Foundations for Malaysia’s Smarter, AI-Powered Economy

Malaysia is actively building up its strength for the era of the AI (Artificial Intelligence) centered economy through progress in infrastructure, human resources development, and specific initiatives.

The country is waking up to the power of AI, forecasting that AI will add some US$115 billion (RM530 billion) to the economy in the next half decade.

At its heart is the creation of a powerful digital base. Microsoft will create its first data center region in Malaysia with the Malaysia West cloud region, which is expected to be available in the second quarter of 2025. The multi-billion dollar investment brings the advanced hyperscale computing required to train, test and develop advanced AI technologies in multiple fields.

The introduction of secure cloud services, such as cloud with strong data residency and security in country, is predicted to boost the AI adoption among businesses in Malaysia as well as government organizations.

With a thriving AI ecosystem depending on a talented workforce, Malaysia is also focusing on developing its talent base. The AIForMYFuture is a joint initiative between Microsoft and the National AI Office (NAIO) to empower 800,000 Malaysians with digital and AI skills by the end of 2025.

This overall program is designed for different groups of people ranging from students to professionals and provides online learning, workshops and certification to ensure democratization of AI awareness and implementation.

The Malaysian government has made a push for the widespread adoption of AI within important industries like healthcare, education and agriculture, as part of the Ministry of Digital’s agenda. Efforts concentrate on incorporating AI technology to boost productivity, bring better services and generate new economic opportunities.

To make matters worse, the government is well aware of the potential job cuts associated with automation and is promoting reskilling schemes to adjust the workforce to the emerging requirements of the AI era.

Kuala Lumpur is rising as a hub of smart city with AI has become one of the important tool for the planning and management of the city. Breakthrough initiatives such as the Digital Twin – a virtual, real-time model of the city – and AI driven traffic management systems are being rolled out to streamline city functioning and ease congestion, enhancing safety along the way.

The imminent Smart City Expo Kuala Lumpur (SCEKL 2025) in September will further highlight Malaysia’s development and drive partnerships in intelligent city development.

As it builds these foundations, Malaysia is also placing an emphasis on ethical and responsible AI development. Whilst the National Artificial Intelligence Roadmap 2021-2025 and Artificial Intelligence Talent Roadmap 2024-2033, these new and updated technology roadmaps represent overall efforts to shape and sustain innovative and responsible AI ecosystem.

This includes formulating laws, teaching children from a young age about AI and enabling worker upskilling to ensure an inclusive and positive AI future for all Malaysians.