Empowering AI Development

Budget 2026 places artificial intelligence (AI) as a national priority under the MADANI framework, recognising its role in shaping the country’s future. The government will enhance the National Artificial Intelligence Office (NAIO) and the first AI Faculty at Universiti Teknologi Malaysia (UTM).

Key universities will also continue to advance AI critical fields:

• semiconductors (USM),
• medicine (UM)
• cryptology (UPM)
• broader applications (MMU)

Driving local innovation and global investment

Malaysia has also introduced ILMU, the country’s first Bahasa Malaysia AI language model, developed by UM and YTL AI Labs.

The country also secured major AI and data centre investments as well as trainings:

• Microsoft: USD 2.2 billion for West Malaysia Cloud Region, training 800,000 Malaysians, and launching a National AI Innovation Centre.
• Google: USD 2 billion for a data centre and Cloud Region in Selangor; running AI@Work 2.0 for public servants.
• AWS: Supporting SME digitalisation through machine learning and big data analytics.

These efforts aim to position Malaysia as a regional leader in AI and digital innovation.

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