The Productivity Solutions Grant (PSG) is one of the most direct ways Singapore SMEs can offset the cost of adopting AI tools — but the details matter more than the headline figure. The grant percentage, eligible solutions, and qualifying criteria have all changed since the programme launched, and articles written two years ago may be describing rules that no longer apply.
This is a factual overview of how PSG works for AI tools as of mid-2026. For the most current percentages and the live list of approved solutions, always verify directly on the Enterprise Singapore website before making any procurement or funding decision.
What PSG Covers for AI Tools
PSG subsidises a portion of the qualifying costs when an SME adopts a pre-approved IT or digital solution — which now includes a significant number of AI-enabled tools. The grant covers software subscription or licensing costs and, in some cases, implementation fees charged by the approved vendor.
It does not cover internal staff time, training costs the business arranges independently, or hardware that isn’t bundled with the approved solution. It also does not cover AI tools that are not on the pre-approved list — including most general-purpose AI subscriptions like standard commercial plans for large language model tools.
The support level has varied over time. As of 2026, eligible SMEs can claim support on qualifying costs within the cap set for each pre-approved solution. The exact percentage and cap amount are listed per solution on the Enterprise Singapore portal. Do not rely on any figure you read in a third-party article, including this one — the numbers change and the portal is the only authoritative source.
How the Pre-Approved List Works
PSG-eligible AI solutions are assessed and approved in advance by IMDA or Enterprise Singapore. The assessment looks at the vendor’s track record, solution functionality, data security practices, and deployment support. An SME does not need to do this assessment itself — the pre-approval is the signal that the vendor has cleared the baseline criteria.
Solutions on the list are organised by business function: customer management, HR, finance and accounting, operations, e-commerce, data analytics, and AI-specific categories. The AI-enabled solutions span customer chatbots, document automation, predictive analytics, and AI-assisted marketing tools, among others.
Not every AI tool category is well-represented. If the specific function you want to automate doesn’t have a pre-approved solution that matches your business type, PSG will not fund it — at least not in its current form. The GenAI Sandbox programme (covered in a separate article) offers a different route for trialling tools that may not yet have pre-approved status.
Eligibility: What Qualifies as an SME for PSG
To be eligible for PSG, the business must:
- Be registered or incorporated in Singapore
- Have at least 30% local shareholding
- Have an annual turnover of no more than S$100 million, or no more than 200 employees
- Be using the solution for Singapore-based business activities
Sole proprietorships and partnerships are eligible. Newly incorporated businesses are generally eligible from the start, though some solutions may require the business to have been operating for a minimum period.
How to Apply
The application process runs through the Business Grants Portal (BGP) at businessgrants.gov.sg. The steps are:
- Choose a pre-approved vendor and solution from the PSG list on the Enterprise Singapore website
- Get a quotation from the vendor
- Log in to the Business Grants Portal using Singpass and submit an application before purchasing
- Wait for approval before committing to the purchase — costs incurred before approval are typically not claimable
- After approval, proceed with the vendor and submit a claim with proof of payment
The timing is important. Many SMEs have lost grant eligibility by purchasing the software before their application was approved. The portal application must come first.
Common Mistakes
Choosing a vendor that isn’t on the PSG list. Not all AI tools are eligible. Confirm the specific vendor and solution code before engaging.
Applying after purchase. PSG is not a reimbursement for past spending. It requires prior approval.
Misreading the grant cap. Each solution has a maximum qualifying cost. If the vendor’s fee exceeds that cap, the grant only applies to the capped amount. The remaining cost comes out of the business’s own pocket.
Assuming the grant covers everything. PSG covers a percentage of qualifying costs, not the full amount. Budget for the co-payment.
Is It Worth the Effort?
For solutions where PSG applies, the answer is almost always yes. The grant offsets a meaningful portion of the implementation cost, and the application process — while bureaucratic — is not especially complex for most businesses. The main cost is time: researching eligible solutions, preparing the application, and managing the claim.
The risk of using PSG to drive your AI tool selection is that it narrows your options to what’s on the pre-approved list, which may not include the best solution for your specific situation. Treat PSG as a financial filter you apply once you’ve identified what you actually need — not as the starting point for deciding what AI to adopt.
Sources: Enterprise Singapore PSG programme page (enterprisesg.gov.sg); IMDA Pre-Approval ICM Vendor Guide (preapproval-guide.imda.gov.sg); Business Grants Portal guidance notes. All figures and eligibility criteria should be verified at source before making grant applications.
If you’re still deciding which AI function to prioritise, the AI Tool Decision Framework article covers how to identify the highest-value starting point for your business. The IMDA GenAI Sandbox guide explains the pre-approved solutions programme in more detail.