Malaysia plans to introduce its first dedicated artificial intelligence (AI) law in early 2027 as the government moves to strengthen oversight of the technology and address concerns around its risks and misuse.
Digital Minister Gobind Singh Deo told parliament on October 5 that the government is drafting an AI Act that will take a risk-based approach. Authorities are also developing mechanisms to enforce rules governing the use of AI.
The proposed legislation comes as governments globally increase scrutiny of AI, with the European Union already enforcing its AI Act, the world’s first comprehensive legislation covering the development and use of the technology.
For Malaysia, the planned law forms part of a broader effort by Prime Minister Anwar Ibrahim’s government to address emerging risks from AI and social media while supporting the country’s digital ambitions.
The government has already introduced tighter measures for social media, including requirements announced in June for platforms to prevent children under 16 from holding accounts and verify users’ ages.
Malaysia is also seeking to position itself as a regional hub for digital technology and innovation. Under the Thirteenth Malaysia Plan, the country aims to become an inclusive and sustainable AI nation by 2030, while the Malaysia Digital Action Plan 2030 (MD2030) targets a digital economy contribution of 30 per cent of GDP by the same year.
The regulatory push comes alongside efforts to ensure that AI adoption translates into economic growth and stronger domestic innovation.
Fadzli Abdul Wahit, senior vice-president, corporate affairs at Malaysia Digital Economy Corporation (MDEC), said Malaysia’s next phase of digital transformation should move beyond technology adoption towards developing homegrown solutions and companies capable of competing internationally.
“The next stage cannot simply be about using more technology or attracting more infrastructure. Malaysia must continue creating our own solutions, build greater value and develop innovations that can scale internationally,” he said at the 2nd International Conference on Global Business & Digital Economy 2026 organised by Universiti Kebangsaan Malaysia.
Fadzli said AI, automation and advanced analytics could help sectors including manufacturing, financial services, healthcare and agriculture improve productivity, while enabling small and medium-sized enterprises to reach new markets.
Talent remains central to AI transition
As AI becomes embedded across more sectors and professions, Fadzli also highlighted the need to expand AI capabilities beyond technology teams.
“Technology can be purchased. Infrastructure can be built. Capital can be mobilised. But sustainable innovation also requires talent, research, entrepreneurship and collaboration,” he said.
He called for stronger collaboration between universities and industry to turn research into commercial solutions, new businesses and technologies addressing real-world challenges.
MDEC will continue working with government, industry and academia to strengthen Malaysia’s digital ecosystem, support local innovation and attract quality digital investment, he added.
The proposed AI Act will therefore sit alongside Malaysia’s wider push to build an AI-ready economy, balancing technology adoption and innovation with greater safeguards around its use.