KUALA LUMPUR, Dec 13 — Malaysia has experienced a transformative shift in its technology (tech) landscape this year marked by historic investments, visionary initiatives, and forward-thinking policies that are reshaping the nation’s digital and tech ecosystem.
Malaysia has emerged as a regional leader in the digital economy, attracting global attention and reaffirming investor confidence in its potential.
In a landmark year, global technology powerhouses including Amazon Web Services (AWS), Google, and Microsoft committed or expanded investments amounting to a staggering US$16.9 billion (RM74.80 billion), further cementing Malaysia’s position as a prime destination for tech-driven growth.
Unprecedented Investments in Malaysia’s Tech Ecosystem
AWS has announced its commitment of US$6.2 billion (RM29.2 billion) to establish the AWS Asia Pacific (Malaysia) Region as part of its long-term commitment until 2038.
This investment is expected to contribute US$12.1 billion (RM57.3 billion) to Malaysia’s gross domestic product (GDP) by 2038 and create 3,500 full-time jobs annually.
This follows several other investments announced since December 2023 by global tech leaders such as Nvidia, Google, Microsoft, Infineon and many more.
Among others, Microsoft announced an investment of US$2.2 billion (RM10.5 billion) in the country’s cloud and artificial intelligence (AI) segment over the next four years.
Its chief executive officer Satya Nadella said Malaysia is a rapidly growing market on GitHub, the Microsoft-owned software development, collaboration and innovation platform, with almost 680,000 of the nation’s developers using GitHub in 2023, representing 28 per cent year-on-year growth.
Four weeks after Microsoft announced its investment in Malaysia, the tech giant Google is also set to invest US$2 billion (RM9.4 billion), including the development of its first Google data centre and Google Cloud region to meet the growing demand for cloud services locally and around the world, and Al literacy programmes for students and educators.
Its investment is estimated to support more than US$3.2 billion (RM15.04 billion) in positive economic impact and 26,500 jobs by 2030, with the data centre powering its popular digital services, such as Search, Maps, and Workspace, which are used daily by billions of people and organisations worldwide, including in Malaysia.
Additionally, the United States-based Enovix Corporation, which inaugurated its first high-volume battery manufacturing facility (Fab2) in Malaysia on Aug 8, plans to invest a total of US$1.2 billion (RM5.8 billion) in Malaysia over the next 15 years.
Collectively, proposed investments from US tech firms, including Google, AWS, Microsoft, and Enovix Corp, amounted to US$14.7 billion (RM63.02 billion).
At the recent APEC CEO Summit in Peru, Google and Microsoft commended Malaysia’s efforts in developing its AI infrastructure and roadmap.
Google vice-president of government affairs and public policy Karan Bhatia highlighted that Malaysia’s strategic approach to AI infrastructure was a key factor behind Google’s decision to invest in a data centre in the country.
Similarly, Microsoft vice-president of data and AI Zia Mansoor lauded Malaysia’s progress, particularly in creating the national artificial intelligence roadmap.
Record-breaking Digital Investment Milestones
Malaysia’s digital economy is poised to reach US$31 billion (RM138.4 billion) in gross merchandise value in 2024, an increase of 16 per cent from 2023.
In the first half of 2024, the Malaysia Digital initiative, led by the Malaysia Digital Economy Corporation (MDEC), achieved unprecedented success.
Approved digital investments reached RM66.22 billion, surpassing the total recorded in the financial year of 2023, created 25,498 high-skilled jobs and generated RM1.94 billion in export opportunities, representing a 43 per cent increase from the previous year.
As for digital export, as of June 2024, MDEC’s partnerships and business matching programmes have garnered export opportunities worth more than RM1.94 billion, involving 228 companies in 11 countries.
This is an increase of over 43 per cent from the export opportunities value for the first half of 2023 (RM1.35 billion).
Major Frameworks Developments
On Jan 2, the government launched the Central Database Hub (PADU) as a part of the effort towards “govtech” (government tech) via the provision of a safe, comprehensive, and “near real-time” national main database, allowing the production of more accurate data analytics.
Meanwhile, on May 28, Prime Minister Datuk Seri Anwar Ibrahim unveiled the National Semiconductor Strategy to realise the country’s aspiration to become a major global player in technology powered by the semiconductor industry.
Under the strategy, Malaysia is set to woo at least RM500 billion of investments during the plan’s first phase.
In addition, the National Cloud Policy is expected to fuel economic expansion by enabling businesses, strengthening user trust and data security, and empowering citizens through digital inclusivity.
The government also aims to position Malaysia as a hub for generative AI.
Thus, AI and investments from tech partners will be critical in building a robust and secure digital infrastructure.
Looking ahead, the Madani government has proposed an allocation of RM10 million for the National AI Office and an increase in research and development funding to RM600 million under Budget 2025.
Additionally, RM50 million has been earmarked to enhance AI-related education at research universities, while RM20 million will go to Universiti Teknologi Mara to train more electrical and electronics engineers.
These initiatives underscore the government’s commitment to strengthening participation in critical growth sectors like the semiconductor sector.
With Malaysia continuing to attract significant investments, the Ministry of Digital remains confident that the digital economy will achieve, or even surpass, its target of contributing 25.5 per cent to Malaysia’s GDP by the end of 2025. — Bernama
