This article first appeared in Forum, The Edge Malaysia Weekly on August 17, 2026 – August 23, 2026
In July last year, Prime Minister Datuk Seri Anwar Ibrahim announced plans to position Malaysia as an artificial intelligence (AI) nation within five years. One year later, on July 29, he unveiled the National AI Action Plan 2026-2030, which is the implementation framework to transform ideals into reality, making Malaysia an AI nation by 2030.
On the same day, South Korea’s stock market crashed, dragged down by techno giants, in a meltdown linked to a fading AI tech boom, but let’s hold our horses on this for now and get back to the topic at hand, namely, making Malaysia an AI nation.
To begin with, AI is often framed as an objective tool for improving efficiency and decision-making. Yet scholars, such as Kate Crawford, argue that far from being so, AI systems reflect the assumptions and institutional priorities that shape them, fortifying existing systems of power and inequality.
At the philosophical level, Martin Heidegger calls the utter availability and sheer manipulability of technology as the means in which humanity would be reduced to a stockpile of technological purposes. At the onset of transformation, AI can reconfigure how decisions are made, how policies are formed and how societies function.
Like Odysseus, we are caught between Scylla and Charybdis. Yet a future eluding AI may be a Sisyphean venture. By choice or by virtue, AI will be incorporated in systems to increase efficiency, strengthen data-driven options and be the impetus for Malaysia’s industrial growth.
More than a decade ago when I first wrote about the Fourth Industrial Revolution, AI was featured as a significant but only one of the many drivers of a 21st century paradigm shift in technological advancement. Today, it is the primary driver, and some say even the be-all and end-all of mankind’s technology venture. Domestically, AI activities could strengthen the country’s manufacturing sectors, especially for productivity, emerging new sectors and digitalisation that builds Malaysia’s own AI consumption. Growth propelled by investments in AI infrastructure, customisation of chips, modernisation of smart factories and a knowledge economy could tap into a global market potentially valued at US$3 trillion by 2034.
That’s the theory. For lo and behold, the good AI giveth and the good AI taketh away, with South Korea being given the taste of the riches promised by AI just to have them snatched away in the market mayhem. That meltdown saw the prices of Samsung and SK Hynix tumbling, wiping off US$1.2 trillion (RM4.9 trillion) from the market. Accounting for nearly half the Kospi, these giants have been making huge profits because AI companies desperately need chips. But with increasing competition from Chinese companies, customers may cancel orders and new supply could flood the market, causing prices to nose dive. The market is pricing in this externality, thus triggering the spectacular crash.
We need to be extra vigilant of these market vagaries because Malaysia’s AI and data centre boom is almost totally driven by American tech hyperscalers that have poured in hundreds of millions and committed tens of billions of dollars more to build the digital infrastructure underpinning this growth. While it is true that US foreign direct investment accounts for only 10.3% of the cumulative national total, these American tech giants constitute the primary catalyst for our tech expansion.
They also face an existential threat from Chinese open-source models. Further, lease agreements for data centres may unravel in a market collapse, laying bare the piles of debt tied to big tech, such as Meta, Microsoft and Google. Nvidia too is not exactly immune from these threats even though it has emerged relatively unscathed from the recent Nasdaq sell-off despite its recent announcement of a “US$500 billion” partnership with SK Hynix.
Regardless, where the light is brightest, the shadows are deepest. Light may find it difficult to pierce the darkness of the black boxes whose algorithms form decisions. High-impact AI in critical sectors could alter lives while jobs are hollowed out with its increasing adoption. That is the elephant in the room that we ignore at our peril. For Malaysia, we could be cautiously optimistic considering that RM87.4 billion in approved digital investments was recorded for 2025, driven largely by growth in AI, big data, data centres and cloud services. According to the Malaysia Digital Economy Corporation (MDEC), these investments are expected to generate more than 31,000 high-value jobs, reinforcing Malaysia’s position as a leading digital investment destination in Asean.
So, why the tip-toeing here? Interactions would change as humanity turns to AI for assurances, be it social interactions, career advice or financial decisions. With economic growth as a promise, the question is not whether the country can simply adopt AI, but whether it can do so in a way that is both accountable and equitable.
Malaysia’s adoption of technology must transcend the banality of mere material advancement and serve a higher societal purpose. It must address the challenges of an ageing nation, climate crisis and stagnating wages amid rising costs of living, and wealth and other inequities.
Yet, here’s the catch: For the developing nation, innovation is slow and demands resources beyond existing means. In medicine, for instance, it takes eight to 10 years of clinical development before a drug hits the market with research and development investment running in the millions annually. So, why wait till the next generation to reap the harvest, when we can do it in the present? Not to mention that systemic challenges, such as closed circuits, could preserve technological gaps and leave Malaysia subservient to the select few who develop technology.
In light of this, the country aspires to carve a future that could reap the benefits of AI without being consumed by techno-feudalism or systemic challenges endemic to the AI landscape. While the 2030 agenda seeks to integrate AI to improve daily life, enhance public services and provide economic opportunities, yet, how can we ensure that the current generation experiences the benefits without being sacrificed on the altar of technological upheaval?
AI’s innovation and research should be incentivised to meet national needs. Already public universities were directed to build AI faculties in humanities and ethics, semiconductors and healthcare. As the nation’s largest service provider, successful transformations in the public sector would be the swiftest strategy to ensure that AI contributes positively nationwide.
Despite years of digital advancement, the age of interoperability and trusted architecture has not dawned for us yet, thanks to uneven adoption of open-source software and a “secrecy by default” culture. Caught between sovereignty and trust, the knee-jerk reaction is to resort to “the most minimal risk” playbook: don’t share the information.
Critically, Malaysia lacks clear redress mechanisms for AI-assisted decisions, leaving uncertainty around how individuals can challenge outcomes or seek accountability, undermining procedural fairness and public trust. Meanwhile, the public consultation period for the AI Governance Bill has just ended with the legislative passage being targeted for year end. But whether such an oversight mechanism applies to government is yet to be seen.
All told, the true success of Malaysia’s AI project is dependent on inculcating good governance practices, dispensing social justice and fostering a harmonious nation. This multipronged approach must result in greater accessibility of technology to the people, the narrowing of the digital gap between urban and rural communities and the rich and the poor and, above all, ensuring the preservation of our data sovereignty.
