This article first appeared in The Edge Malaysia Weekly on March 30, 2026 - April 5, 2026

OpenClaw, with its distinctive logo featuring a red lobster, has taken the tech world by storm. The autonomous artificial intelligence (AI) agent, developed by Austrian computer programmer Peter Steinberger, signals a major shift in how the technology is used, from answering questions to carrying out tasks through large language models (LLMs).

That shift is significant enough for Nvidia Corp CEO Jensen Huang to say OpenClaw “is definitely the next ChatGPT”.

Steinberger joined OpenAI, the San Francisco-based AI firm that created ChatGPT, in mid-February. OpenClaw is an open-source project backed by the firm.

Ready or not, the next phase of AI is already taking shape, with the space very much dominated by a handful of well-capitalised global tech giants from the US and China. American corporations such as OpenAI, Nvidia, Anthropic, Microsoft, Google and Amazon, as well as Chinese firms including Tencent, Huawei, Alibaba, Baidu, ByteDance and DeepSeek are setting the direction — and capturing most of the value.

So, where does that leave Malaysia?

In recent years, there have been growing concerns that the country’s semiconductor industry sits too low in the global value chain, with limited exposure to chip design or AI development. Taken further, it raises a blunt question as AI takes centre stage: Will parts of Malaysia’s technology sector be left behind? Well, any conclusions may be premature.

Malaysia is unlikely to produce a frontier AI model or top-tier chip company any time soon, even with the US$250 million (RM1.1 billion) deal with SoftBank-backed Arm Holdings plc.

However, the AI economy runs on more than just software, models and advanced chips. It also depends on a wide base — semiconductor devices, advanced packaging and testing, data centres and cloud infrastructure, as well as other engineering and supporting services.

In fact, there are inspirations to draw from. Nokia Corp, the Finnish corporation once known for mobile phones, has successfully reinvented itself as a key supplier of AI networking infrastructure for cloud and data centres.

Notably, it was announced in October last year that Nvidia will be paying US$1 billion for a 2.9% stake in Nokia, pushing the latter’s share price to its highest level in nearly a decade.

The issue, then, is not whether Malaysia can lead the AI race. It is whether it can secure a meaningful role in the wider ecosystem and capture a share of the value being created.

ACE Market-listed digital solutions and application development specialist Agmo Holdings Bhd (KL:AGMO) CEO and Konsortium AI Negara (KAIN) founding member Tan Aik Keong opines that Malaysia’s current position is a byproduct of the country’s own success.

“For 50 years, we optimised for the ‘how’ (process excellence) while outsourcing the ‘what’ (intellectual property and product design) to multinational corporations. This created a ‘service provider’ mindset where our ecosystem was built for zero-defect manufacturing rather than the high-risk, high-reward nature of chip architecture,” he tells The Edge.

Tan points out that Malaysia did not necessarily fail to innovate but rather, the country’s incentives were locked into a middle-income trap where funding models favoured physical assets over intangible IP.

“But it is far from too late. As the industry pivots toward AI accelerators and graphics processing units (GPUs), the frontier of innovation has shifted toward advanced packaging. By leveraging the National Semiconductor Strategy (NSS) to bridge the gap between our back-end strength and front-end design, and by fostering a venture-backed risk appetite for integrated circuit (IC) design, we can transform from a global factory into a strategic architect for the region’s AI-driven future,” he says.

KAIN, co-founded by Agmo, is a coalition of more than 100 key players in Malaysia’s generative AI ecosystem. Its mission is to expand the country’s AI ecosystem to over 200 companies and develop 100,000 AI talents by 2030.

Tan acknowledges that the current exposure to robotics, sensors and coding in Malaysian schools remains fragmented, creating a “digital divide” where foundational AI literacy is often treated as an elective rather than a core competency.

“Without fixing this at the grassroots, any long-term national AI strategy risks building on hollow ground. We cannot produce world-class chip designers or AI architects if our students only experience technology as passive consumers,” he warns.

Tan stresses that bridging the talent gap requires a “whole of nation” approach, with a unified, industry-led roadmap that aligns classroom learning with the actual hardware and software demands of the AI era.

According to him, through the group’s academy arm Agmo Academy, it is executing a “kindergarten to career” roadmap. At Agmo Junior, a tech school for students aged five to 17, robotics, coding and AI concepts are introduced to move them from passive consumers to active creators.

Meanwhile, in partnership with MyMahir by TalentCorp Malaysia and Yayasan Peneraju, Agmo is training the next generation of agentic AI builders. Its curriculum focuses on high-value skills like AI vibe coding, AI-assisted development and agentic AI building, to ensure that the Malaysian workforce remains competitive as job roles evolve.

“Our goal is for Agmo to be the strategic architect of Malaysia’s AI landscape. Over the next few years, we aim to transition the nation from ‘using foreign AI’ to ‘owning sovereign AI’. We want to prove that a home-grown company can build world-class, audited and ethical AI systems that don’t just mimic global models but are purpose-built for the unique complexity of the Southeast Asian economy,” Tan stresses.

He says while Malaysia may not give birth to a global frontier-model giant like OpenAI, the country’s relevance lies in achieving AI sovereignty — the ability to control its own digital destiny.

“We should nurture a specialised ecosystem of local system integrators and vertical AI firms that build localised models using open-source foundations like Llama or DeepSeek, tailored with Malaysian data and cultural context,” he adds.

Taking a leaf from Nokia’s book, Tan believes Malaysia should pivot towards becoming the critical infrastructure and connectivity backbone for the region.

“Just as Nokia shifted from handsets to 5G and data centre networking, Malaysia must evolve from a passive host of data centres into an active manager of a sovereign AI cloud. This requires a ‘local-first’ strategy: utilising local infrastructure [like the RM2 billion sovereign cloud announced under Budget 2026], managed by local talent, to solve high-value local use cases in healthcare, energy and government services,” he asserts.

By focusing on this supporting “AI pick and shovel” industry, he is confident that Malaysia can secure its place as the strategic “control tower” for AI in Asean.

Taylor’s Education Pte Ltd president Karl Engkvist is of the view that talents must be developed from cradle to career, and not left to universities alone.

“That is why the Taylor’s federated model matters: schools that build digital confidence early, college pathways that strengthen readiness, and university programmes that go deeper into applied technology, and continuing education that helps working adults reskill,” he tells The Edge.

Engkvist observes that Malaysia has trained for the semiconductor industry it built, including manufacturing, testing, packaging and process optimisation.

“That was commercially logical, but it also meant we developed more talent for execution than, for example, chip design, IP creation and advanced product development. To move up the value chain, the education model must change as well,” he says.

At Taylor’s, the education group sees talent development as a full life cycle, from schools such as Garden International School, Taylor’s International Schools, Nexus International School and Lexel International School to Taylor’s College and Taylor’s University.

“Across Taylor’s Education Group, we serve more than 35,000 students in Malaysia, Singapore and Vietnam, so we see very clearly that the pipeline starts long before university. Malaysia now needs stronger STEM (science, technology, engineering and mathematics) foundations, more interdisciplinary learning and much deeper collaboration between universities and industry around real-world design, automation, AI and engineering challenges,” Engkvist stresses.

According to him, while Malaysian students’ exposure to AI and robotics is improving, it is frequently uneven. Many of them still experience technology mainly as users rather than as creators.

Engkvist highlights that Taylor’s University has launched Malaysia’s first private mechatronics degree with specialised tracks in robotics systems and AI. It is also giving students direct industry exposure through initiatives such as the Digital Innovation and Smart Society Impact Lab, where students help Malaysian small and medium enterprises (SMEs) apply data analytics and machine learning to real business problems.

“Talent stays where opportunity feels credible and real. Graduates will build their futures where they can see stronger career pathways, better industry exposure, more ambitious work and a clearer sense of how they can grow,” he says.

“Universities cannot solve this alone, but they can do far more to anchor talent early. At Taylor’s, we do not see education as a one-off degree transaction. We see it as a full journey, from school to college to university to lifelong learning. That is why industry-linked learning, including relevant and practical internships, matters so much.”

He adds that Malaysia should not only aim to produce talent, but also be the place where talent wants to stay and grow.

Kenneth Siow, regional director for Southeast Asia and general manager for Singapore and Malaysia at Tencent Cloud International, says the company is working closely with Malaysian partners to help organisations move from AI pilots to production. “We are focusing on real business needs such as digital customer onboarding and verification, customer engagement and smarter operational workflows.”

For example, Tencent Cloud is working with fintech firm Boost, solutions provider Opensys Technologies and Sarawakian technology firm SOCOE to deploy Palm AI, Malaysia’s first palm-based payment prototype.

Another fintech player Ryt Bank is using Tencent Cloud’s advanced chat solutions to enable real-time intelligent messaging and automated customer interactions for its digital banking services, while YTL Communications Sdn Bhd uses Tencent Cloud’s AI-powered electronic know-your-customer (eKYC) solution to support its embedded SIM sign-up process and strengthen verification accuracy.

More broadly, enterprises are moving towards deploying AI at scale, where value comes from integrating AI models into real workflows with measurable outcomes, says Siow.

“At Tencent, we support this shift through an open, multi-model approach — continuing to invest in our home-grown large model HY (Hunyuan) while deepening access to leading external and open-source models — so enterprises can choose fit-for-purpose tools for different tasks. We are also exploring how Malaysian enterprises can build with more advanced AI capabilities, including Tencent Cloud’s multimodal technologies such as the HY 3D AI creation engine and the Agent Development Platform, which help organisations generate digital assets and automate complex workflows more efficiently,” he elaborates.

Tencent Malaysia country manager Judy Wong says the company is committed to supporting Malaysia’s digital ambitions by enabling the adoption of practical, real-world AI and cloud solutions while investing in local talent development. “In 2025, we expanded to a new office in Kuala Lumpur with a capacity for a 500-strong workforce, made up of skilled professionals across development operations, data analysis and customer experience,” she adds.

ACE Market-listed digital workforce transformation company PEOPLElogy Bhd (KL:PEOPLE) CEO Allen Lee contends that preparing Malaysia’s workforce for the AI-driven technology landscape requires more than delivering training programmes.

“It requires an integrated approach that connects learning design, capability building and measurable employment outcomes. That is the distinction PEOPLElogy has built its model around,” he says.

At the core of PEOPLElogy’s approach is the 6-Dimensions Transformation Framework, which integrates technical upskilling, digital literacy, applied problem-solving, behavioural development and industry immersion into structured pathways that are aligned with real business and sector needs, and not generic competency frameworks.

In supporting sectors such as electrical and electronics (E&E) and the broader AI ecosystem, PEOPLElogy’s programmes span data analytics, AI fundamentals, automation, cybersecurity and digital operations, with an emphasis on applied capability rather than merely theoretical knowledge.

“Our initiatives are specifically designed to close the gap between education and employment, embedding industry certifications, mentorship and hands-on project exposure into pathways that lead to concrete workforce outcomes,” says Lee.

PEOPLElogy has trained more than 250,000 talents to date and the group’s focus this year is on scaling AI workforce transformation programmes for enterprise clients at different stages of their digital transition.

He opines that Malaysia does not need to compete at the frontier of foundation model development to capture meaningful value from the AI economy. “That is not a concession, it is a strategic position that reflects where our genuine competitive advantages lie and where the most scalable opportunities are.”

According to Lee, the firms Malaysia should deliberately nurture fall into three categories. First, AI application companies that build domain-specific solutions for industries where Malaysia already has depth, such as manufacturing, logistics, financial services and healthcare. “These businesses create real economic value, scale faster than model developers and are far less capital-intensive,” he explains.

Second, data and AI infrastructure specialists and companies focused on data engineering, model integration, AI governance and compliance services.

“As enterprises across the region accelerate AI adoption, demand for firms that can help implement AI responsibly and at operational scale will grow significantly, and Malaysia is well positioned to serve that demand,” he elaborates.

Third, AI-enabled enterprise solutions providers that embed AI into core business processes in ways that measurably improve operations, decision quality and customer outcomes — not as a technology demonstration, but as a structural business improvement.

“The Nokia analogy is instructive. Nokia did not attempt to become Apple. It repositioned into network infrastructure and became an indispensable enabler of global connectivity,” he points out.

“Malaysia’s equivalent opportunity is to become the most capable and trusted ecosystem for applied AI deployment and advanced technology operations in Southeast Asia — a position that is achievable, commercially valuable and aligned with our existing strengths in manufacturing, operations and infrastructure,” says Lee.

In mid-February, Hartamodal Sdn Bhd, the venture capital arm of boutique asset management firm Tradeview Capital Sdn Bhd, announced a strategic investment in NEUON AI Sdn Bhd, a Sarawak-based AI solutions company that has successfully commercialised advanced AI technology across multiple high-impact sectors.

The company’s flagship AI model, ROADPLUS, which is a computer vision-powered road asset management platform, is now actively deployed by state government agencies, including Jabatan Kerja Raya Sarawak.

NEUON AI has signed a memorandum of understanding with Shenzhen-listed Runjian Co Ltd, a digital intelligent operation and maintenance services provider in China, to explore automated harvesting technology for black pepper crops and navigation satellite systems in oil palm plantations.

NEUON AI founder and CEO Dr Chai Kok Chin says the company’s mission is to bridge the “intelligence gap” between raw data and tangible impact through its data-to-decision platform.

“We solve critical national challenges such as turning physical assets into real-time data streams, data silos and talent deficits by turning physical assets into digital intelligence. We benchmark our ecosystem against global leaders like Palantir, Planet Labs and C3.ai to ensure a resilient, multi-vertical foundation for Malaysia,” he explains.

Chai says NEUON AI is not attempting to build the most famous AI, but the most indispensable one.

“We invite the government, visionary investors and industry partners to join us in securing Malaysia’s sovereign applied AI future. By deliberately shifting our focus from chasing isolated ‘unicorns’ to nurturing a collaborative ecosystem of high-impact applied AI companies, we can confidently build a trusted, sovereign digital economy for Southeast Asia,” he asserts.

Chai points out that while the global race focuses on frontier models — representing just 5% of the AI value chain — the remaining 95% of real economic impact lies in applied AI.

“We humbly believe Malaysia does not need to replicate Silicon Valley. Instead, we must deliberately leverage our deep domain expertise in tropical agriculture, biodiverse forestry and rapid urbanisation,” he says.

“By partnering closely with the government, businesses and visionary investors, we can transform Malaysia into a living lab for applied innovation. When we deploy AI to solve tangible challenges, we move beyond indirect exposure to actively defining AI’s utility for the developing world.”

Hartamodal industry adviser Dr Miko Chang says rather than competing directly with frontier model developers like OpenAI or Nvidia, Malaysia should focus on building companies that enable and apply AI effectively. This includes AI infrastructure firms that optimise data pipelines, model deployment and edge computing, as well as vertical AI companies solving real problems in sectors such as manufacturing, agriculture, healthcare and smart cities.

“Malaysia can also strengthen its position in the semiconductor and hardware ecosystem supporting AI systems. The opportunity is similar to how companies like Nokia repositioned themselves as critical infrastructure providers. The country’s strategic advantage lies in becoming an essential enabler of AI adoption rather than trying to replicate Silicon Valley’s foundation AI model ecosystem,” she says.

Meanwhile, the global AI boom is increasing demand for advanced semiconductor packaging technologies such as chiplet integration and 3D packaging, which are essential for AI accelerators and GPUs.

“Malaysia already has a strong foundation in semiconductor assembly and testing, built over decades of industry participation. The NSS is helping to push the industry toward higher-value capabilities, but advanced packaging requires significant capital investment, specialised equipment and highly skilled talent,” says Chang.

Hartamodal executive director Tan Cheng Wen recalls that his team met NEUON AI through Chang, as the company has long-standing collaborations with universities such as Swinburne University Sarawak, where Chang is head of school (ICT).

“NEUON AI really stood out as they focus on enabling scalable AI deployment and building technologies that support real-world AI applications such as their road condition monitoring solution, namely ROADPLUS,” he says.

“Rather than competing directly with global foundation model developers, the company is positioned within the enabling layer of the AI ecosystem. After a year of getting to know the core team members of NEUON AI, understanding their value proposition and multiple visits to Kuching, they fulfilled all of our investment criteria as set out by our investment committee and we decided to invest in them.”

While Cheng Wen is unable to disclose the details of the investment, he reveals that Hartamodal’s typical ticket size is between RM1 million and RM10 million for a minority or significant minority stake, and that is consistent across all its deals.

“We will continue to meet Malaysian AI companies that combine strong technical foundations with clear industry applications and have competent core founding members,” he adds.

This includes firms working on AI infrastructure, enterprise AI solutions and technologies that help organisations integrate AI into real-world operations.

“We hope that the Malaysian government can prioritise and provide further support and opportunities to locally grown AI companies like NEUON AI to participate and implement AI projects. Only then, can there be more local champions which will contribute towards Malaysia emerging as a regional leader in AI. All in all, we hope to nurture a crop of quality AI companies as they mature from the life cycle of private to public,” says Cheng Wen.

Ultimately, the question is not whether Malaysia can build another OpenClaw, but whether it can ensure the red lobster cannot move without it. And more importantly, whether the country can make that intelligence work where it matters most. 

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