AI Is Commoditising Software — So Singapore VCs Are Chasing Deep Tech
Source: The Business Times
There is an irony forming in Singapore's startup funding scene: the same AI wave that is minting software fortunes is pushing investors toward companies that have little to do with software at all. More venture capital firms are expanding into deep tech — quantum computing, frontier AI, advanced materials —...
There is an irony forming in Singapore's startup funding scene: the same AI wave that is minting software fortunes is pushing investors toward companies that have little to do with software at all. More venture capital firms are expanding into deep tech — quantum computing, frontier AI, advanced materials — precisely because AI is commoditising ordinary software development and eroding the moats that once protected run-of-the-mill startups.
The Business Times reports that investors are now hunting for startups with stronger technological barriers to entry, just as the Singapore government ramps up support for the sector. Deep tech, in this framing, covers advanced technologies that derive their competitive advantage from scientific or engineering breakthroughs — quantum technology and frontier AI rather than another wrapper around an existing model.
The logic is straightforward. If AI lets a two-person team ship a competent application, software defensibility collapses toward zero, and durable value migrates to companies with hard-to-replicate science: proprietary chip designs, novel materials, frontier model research, quantum hardware. Singapore's ecosystem has been quietly assembling the pieces — SGInnovate as the government's deep tech investment arm, university spinouts from NUS and NTU, and a growing number of funds building specialist teams to diligence science-heavy deals.
Hurdles remain, and the report is candid about them. Deep tech is capital-intensive, slow to mature and difficult to diligence; exits take longer; and the pool of founders with the right scientific depth is thin. For generalist VCs accustomed to software metrics, the shift demands new skills and longer holding periods.
Why it matters for Singapore: This pivot aligns with where the country has been steering its bets anyway — neutral-hub positioning for frontier technology, from quantum research to AI safety and semiconductors. If the deep tech turn sticks, Singapore's startup scene could look very different in five years: fewer copycat apps, more science-heavy companies with genuinely defensible positions, and a funding ecosystem that rewards technical depth over growth hacking.
