Scaling up the artificial intelligence value chain
Artificial intelligence (AI) is set to become the next major driver of Malaysia's digital economy as the country shifts its focus from building infrastructure to creating higher-value technology ...
Source: RSS · July 31, 2026 at 3:02 AM · AI-assisted report
KUALA LUMPUR, 31 JULY 2026 —
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Malaysia is poised to leverage artificial intelligence (AI) as a key driver of its digital economy, shifting focus from infrastructure development to creating higher-value technology ecosystems. The National AI Action Plan 2026-2030, also known as AI Nation 2030, is expected to play a crucial role in connecting the country's existing strengths in semiconductors, data centres, and energy infrastructure with the missing layers of the AI value chain.
Market Impact
The AI Nation 2030 plan aims to strengthen higher-value segments of the AI stack, including computing accessibility, sovereign and localised models, governed datasets, and commercially scalable applications. This initiative is designed to deepen domestic participation in the AI value chain by expanding access to computing resources, developing governed national datasets, and supporting local AI models and applications. The plan's objectives include integrating AI across the economy and public administration, with targets of placing Malaysia among the world's top 10 countries in the Global AI Index by 2030, generating an additional 1.2 percentage points of gross domestic product growth from AI, and creating 300,000 AI-related jobs.
The implementation of AI Nation 2030 is expected to have a significant impact on various sectors in Malaysia, including utilities, construction, and property. The utilities sector, in particular, is seen as a key beneficiary, with Tenaga Nasional Bhd expected to benefit from rising electricity demand, grid upgrades, and new data centre connections. YTL Power International Bhd is also expected to gain from its expanding Green Data Centre Park, renewable energy assets, and partnership with Nvidia. The construction sector is expected to benefit from new data centre contracts, with Sunway Construction Group Bhd and IJM Corp Bhd seen as immediate beneficiaries. Meanwhile, Gamuda Bhd is expected to gain from its investments in renewable energy, battery energy storage systems, and cloud computing services.
The property and real estate investment trust (REIT) sectors are also expected to benefit from the growth of the AI industry in Malaysia. Developers with sizeable industrial landbanks and access to power infrastructure, such as IOI Properties Group Bhd, S P Setia Bhd, and EcoWorld Development Group Bhd, are expected to benefit from rising industrial land values. Among REITs, Axis-REIT is seen as the strongest positioned industrial-focused vehicle, while diversified trusts with industrial assets could also participate as future data centre owners. The brokerage firm MBSB Research has adopted a selective stance on the property and REIT sectors, favouring companies with exposure to the AI ecosystem.
The AI Nation 2030 plan is expected to have a positive impact on the Malaysian economy, with the potential to generate significant revenue and create new job opportunities. However, the success of the plan will depend on the ability of businesses to invest, innovate, and scale. As one analyst noted, while AI policy alone does not create economic value, the new framework helps encourage businesses to invest, innovate, and scale. The real test for Malaysia will be how effectively it translates ambitious national goals into commercial opportunities that strengthen competitiveness, attract higher-quality investments, and foster a sustainable digital economy.
Looking ahead, the outlook for Malaysia's AI industry is positive, with significant growth potential in the coming years. The AI Nation 2030 plan provides a clear roadmap for the development of the AI ecosystem in Malaysia, and the government's commitment to investing in AI infrastructure and talent development is expected to pay off in the long term. As the country continues to shift its focus from infrastructure development to creating higher-value technology ecosystems, it is likely that Malaysia will become a major player in the regional AI industry, with significant opportunities for businesses, investors, and individuals alike. Details not yet available on the specific timelines and funding allocations for the AI Nation 2030 plan, but the government's commitment to the initiative is expected to drive growth and investment in the sector.
Related: Tenaga Nasional