Malaysia's Budget 2027 could shape AI future, says Chmiel
Wed, 13th May 2026 (Today)
Georg Chmiel said Malaysia's Budget 2027 could determine whether the country becomes a regional leader in artificial intelligence, and argued the policy groundwork needs to begin now.
Chmiel, chairman of Chmiel Global Advisory and a board member of the World Digital Chamber, described the next budget cycle as a critical juncture as governments across Southeast Asia compete for AI investment, talent and industrial growth.
He argued Malaysia is entering a narrow window in which decisions on skills, infrastructure and regulation could shape its economic position for years. The warning comes as the country attracts rising levels of digital investment and seeks to deepen its role in semiconductors and advanced manufacturing.
"Budget 2027 could be a defining moment for Malaysia. The AI economy is accelerating rapidly, and countries that act early will lock in long-term advantages in investment, talent, and industry leadership," Chmiel said.
Malaysia has emerged as a significant destination for AI-related funding in the region. According to the e-Conomy SEA 2025 report by Google, Temasek and Bain & Company, the country drew about USD $759 million, or 32% of Southeast Asia's total AI funding, between late 2024 and early 2025.
Large technology groups including Microsoft, Google, Amazon Web Services, Oracle, ByteDance and Nvidia ecosystem partners have also expanded their presence in Malaysia, reinforcing the country's place in the semiconductor and AI supply chain.
Separate figures from the Malaysia Digital Economy Corporation showed approved digital investments of RM54.13 billion in 2025, with projections for more than 21,800 high-value jobs. Digital Minister Gobind Singh Deo has previously said AI could add between RM13 billion and RM20 billion a year to Malaysia's gross domestic product by 2030.
SME pressure
The benefits of AI adoption may not be spread evenly across the economy. While larger companies are moving ahead with automation, analytics and customer-facing systems, many smaller firms remain at an earlier stage of digital transformation, Chmiel said.
Small and medium-sized enterprises account for almost 97% of Malaysian businesses and contribute about 38% of GDP. Their ability to adopt AI is therefore a national economic issue, not a niche technology concern, he argued.
"Many SMEs are still navigating basic digital transformation," Chmiel said. "AI adoption can feel costly and complex without the right incentives, training, and access to funding."
He called for a broader national response that includes reskilling programmes, adoption incentives and easier access to AI tools. Without that support, the digital divide between large and small businesses could widen, he warned.
Workforce shifts
The debate also extends to jobs. Malaysia recorded more than 4,700 job losses in early April 2026, reflecting restructuring linked to automation and digital transformation, according to figures cited by Chmiel.
He said AI will create opportunities as well as disruption, but warned that workers will need support to move into new roles. In his view, large-scale retraining and stronger development of domestic tech talent should rank high on the policy agenda.
Other priorities he identified included support for local AI start-ups, a stronger position in chips and advanced manufacturing, and clearer rules on cybersecurity, data use and ethical AI. He also pointed to the need for closer coordination between government, industry and universities to move research into commercial use.
The mix of issues suggests Budget 2027 will be judged on more than headline spending. For Chmiel, the real test is whether Malaysia can build what he described as a complete AI ecosystem rather than remain an attractive but partial destination for investment.
"The AI economy is moving at extraordinary speed," Chmiel said. "Countries that move early will not just attract more investment, they will define the standards, build the ecosystems, and lock in the talent that others will struggle to catch up with."
He said Malaysia already has several advantages, including infrastructure, investor interest and an expanding digital economy, but argued those assets will not be enough on their own if policymaking and execution move too slowly.
"Malaysia has strong fundamentals, infrastructure, investor interest, and a growing digital economy. But in the AI era, foundations are only the starting point. The real question is how fast we can connect talent, policy, and industry into one coordinated national direction."
At the centre of his argument is speed. Southeast Asian governments are competing to secure data centre spending, semiconductor activity, skilled workers and AI research, and Chmiel said international capital is likely to move quickly toward countries that set clear priorities and follow through.
"AI will not wait for anyone. And neither will global capital. The countries that act decisively now will be the ones shaping the future economy. Malaysia is at a genuine crossroads. In this new era, standing still is no longer a neutral position, it is a disadvantage," Chmiel said.