The widespread popularity of Artificial Intelligence (AI) has pushed the world into a frenzy to innovate and escalate technologies to keep up with mainstream demands. The use of AI to enhance cybersecurity has been one of the many lucrative and progressive steps taken to elevate a country’s digital economy. In this blog article, we focus on the heavy-handed steps taken by Malaysia to speedrun its AI investments and enter a new era of digital transformation. We also look at the state of cybersecurity in Malaysia and how AI can improve current structures and policies in place.
Across the world, countries are pushing to enhance technology infrastructure and provide faster, more efficient, and more affordable solutions. AI and other evolving technologies have helped tremendously in that facet – especially within Malaysia. The Southeast Asian country is now doubling down on its commitment to AI and cybersecurity to accelerate its digital economy. According to The Tech Capital, Malaysia’s digital economy is on track to contribute over 25.5% to the country’s GDP by the end of 2025 - a projection that comes amidst forecasts of global digital economy growth, with research firm Forrester predicting a value of US$ 16.5 trillion by 2028. Now, let’s take a closer look at Malaysia’s investment in AI and cybersecurity solutions.
The Government’s Investment in AI and Cybersecurity in Malaysia
Malaysia has always been a country at the forefront of digital transformation and now it is taking concrete steps to secure its position as a leader in the digital economy of Southeast Asia through strategic investments in AI and cybersecurity. As reported in CFO Tech Asia, Malaysia is now reaping the rewards of its governmental investment of RM 20 million under Budget 2024 into a national AI framework. The framework aims to drive AI research, development, and commercialization and is expected to create over 500,000 high-value digital jobs by 2030.
Georg Chmiel, the Executive Chairman of Chmiel Global Advisory, has noted that Malaysia's focus on these areas is contributing significantly to its economic growth and establishing the country as a regional tech hub. However, AI in Malaysia cannot grow without significant attention to the state of cybersecurity in the country. Chmiel highlights this point as well by saying that “with great digital growth comes great responsibility - and Malaysia is taking proactive measures to address this."
These measures can be seen in the RM 50 million allocation in the Budget 2025 for AI and cybersecurity research - which includes establishing the Malaysian Cryptology Technology and Management Centre through a partnership between Universiti Putra Malaysia and the National Cyber Security Agency. The other key Budget 2025 allocations according to Business Today included:
- RM1.5 billion for digital infrastructure, including 5G rollout and broadband expansion.
- RM200 million for upskilling initiatives focused on digital literacy and AI expertise.
- Tax incentives for companies investing in AI, cybersecurity, and green technology.
Chmiel further noted that the focus on cybersecurity in Malaysia isn’t just about protecting businesses and consumers but also centers around building confidence in the digital space. He goes on to state that these investments are also a huge draw for foreign investors. For example, Oracle's investment in a new cloud region in Malaysia shows international confidence in the country's digital infrastructure and talent pool.
Chmiel stated that Malaysia's journey toward digital transformation is “truly inspiring,” stating that by embracing AI and cybersecurity, the nation is enhancing its economic competitiveness and improving quality of life. Ultimately, the Malaysian government is looking to become a high-income, digital nation by 2030. His Majesty Sultan Ibrahim of Malaysia has also praised the government's initiatives to boost foreign investment in the digital and technology sectors. However, the government is not the only driving force behind the country’s rapid digital transformation.
Private Sector Investments in Cybersecurity and AI in Malaysia
Chmiel stated that Malaysia is at the forefront of the adoption of artificial intelligence in Southeast Asia and that AI is transforming industries and creating new possibilities - from healthcare and finance to manufacturing. Companies such as BrioHR.com and Juwai IQI are cited as examples that are leveraging AI in HR automation and real estate analytics, respectively.
The Malaysia Digital Economy Corporation (MDEC) also joined the conversation to state that the country’s proactive digital policies - particularly in AI and talent development - have collectively positioned Malaysia as a regional hub for digital excellence. MDEC CEO Anuar Fariz Fadzil, the MDEC CEO, noted that public-private collaborations further enhance our nation's leadership in AI and quantum computing - driving transformative impacts across sectors like manufacturing, finance, and services.
“MDEC is dedicated and committed to support Malaysia in achieving or surpassing the 25.5% digital economy contribution to GDP by year-end through initiatives that catalyze digital transformation, talent development and technology adoption across businesses,” assured Anuar. He went on to state that the organization’s goal is to “enhance SME competitiveness, continue attracting high-quality investments and develop a digitally skilled workforce ready for the future.”
He further highlighted that Foreign Direct Investments (FDIs) are a key driver of national growth - citing that Malaysia has attracted over RM86 billion in data center investments in 2024. This has established the country as Southeast Asia’s leading data center hub with 77 data centers throughout the country. “MDEC will continue to play our part in attracting marquee AI companies to establish operations in various states throughout Malaysia,” said Anuar. “We are also actively promoting Malaysian tech champions and supporting their expansion into foreign markets for export purposes.”
Now that we can understand the significant contributions and motivations behind heavy investments in AI and cybersecurity from both government and private entities in Malaysia, we can now turn our attention to the state of AI in Malaysia at the moment.
AI in Malaysia
According to Statista, the Artificial Intelligence market size in Malaysia is projected to reach US$ 1.06 billion in 2025 – with the market size expected to show an annual growth rate of 27.63% to result in a market volume of US$ 3.59 billion by 2030. Clearly, Malaysia is not taking the back seat when it comes to AI innovation – and the rest of the world knows it as well. In 2024, Microsoft said that it would invest US$ 2.2 billion over the next four years in Malaysia to expand cloud and AI services. This move came from the tech company's push to promote its generative AI technology in Asia. The investment – which is the largest in Microsoft's 32-year history in Malaysia - will include building cloud and AI infrastructure, creating AI-skilling opportunities for 200,000 people, and supporting the country's developers.
Other technological giants investing in Malaysia’s booming digital market include Nvidia, Alphabet unit Google, and China's ByteDance – who have all announced billions of dollars of digital investments in the country since 2023. These have been mostly in cloud services and data centers – which has powered an infrastructure boom driven by growing AI demands. However, the country is not only benefiting from external AI demands.
In 2024, Malaysia launched a national Artificial Intelligence office aimed at shaping policies and addressing regulatory issues. According to Reuters, the office is expected to serve as a centralized agency for AI - providing strategic planning, research and development as well as regulatory oversight. The office will pursue seven deliverables in its first year, including developing a code of ethics, an AI regulatory framework, and a five-year AI technology action plan until 2030. Prime Minister, Anwar Ibrahim, called it another historical moment in our digital transformation journey.
According to the New Straits Times, the AI sector could add about US$115 billion to Malaysia's gross domestic product by 2030 – impacting sectors such as healthcare, agriculture, manufacturing, and finance. The publication noted that the government should also lead by example — adopting AI-driven solutions in public services to create early demand and demonstrate the viability of emerging technologies.
In more current news, Reuters reported that Malaysia will pay Arm Holdings $250 million over 10 years to acquire the firm's chip design plans for local manufacturers. This comes as the country looks to produce its own graphics processing unit chips within the next decade amid the AI boom. Prime Minister, Anwar Ibrahim, said that the agreement with Arm will allow Malaysia to design, manufacture, test and assemble AI chips to be sold globally. The deal will also involve training 10,000 engineers in Malaysia and will hopefully allow domestic producers to scale up and create 10 local chip companies with a yearly revenue of up to US$ 2 billion each.
Economy Minister, Rafizi Ramli, stated that the country is looking to build a complete supply chain in advanced industries - such as AI data servers, autonomous vehicles, Internet of Things, robotics and more." However, Ramli assured that they would prioritize local players as the first resort for every part of the supply chain. Ultimately, AI in Malaysia seems to be a booming market with exponential potential. However, as mentioned before, AI innovation cannot be viewed without looking at the state of cybersecurity as well.
Cybersecurity in Malaysia
Cybersecurity should be a main concern for any country at the cusp of rapid digital transformation as this opportunity comes with its own set of risks. Last year, Tech Wire Asia reported that cyber threats are still a growing concern in the country – with phishing being the top cybersecurity concern of 54% of organizations and 50% of organizations experiencing a two-fold increase of ransomware attacks in 2023. However, not all hope is lost and the country is still doing its best to mitigate the threat of cyber-attacks and reinforce the need for cybersecurity across all sectors.
The US International Trade Administration reported that Malaysia had recorded 57.8 million virus attacks during the first quarter of 2022 - accounting for 1.1% of global cyber-attacks. However, the organization also stated that cybersecurity is one of the critical priorities across sectors in Malaysia and that the government is committed to ensuring a safe and secure cyberspace by enhancing the country’s cyber security capabilities on all fronts. To ensure this, the government launched the Malaysia Cyber Security Strategy (MCSS) 2020-2024 with an allocation of an equivalent of US$ 434 million to step up national cybersecurity preparedness and upgrade the country’s cybersecurity measures.
Additionally, Malaysia's Cyber Security Act 2024 came into effect on the 26th of August 2024 - establishing regulatory standards for the nation's cyber defenses and marking a significant step forward in resilience against cyber threats. Previously, Malaysia’s Finance Minister, Tengku Datuk Seri Zafrul Tengku Aziz, also made waves at the 2023 budget meeting by proposing the allocation of RM73 million towards Cyber Security Malaysia (CSM) in an attempt to strengthen the country's cybersecurity resilience.
While we can agree that the rapid shift to AI technologies requires a watchful eye on cybersecurity policies and practices, we should also understand the massive weight of leveraging AI itself within those robust cybersecurity measures.
The Use of AI in Cybersecurity
When it comes to the role of AI in cybersecurity, you need to look past the generative AI you more commonly find on the internet. AI has already been used widely in many cybersecurity platforms due to its automatic and resilient nature. With AI, organizations can significantly augment their threat detection capabilities and strengthen their security posture. Some of the more commonly adopted AI techniques in threat detection include Anomaly Detection, Natural Language Processing (NLP), Random Forests, and Graph Analysis.
AI can be a useful tool in the fight against cyber threats – effectively spotting anomalies in real-time to prevent intrusions or detecting patterns and instantly notifying IT teams. Your organization can also say goodbye to wasting valuable time on repetitive and mundane tasks with the use of automated AI power. Apart from convenience, this also ensures constant and reliable monitoring and protection of your network – reducing the risk of human error and promoting efficiency.
AI-powered solutions can also effectively protect endpoints, trigger alerts, or create baselines for acceptable behavior. They further allow you to curate and store a large knowledge base of cyber threats and intelligence to make better choices and constantly “learn” new ways to protect your network. Essentially, AI can be a critical defense system in your cybersecurity toolkit and more companies should rely on cybersecurity solutions that invest in AI. However, there is always a flipside to every opportunity in the digital domain. Let’s take a look at some of the main challenges and opportunities in this industry.
AI Cybersecurity Challenges and Opportunities
While AI can be a useful element to enhance cybersecurity, it can also be met with certain challenges along the way. According to Amy Rashina for E27, one of the challenges facing drastic transformation in Malaysia is the skills gap. This lack of expertise and know-how poses a significant challenge to both companies and individuals – despite the country’s fast-paced landscape. According to research, approximately 24% of Malaysians do not have access to adequate training opportunities to further their professions – a disparity that not only affects individuals but also stifles the nation’s overall economic progress. This is an unfortunate reality in a country desperately brimming with potential.
The Malaysian Reserve reported on an event in which Suresh Sanikaran Srinivasan, the Group Head of Cyber Security and Data Privacy at Axiata Group Berhad, stated that while AI brings immense benefits, it also opens “a Pandora’s box of cyber risks.” Suresh went on to say that AI has introduced new attack vectors - whether it’s deep fakes, desensitization of attacks, or other risks.
Suresh also expanded on the challenges of using AI in cybersecurity – exploring the risk of data authenticity. He noted that there is an element of misinformation and inaccuracy which leads to ethical concerns – signaling that the output that an AI program is generating will always be a “slightly questionable point.” This points to one of the most common issues with AI in the modern age – can it be trusted? While we can understand that a machine will do what it's asked without causing the collapse of society, it is crucial to question whether the platforms you choose for such critical cybersecurity tasks can be relied on.
“The moment you integrate AI with cyber security, you are touching a very sensitive and confidential space,” Suresh noted. He continued to ask, “Do you want to send your security events into OpenAI’s cloud or any other cloud provider and let it correlate there?” – highlighting the lack of control with AI technologies. He concluded by stating that no matter what disclaimer they give you - that nobody else will have access to that data - the fact remains that the data will still be out there.
Suresh also highlighted the high cost of AI technologies - where some models claim they can run on low-cost chipsets, but the big and more acceptable ones remain expensive. This might present a problem for small to medium-sized businesses looking to invest in AI-enabled cybersecurity options or simply invest in the AI industry itself. Malaysia may have a booming digital economy, but the regular citizens and business owners need to still make cost-effective investments at the end of the day.
However, ultimately Suresh also remained optimistic about future advancements - pointing to state-level considerations that influence AI adoption. These revolve mostly around transparency and confidentiality, where users need to decide how much intellectual property they wish to give out freely. At the same event, ASEAN Recorded Future Regional Sales director, Damian Bach, also noted - from a more positive standpoint - that AI enables organizations to act on vast amounts of data more efficiently and that the use of AI in cybersecurity is centered around being able to mitigate risks at the end of the day. Bach concluded that whether we focus on the positive or negative aspects of AI, users are now at an inflection point where education and awareness are key. This is a critical point to make when it comes to the use of AI in cybersecurity.
Now, while AI in Malaysia has had tremendous progress in amplifying cybersecurity, AI has revolutionized cybersecurity on a global scale – improving threat detection, malware mitigation, and recovery processes across industries. Sangfor Technologies has been implementing AI in several cybersecurity platforms for many years - providing innovative and intuitive solutions that keep data safe while offering impressive cyber threat resilience and intelligence. Let’s explore Sangfor’s capabilities by looking at some of the success stories from Malaysia in particular.
Sangfor Success Stories in Malaysia
Sangfor has become a global cybersecurity and IT infrastructure brand and has spent decades innovating and perfecting cybersecurity technologies. This includes the use of AI to enhance cybersecurity platforms. These are some of the Sangfor success stories to come out of its involvement in Malaysia:
Malaysian Government Department Success Story
A Malaysian government department suffered from limited in-house cybersecurity – requiring both the manpower and expertise to effectively secure its infrastructure. Sangfor suggested the use of the Cyber Guardian MDR service to provide 24/7 security assistance from skilled professionals as well as real-time monitoring and reports. Cyber Guardian was seamlessly deployed within the department and after robust asset recovery and proactive threat hunting, the Sangfor MDR service team uncovered several vulnerabilities – effectively mitigating them and providing service reports for greater context and analysis of detected events.
iPlanet Success Story
iPlanet is a systems integrator (SI) specializing in network infrastructure and security. After a client faced a ransomware attack in 2023, iPlanet turned to Sangfor for help with Incident Response services. After their positive experience, the company decided to collaborate with Sangfor to provide its Cyber Guardian MDR service to its clients. After comprehensive training from Sangfor and hands-on experience across several successful projects, iPlanet’s engineering team now independently manages all on-site services. Apart from securing 24/7 continuous monitoring, significant alert reduction, precise event escalation, rapid response capabilities, and convenient customer communication for their clients, this collaboration also proved to be the most cost-effective solution for the company. This is because Sangfor does not require its MDR partners to purchase or subscribe to its service platform.
Universiti Teknologi Malaysia (UTM) Success Story
The University of Technology Malaysia also took to using Sangfor’s services to improve infrastructure. The university used a Bring Your Own Device (BYOD) system with students and teachers and faced network access quality issues as a result. Sangfor’s Internet Access Gateway platform proved to be the ideal solution for the campus – offering URL filtering, traffic management, malware detection, traffic decryption, application control, and device onboarding. The deployment was seamless and did not disrupt the existing network structure while still providing detailed analytics and visibility. The platform also enabled UTM to manage and allocate bandwidth to different users based on application categories for elevated network quality.
These stories offer tangible proof of Sangfor’s benefits for organizations of every kind. Sangfor looks forward to collaborating with many more companies in Malaysia and around the world in the future – hoping to aid in the rapid race towards digital transformation while ensuring robust cybersecurity along the way.
Conclusion
Malaysia has made remarkable strides in becoming a beacon of digital transformation and rapid progress – proving to the world that the country is prepared to invite ingenuity and innovation to its doorstep for the betterment of its society. As a result of this fortitude and optimism, AI in Malaysia and cybersecurity in Malaysia are both booming industries in their own rights. As the shift to AI continues, it’s up to us to remain cautiously optimistic about how we use the technology while staying generously delighted for those who innovate and dare to cross boundaries for the sake of expansion.
