by Tan Aik Keong (AK)
Representing more than 50 AI-focused companies, Konsortium AI Negara (KAIN) welcomes the Madani Government's move to integrate and expand AI technology adoption — a shift reflected in the National Investment Master Plan (NIMP). KAIN recognises the AI-related measures the Prime Minister introduced in Budget 2025, which brings in considerably more AI-related initiatives than Budget 2024 did.
KAIN believes local AI capability development should be guided by technology sovereignty, and needs to account for several key factors: data collection, compute capacity, algorithm development, talent development, and technology deployment. From what Budget 2025 has laid out, the emphasis clearly sits on talent development and compute capacity, particularly through partnerships with global technology providers.
Data collection
Data collection is a critical part of building local AI systems. Key datasets — GIS data, rainfall patterns, and local languages and dialects (particularly those from Sabah and Sarawak) — need to be collected and preserved for use in the AI era.
Compute capacity
Sufficient compute capacity is essential for processing the large data volumes needed to build AI models. Malaysia currently relies heavily on AI cloud services from major international providers. To optimise resources, Malaysian universities should be equipped with adequate compute capacity for their own model development and research.
Algorithm development
KAIN supports government's effort to establish the National AI Office (NAIO) and lead the ASEAN AI Safety Network, driving AI adoption through collaboration with academia and regional industry. Ethical AI implementation is essential, to make sure society captures the benefit while minimising potential harm.
The RM600 million R&D fund managed jointly by the Ministry of Higher Education (MOHE) and the Ministry of Science, Technology and Innovation (MOSTI) should be directed toward AI development and data collection, and funding from the Malaysian Scientific Endowment (MSE) can further support this R&D work.
Talent development
This year, government allocated RM20 million to Universiti Teknologi Malaysia's (UTM) AI faculty. Next year, RM50 million will go to Universiti Malaya (UM), Universiti Putra Malaysia (UPM), Universiti Sains Malaysia (USM) and Universiti Kebangsaan Malaysia (UKM) to develop AI in healthcare, quantum computing, semiconductors and language research.
KAIN members also sit on industry advisory boards at several public and private universities, jointly developing AI-related curricula. KAIN has noted a significant rise in student enrolment in AI-related programmes, though funding increases haven't fully kept pace with what's needed for progress at scale.
KAIN also believes students pursuing AI and STEM-related programmes should complete five core mathematics courses: calculus, multivariable calculus, linear algebra, discrete mathematics and probability theory. The Ministry of Education and Ministry of Higher Education need to work together to ensure students from different educational pathways — matriculation, STPM or foundation programmes — are equally well prepared; otherwise, capability gaps between them will only become more pronounced once they move into AI development and algorithm work.
Deploying technology across the economy
Beyond talent development and research, government should also expand tax incentives to encourage local businesses to adopt services provided by local AI companies — helping cultivate a strong local AI ecosystem. KAIN believes these measures will accelerate Malaysia's AI capability development, ensuring the country can capture AI's potential benefits for its economy and society while building genuine technology sovereignty.
Closing
KAIN appreciates government's active efforts to advance AI development through strategic investment and policy frameworks. But achieving genuine technology sovereignty and a sustainable AI ecosystem will require a more comprehensive approach from Malaysia — balancing talent development, local data governance, compute capacity, and policy support for local businesses. By strengthening collaboration between industry, academia and government, and ensuring fair educational standards across the board, Malaysia can take a leadership position in AI regionally. KAIN remains committed to supporting these efforts, and to working with all stakeholders to help the country thrive in the AI era.
Part of the AK AI Corner column. Originally published in Oriental Daily (东方日报) on Oct 19, 2024.