term game facing all of you now is really how to use this opportunity when AI is still in nent stage. Notwithstanding is rapid development over last few years we are still a very nent stage his power to transform disrupt to create new industries and that new opportunity requires you to jump higher reach new heights requires you to bring your people along.