Artificial intelligence (AI) has become a cornerstone of technological progress, promising breakthroughs across industries from healthcare to finance and reshaping global economies.

“The development and deployment of AI must be guided by responsible governance. This lays the groundwork for innovation while safeguarding citizens and societal values,” said Adrian Marcellus, Chief Executive Officer of MyDIGITAL Corporation.

“By addressing ethical concerns, developing regulatory frameworks and fostering international collaboration, Malaysia can set a precedent for inclusive and equitable AI governance in Southeast Asia,” he added.

As Malaysia progresses toward becoming a regional leader in AI, the government has started its journey with the launch of the National AI Roadmap 2021-2025, the publication of the National Guidelines on AI Governance and Ethics, and the establishment of the National AI Office.

While advancements in AI adoption in diverse fields highlight Malaysia’s potential as a hub for AI, they also underscore the critical need for robust governance to mitigate risks such as algorithmic bias and data misuse. A well-structured governance framework will enable Malaysia to maximize AI’s economic potential, projected to contribute RM115 billion to the country’s gross domestic product (GDP) by 2030, according to a study by AT Kearney, while minimizing societal harm.

The Future of AI Governance in Malaysia whitepaper, developed collaboratively by ISIS Malaysia, Malaysia Centre for the Fourth Industrial Revolution (MYCentre4IR) and Microsoft, emphasizes that governance mechanisms must address AI’s socio-technical nature.

To ensure robust AI governance, Malaysia’s strategy must rest on three key pillars: ethical principles, regulatory mechanisms, and capacity building.

1. Ethical Principles. Malaysia’s National AI Roadmap 2021-2025 outlines seven guiding principles, including fairness, transparency, and accountability. These principles are critical for fostering trust among stakeholders — from citizens to private sector entities. They also serve as the foundation for sector-specific guidelines, ensuring tailored approaches to AI deployment in areas such as healthcare, education and cybersecurity. More importantly, these principles must be operationalised with clear mechanisms to translate ideals into action.

Global practices, such as the EU’s AI Act and the OECD’s AI Principles, can serve as references. However, Malaysia’s approach should take into account inclusivity and cultural relevance, addressing the unique challenges faced by the country’s diverse multicultural population.

2. Regulatory Mechanisms. Rather than rushing to implement hard regulations, Malaysia is wisely adopting a risk-based and phased approach. This strategy allows for accelerated adoption where there are low-risk situations, enables iterative learning and avoids stifling innovation. Instead of creating new policies or regulations, extant policies and regulations can be strengthened to account for these emerging AI risks.

For instance, strengthening the Personal Data Protection Act to take into account developments in data practices due to the adoption of AI and driving discussions to determine policies for AI-enabled cybersecurity threats via the National Cyber Security Committee are critical steps.

This also extends to the idea of sectoral governance, enabling industry-specific nuances to be addressed effectively. For example, the use of AI in healthcare might need to pay closer attention to patient safety and data confidentiality, while the use of AI in communications may need to focus more on transparency.

In addition to AI principles and regulatory mechanisms, AI safety should also be on Malaysia’s radar. Operationalising AI safety involves a risk-based approach that may require embedding rigorous testing, validation, and monitoring processes throughout the lifecycle of AI systems when used for critical functions. By prioritizing AI safety, Malaysia can build public trust and create a foundation for sustainable AI adoption that aligns with societal values and expectations.

3. Capacity Building. Addressing talent gaps is another paramount focus for Malaysia’s AI ambitions. The AI Talent Roadmap 2024-2033 and the establishment of Malaysia’s first AI faculty at Universiti Teknologi Malaysia are promising steps for the country. These initiatives aim to produce skilled professionals capable of developing, auditing, and managing AI systems responsibly.

However, Malaysia must do more to address the brain drain of AI talent to higher-paying markets abroad. Incentives, such as grants, scholarships, and tax relief for AI professionals, could help retain and attract expertise.

In 2025, Malaysia should leverage its ASEAN chairmanship year to highlight its domestic achievements and demonstrate its commitment and leadership for a responsible and sustainable AI future for the region.

By championing ethical AI practices, Malaysia can position itself as a global thought leader in this domain. Malaysia’s unique geopolitical position as a bridge between East and West, as well as an interlocutor of the Global North and South, offers a strategic advantage. This allows Malaysia to shape a balanced approach to AI governance that considers diverse perspectives. As AI continues to evolve, so too must the frameworks that govern it. Good governance and an enabling environment will help to foster high quality and impactful innovations. Through visionary leadership, strategic collaborations, and unwavering focus on ethical principles, Malaysia can emerge as a global exemplar of responsible AI governance—a beacon of trust in an increasingly AI-driven world.