ARTIFICIAL intelligence (AI) adoption in Malaysia has grown by 35 per cent year-on-year, with around 2.4 million businesses now integrating AI, according to a report by Amazon Web Services (AWS), an Amazon.com company.
The “Unlocking Malaysia’s AI Potential” report revealed that adoption increased to 27 per cent this year from 20 per cent in 2024, representing roughly 630,000 businesses embracing AI this year – more than one every minute.
Despite the rapid uptake, 73 per cent of businesses continue to focus on basic applications, while only 31 per cent of startups and 15 per cent of large enterprises are developing entirely new AI-driven products, the report noted.
It highlighted that combining the agility and innovation of startups with the scale and resources of large enterprises could unlock Malaysia’s full AI-driven economic potential.
The productivity and economic impact of AI appear significant. Some 65 per cent of Malaysian businesses reported higher revenue, with an average increase of 19 per cent, while 72 per cent cited notable productivity gains.
“Additionally, 67 per cent of respondents expect cost savings averaging 15 per cent,” the report said.
Conducted in collaboration with Strand Partners, the study surveyed 1,000 business leaders and 1,000 members of the public across Malaysia to assess the scope and outlook of AI adoption.
AWS Malaysia country manager Hussein Mohd Ali said the nation’s AI ecosystem is developing a natural specialisation that creates a powerful cycle of innovation.
“Startups build new AI products and business models, enterprises prove these solutions can scale and the public sector acts as a ‘trust multiplier’ that encourages wider adoption.
This feedback loop creates market demand that fuels further innovation. For this cycle to reach its full potential, we must address the skills gap; only then can we accelerate the entire country’s digital economy,” he said during a media briefing.
Hussein emphasised that skills development is vital to overcoming existing limitations. The report showed that 52 per cent of businesses identified a lack of skills as a major barrier both within and outside their organisations.
“Currently, 65 per cent of businesses have reported revenue gains, averaging up to 19 per cent from AI adoption. That’s why enhancing skills is so important,” he added.
Looking ahead, Hussein said AWS is committed to working with customers across all segments to provide global infrastructure and enable mass digital scaling, further boosting AI adoption in Malaysia. - November 4, 2025
