Malaysia expands AI adoption in public services and business

Artificial intelligence (AI) adoption is expanding across Malaysia's public and private sectors. In Penang, the State Government Secretariat, in collaboration with the Malaysia Productivity Corporation (MPC), is driving public service transformation through AI. A recent competition involving 14 state agencies featured 19 projects, including AI-based chatbots, predictive analytics, and process automation to improve service delivery.

In the municipal sector, the Penang Island City Council (MBPP) has implemented the ‘Smart Green Penang’ system. This initiative utilizes AI and satellite data to monitor the health and safety of approximately 14,000 trees, providing early warnings for potentially hazardous trees to ensure public safety.

Nationally, AI adoption among Malaysian companies has risen to 38 percent this year, up from 27 percent in 2025, according to a study by Strand Partners for Amazon Web Services (AWS). While usage is growing, the study notes that 67 percent of companies still focus on basic applications like chatbots, and only 19 percent have formal strategies to expand AI across business functions. Most companies, approximately 57 percent, rely on external vendors rather than developing in-house capabilities.