September 25, 2025
Technology
Malaysia is stepping up its role in the global tech race, with bold moves in artificial intelligence, data centers, and semiconductor design. Recent initiatives highlight the country’s ambition to shift from a technology adopter to a technology creator.
Malaysia Tech Push: From Adopter to Creator
KUALA LUMPUR, September 25, 2025 — Malaysia is fast-tracking its digital transformation, positioning itself at the heart of Asia’s next wave of innovation. The government and private sector are aligning strategies to build a stronger ecosystem in AI, chip design, and next-generation data centers.
Data Centers on the Rise
Johor has emerged as one of the fastest-growing data center hubs in Southeast Asia, nearly doubling capacity to 5.8 GW in the past year with vacancy rates as low as 1.1%. Government policies have streamlined land and power approvals, fueling rapid expansion. At the same time, regulators are tightening project requirements to ensure sustainability in power, water, and environmental management.
Chip Design Autonomy with Arm
In a strategic move, Malaysia announced a USD 250 million agreement with Arm Holdings to acquire advanced chip design blueprints. The deal includes access to seven high-end design IPs and training for 10,000 engineers. Officials emphasize the goal is to nurture billion-dollar homegrown chip firms and transition Malaysia from a chip assembly hub to a design-driven nation.
Building Talent for AI
Huawei has pledged to train 30,000 AI and IT specialists in Malaysia over the next three years, covering students, government staff, and industry leaders. This complements the national digital roadmap and strengthens the local talent pipeline for sustainable tech growth.
Massive Investment Ahead
Research from Robert Walters projects Malaysia could attract over USD 40 billion in AI and data center investments by 2030. Beyond hyperscale facilities, demand will surge in cybersecurity, data analytics, and cloud infrastructure. The 2026 national budget is expected to prioritize tech-led growth, with AI and automation as key pillars.
Challenges and Opportunities
While prospects are strong, Malaysia faces challenges in infrastructure capacity, export regulations, and R&D depth. Recent restrictions on AI chip flows underline the importance of compliance with international trade rules. Still, the trajectory is clear: Malaysia is positioning itself as a regional leader in high-value technology creation.