This article first appeared in Digital Edge, The Edge Malaysia Weekly on April 13, 2026 - April 19, 2026

Two years after introducing the Sarawak Digital Economy Blueprint 2030 (SDEB), the state government has begun embedding artificial intelligence (AI) tools into its public sector, rolling out citizen-facing digital services and establishing agencies such as the Sarawak Artificial Intelligence Centre (SAIC) to steer AI development and coordinate AI policy and adoption.

One example is the launch of the official government virtual AI assistant Dayang, an AI chatbot designed to provide an easy-to-use interface for citizens visiting the Sarawak government website to enquire about government services, such as welfare services or utility bills.

Co-founder of entrepreneurship consultancy Restrospective Discovery LLP and former board member of Sarawak Multimedia Authority (SMA) Ehon Chan says, in the early stages, Sarawak’s push for AI integration was shaped more by smaller-scale experimentation than large-scale deployment.

“What worked well [with digitalisation efforts] was the state government’s willingness to pilot small but meaningful digital interventions, especially in service delivery and internal efficiency. For example, integrating basic analytics into citizen-facing platforms improved turnaround times and gave policymakers a clearer picture of demand patterns,” says Chan.

This early experimentation has since been reinforced by policy direction. For its 2026 budget, Sarawak has singled out the tourism and agriculture sectors for focused digital transformation.

“[The] focus on tourism may largely be due to the Visit Malaysia 2026 campaign, but this can also directly benefit rural communities surrounding key tourism sites as well as be a boost for the newly minted AirBorneo,” says Mona Manap, CEO of Borneo Business Connect, an event organiser for regional trade exhibitions.

She says the heavy emphasis on agriculture is in line with the state budget’s theme of “Empowering people, advancing prosperity, building a resilient future”.

“Agriculture is also the biggest [beneficiary of] large-scale AI utilisation, potentially reducing the need for costly manpower and expending fewer resources for navigating and managing difficult terrains for agriculture,” says Mona.

With about RM213 million allocated for agriculture — covering modernisation, research and development, food security initiatives and more — agriculture entrepreneurs are expected to be among the main beneficiaries of AI adoption in the coming years.

“However, as of now, the benefits of using AI on a large scale and digitalising government services are increasing general productivity and being part of the solution to the potential crisis of Sarawak’s ageing population and low fertility rate,” says Mona.

For the latter, she explains that AI is being used to improve welfare services for the elderly while automating tasks in the face of potential labour shortages.

The birth rate in Sarawak has fallen over the past couple of decades, with the fertility rate falling from 2.76 in 2001 to 1.6 in 2023, according to Datuk Seri Fatimah Abdullah, State Minister of Women, Childhood and Community Wellbeing Development.

But while the state government has been focusing on incorporating AI into services such as green energy, aerospace, agriculture and rural development, Mona says more attention should be paid to raising AI adoption in the private sector.

This comes from her experiences speaking with various businesses and government agencies around Sarawak during events her company hosts. She believes greater private sector collaboration would help in wider AI adoption.

“Accelerating the adoption of AI on a commercial level by various sectors is in the interest of the government. This helps in moving [Sarawak] towards being a more knowledge-based economy while reducing reliance on government-funded projects and creating a robust business environment to attract foreign investments,” she adds.

As part of its push to expand AI services and capabilities in the region, the state government has also been leading various collaborations and partnerships with international technology players, including Alibaba Cloud and IP ServerOne.

Lee Cheung Loong, managing director and founder of cloud services provider IP ServerOne, says one of the key reasons Sarawak is reaching out to data centre players is data sovereignty, as the state government wants local data to remain within its boundaries.

Existing government data centres currently serve only public agencies, leaving gaps for universities and local businesses, whose data is often stored in data centres in Peninsular Malaysia. This gap is one that IP ServerOne is eager to fill.

“Sarawak has a data centre for government [agencies]; it is a data centre pretty much tailor-made for Sarawak. But what about universities? Small businesses? They still have to use data centres from the peninsula or Singapore. There is an opportunity for home-grown providers to store data locally,” says Lee.

Despite announcing IP ServerOne’s expansion into Sarawak last September and expressing eagerness to support the state government’s AI plans, Lee says engagement with the SAIC remains in the exploratory phase.

He adds that while this engagement is ongoing, IP ServerOne is “getting ready”, putting systems and infrastructure in place so it will be prepared if the SAIC looks for partners for its AI initiatives.

Despite these initiatives, the introduction of AI in government services in Sarawak remains largely in its infancy.

Most organisations are still adopting off-the-shelf solutions for repetitive tasks such as answering email enquiries or basic content creation, says Mona. Much more work needs to be done, although she adds that the state government is actively pursuing this.

At the International Conference on Quality & Innovation in November, Mona moderated several sessions on AI, ranging from its impact on the workforce to green technology.

“It was definitely an eye-opener to see how far some of the other countries have gone with AI. It brought into perspective how Malaysia, and Sarawak specifically, needs to play catch-up if we were to be at par or to establish ourselves as a leader in some sectors, such as the much-touted green hydrogen agenda,” she says.

Despite Sarawak’s AI ambitions through initiatives such as SarawakID and SAIC, AI adoption in both the private and public sectors remains slow compared with its overseas peers, she observes.

“Worse still [is the number of] organisations with an AI strategy. The main concerns keeping organisations from exploring AI are the perceived high cost of AI implementation and the lack of skilled AI practitioners, thus amplifying the fear of misuse and solidifying distrust.”

Nevertheless, the establishment of the SAIC is a clear signal that Sarawak is actively working to catalyse AI integration into the economy, she stresses.

“SAIC will be focusing on healthcare, agriculture and education. But for the general business community, the AI Talent Development Initiative (an effort by the Ministry of Digital and the National AI Office to build a workforce for an AI-driven economy by 2030) will be focusing on creating a more AI-competent workforce,” says Mona.

She remains optimistic about AI’s potential to improve efficiency and productivity in government services and beyond. However, she says AI competency will ultimately determine whether these technologies deliver meaningful impact, adding that AI technologies and education must be accessible to all segments of society.

“The opportunities [of AI] outweigh the risks, but a move towards AI adoption that is not in tandem with AI competency risks widening the equity gap in opportunities in the public sector, either through work opportunities or distribution and accessibility of benefits or opportunities,” says Mona.

Restrospective Discovery’s Chan says that, during his time at the SMA, two structural obstacles consistently stood out. The first was data fragmentation, where information sits in departmental or agency silos with inconsistent standards or incomplete digitisation, making it difficult to use for building AI datasets.

The second was a clear capability gap, particularly in AI literacy, change management and cross-agency collaboration.

“The technology outpaced organisational readiness, which is not unique to Sarawak but is particularly pronounced given our geographic spread and diverse user base,” he explains.

Against this backdrop, Chan argues that AI should not be treated as a standalone technology but as a tool that strengthens the state government’s broader economic and development missions.

He highlights three priority sectors: natural resources and environmental management, healthcare and rural service delivery, as well as education and skills development.

“AI can optimise land use, monitor peatlands, prevent deforestation, support wildlife conservation and manage flood or river systems, which aligns with Sarawak’s sustainability ambitions.

“[Meanwhile], AI-enabled telehealth, predictive diagnostics and triage systems can meaningfully bridge rural-urban divides.”

At its core, Chan says AI integration in the public sector must begin with inclusion rather than efficiency. Many communities, particularly rural populations and people with disabilities, require inclusive interfaces such as voice systems, screen-reading AI and translation tools.

“If Sarawak prioritises inclusion-first AI, it will leapfrog other regions that still design for the ‘average’ urban user. AI should not replace human-led development but augment our ability to scale services across a geographically dispersed population,” he says.

However, government initiatives alone cannot deliver inclusive AI. Chan stresses that this requires collaborative, transparent and community-centred efforts.

“I highlight this because inclusion is too often treated as an aspiration rather than a design principle. A recent study by the Sarawak Development Institute and Universiti Teknologi Sarawak revealed that people with disabilities are excluded from every federal and state digital entrepreneurship initiative, even though inclusivity is consistently emphasised in strategies and blueprints.”

Drawing on his experience at the SMA and in the social enterprise space, Chan outlines three key shifts needed if Sarawak is to meet its 2030 targets.

“First, we need to move from digitalisation to integration. Many systems are now digital but they are not yet interoperable. Seamless data-sharing frameworks and common standards must be in place for AI to function meaningfully across agencies,” says Chan.

“Second, we must invest in talent at scale. Sarawak needs a pipeline of AI-literate civil servants, data professionals, technologists and sector-specific practitioners who can interpret, maintain and govern these systems.

“Third, we must build adoption frameworks, not just technical infrastructure. The success of AI ultimately depends on user trust, literacy and change management, especially among rural, indigenous and underserved communities.”

He also calls for a shift away from procurement-led digitalisation towards genuine local capability-building, noting that reliance on vendors in Peninsular Malaysia has limited Sarawak’s ability to maintain, adapt and scale digital systems independently.

Moving away from these vendors would also allow talent development to be better adapted to local needs and realities, rather than simply replicating approaches from the peninsula.

To directly address data fragmentation, Chan highlights that the state government should move towards a “government as a platform” (GaaP) model, which builds shared digital rails for identity, payments and data layers that multiple agencies, local businesses and civil society can innovate on top of.

“Other countries have done this well, such as Estonia and Singapore. They demonstrate that GaaP reduces duplication, accelerates innovation and ensures long-term sustainability,” he says.

An example of the need for a unified platform can be seen in SarawakPass, one of the state’s key digitalisation initiatives.

SarawakPass is the state government’s version of the federal government’s recently launched MyDigital ID, providing a virtual identification card designed to enable secure and convenient access to government services.

“For private and social enterprises, the value of SarawakPass lies in its ability to reduce administrative friction for things like licensing, compliance and eligibility checks. It also enables more efficient distribution of benefits or grants while creating opportunities for public-private service integration,” says Chan.

Both SarawakPass and MyDigital ID are set to be integrated seamlessly this year, following a memorandum of understanding signed between the Sarawak state government and the National Cyber Security Agency last November.

While SarawakPass is not directly tied to AI, its role in centralising citizen identity data lays the groundwork for future AI-powered services.

Chan cautions, however, that ensuring seamless interoperability across sectors — and between citizens in Peninsular Malaysia and Sabah and Sarawak — remains a significant challenge.

“The challenge and opportunity are building secure interoperability and shared data standards so that citizens experience one seamless system, not parallel ones.

“Imagine if SarawakPass is part of a larger GaaP architecture that bridges federal and state layers while enabling innovation from local SMEs (small and medium enterprises) and community-based organisations. From a private and social enterprise perspective, this is where the real impact emerges.”

With the Sarawak Digital Economy Blueprint 2030 now in place, Chan says the priority is to build an ecosystem that consolidates, integrates and orchestrates digitalisation efforts so that the digital future Sarawak builds is inclusive and future-ready.

For Sarawak to meet its goal of universal digital access by 2030, he adds, the state government will need to ensure that AI can personalise services for diverse populations, including those living in rural areas.

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