Why Malaysia’s AI Infrastructure Strategy Must Look Beyond Data Centers. Artificial Intelligence (AI) is rapidly transforming the way we live and work, from enabling precision agriculture and revolutionizing healthcare diagnostics to driving fintech adoption in underserved communities. In Malaysia, the momentum to accelerate AI adoption has never been stronger. The government has placed AI at the core of its digital transformation agenda, as reflected in the 13th Malaysia Plan (13MP) and the forthcoming AI Nation Framework, which will harness the country’s 5G infrastructure to support smart-city solutions. In addition, Budget 2025 earmarked RM10 million to establish the National Artificial Intelligence Office (NAIO) under MyDIGITAL, tasked with coordinating the nation’s AI initiatives. With Southeast Asia’s AI-driven economy projected to contribute billions to regional growth, Malaysia itself could capture up to USD115 billion in AI-related GDP contribution by 2030.
Much of the excitement around AI infrastructure has so far centered on the rapid growth of data centers. The country has become a hotbed for digital infrastructure investment, with new data center projects being announced on a regular basis. While these facilities are undeniably vital to Malaysia’s AI ambitions, relying solely on data centers risks creating bottlenecks and blind spots. If the goal is for AI to serve as a catalyst for inclusive and sustainable growth, Malaysia must adopt a more holistic, distributed approach to AI infrastructure—one that goes beyond centralized hubs and embraces AI-ready personal computers (PCs) and edge devices that bring intelligence closer to where data is created.
Consider, for example, a smallholder farmer in rural Malaysia using an AI-powered application to analyze soil and weather conditions. While such tools can improve yields and cut costs, their effectiveness can be compromised by unreliable internet connectivity, a persistent challenge in rural parts of Malaysia and across ASEAN. Routing data back and forth between remote villages and urban-based data centers leads to slower response times, higher energy consumption, and greater exposure to cybersecurity risks. This illustrates why an AI strategy focused solely on data centers is insufficient. To truly empower communities and businesses, AI infrastructure must bridge connectivity gaps, reduce latency, and minimize environmental impact through a distributed compute model.
Running AI applications locally on AI PCs or edge devices offers a more efficient, secure, and sustainable solution. For instance, the same farming app operating directly on a device equipped with an AI chip can run offline, consume less energy, and safeguard sensitive data on-site. This ensures greater reliability and cost savings for users, while reducing dependence on centralized cloud infrastructure. AI PCs, equipped with Neural Processing Units (NPUs), excel in high-performance, general-purpose AI tasks, enabling researchers, developers, and professionals to work locally. Edge devices, on the other hand—whether embedded in factories, farms, or vehicles—are optimized for real-time, low-power inference at the data source, often under challenging environmental conditions.
In a distributed compute ecosystem, data centers remain essential as centralized hubs for training large-scale AI models, storing massive datasets, and managing complex analytics. However, their role is complemented by AI PCs handling on-device development and inference, alongside edge devices enabling automation and real-time responsiveness. This layered approach ensures that AI is not only powerful but also accessible, resilient, and energy efficient.
As global competition intensifies to lead the AI era, Malaysia is well-positioned to establish itself as a frontrunner. The nation has the right ingredients: strong government backing, a supportive business environment, and a growing pool of AI talent. But leadership will depend on building an AI infrastructure that is inclusive and sustainable, not one-sided. Shifting the national conversation beyond data centers toward a distributed compute strategy will be key to unlocking AI’s full potential and ensuring that every Malaysian—from urban professionals to rural farmers—can benefit from this transformative technology.