Malaysia has intensified its efforts to boost artificial intelligence (AI) growth in the country.
Its Prime Minister Anwar Ibrahim said in a speech during the Budget 2026 that the nation will continue to prioritize the field of AI and innovation activities, as the nation’s future rests on its ability to master the AI field.
“Moving towards AI Nation status by 2030, Malaysia will continue to spearhead the field of AI and nurture research, development, commercialization and innovation (R&D&C&I) activities,” he said.
According to him, the allocation for cross-ministerial R&D&C&I activities will be nearly MYR 5.9 billion ($1.4 billlion).
Meanwhile, the National AI Office (NAIO) agency will receive almost MYR 20 million ($4.73 million) to develop high-skilled talent, strengthen digital infrastructure and create an efficient AI ecosystem.
The government also proposes AI Training certified by NAIO qualifies for an additional tax deduction of 50 percent for small and medium-sized enterprises (SMEs) on expenditure related to AI and cyber security training endorsed by the MyMahir National Council for Industry (NAICI) and jointly led by TalentCorp and MyDigital.
Anwar also highlighted that sovereign AI Cloud will be established by Malaysian Communications and Multimedia Commission (MCMC) with an investment of MRY 2 billion ($470 million).
MCMC will establish an AI Transformation Center in collaboration with MMU and the Center of Excellence in Ethics for Emerging Technologies as a culture-centric AI and R&D center.
Meanwhile, a total of MYR 53 million ($12.55 million) will be provided for Malaysia Digital Acceleration Grant to accelerate the growth and adoption of technologies such as blockchain, AI and quantum computing.
Malaysian Institute of Microelectronic Systems （MIMOS） will develop blockchain technology and deepfake detection.
To nurture science, technology and creativity among youth, MYR 15 million （$3.55 million） will be allocated for programs such as the Malaysia Techlympics, National Science Week, Rehlah Sains and Science on Wheels.
“Under the MADANI administration, the importance of AI is repeatedly emphasized, and we have already achieved several milestones on this end,” Anwar noted.
In empowering AI, Malaysia has established the NAIO and the nation’s first faculty of AI at Universiti Teknologi Malaysia (UTM).
Meanwhile, research universities will continue to explore AI in critical disciplines such as semiconductor, medicine, cryptology.
It is noted that Intelek Luhur Malaysia Untukmu (ILMU) was launched as the nation’s first AI Language Model, as a result of the collaboration between UM and YTL AI Labs.
“We have also secured investments in the fields of AI and data centers from global technology giants such as Microsoft, Google and Amazon Web Service (AWS),” Anwar highlighted.
According to him, a total of $2.2 billion was invested by Microsoft to develop the Western Malaysia Cloud Region, and a total of $2 billion was invested by Google to build a data center and a new Google Cloud region in Selangor.
Microsoft is training 800 thousand Malaysians through the AI for Malaysia’s Future program and establishing the Microsoft National AI Innovation Center.
Google is also conducting AI@Work 2.0 for civil servants.
AWS, on the other hand, is supporting SMEs’ digitalization through machine learning and big data analytics.