Gen AI: Smart enough to unlock US$113.4b for Malaysia?

In the dynamic landscape of artificial intelligence (AI), Generative AI (Gen AI) stands out as one of the most exciting and promising area for innovation. This cutting-edge field is revolutionising our understanding of creativity, pushing the boundaries of what machine can envision and create.
The World Economic Forum defines Gen AI as a category of AI algorithms that generate new outputs based on the data they have been trained on. It uses a type of deep learning called generative adversarial networks and has a wide range of applications, including creating images, text, and audio.
Gen AI has its supporters and detractors: yes it certainly helps get ideation rolling, but also brings up issues with intellectual property and ethics. But what is undeniable is almost everyone has heard of it or given it a try.

Though ChatGPT is the most visible and publicly available Generative Artificial Intelligence (Gen AI) solution, it is far from the only one. Graphic designers use tools such as Dall-E and Midjourney for initial conceptualisation, while business analysts with zero coding experience can forecast product demand via Amazon SageMaker Canvas.

AI in Malaysia

The possibilities are endless for this technology which is projected to unlock US$113.4 billion in productive capacity in the Malaysian economy, equivalent to one-quarter of GDP in 2022.
Malaysia has experienced rapid growth in Generative AI, driven by increasing investment from companies and strong government support for Gen AI-related initiatives aimed at boosting digital literacy and fostering a supportive ecosystem. The Ministry of Science, Technology and Innovation (MOSTI) launched Malaysia AI Roadmap to strengthen the country’s AI capabilities from 2021 to 2025. This roadmap serves as a guideline to develop an AI innovation ecosystem and leverage AI as a critical driver for productivity and maintain competitive edge. 

The Malaysian government has been proactively integrating AI into government services. In September 2023, a report commissioned by MyDIGITAL found that 65% of workers in Malaysia will potentially use generative AI between 5% to 20% for their regular work activities. Many are already using generative AI tools to improve efficiency and optimise productivity, automating repetitive tasks, allowing employees to focus on more strategic initiatives.
Initiatives such as "AI for Rakyat," highlight the government's commitment to creating a conducive environment for AI development while educational institutions are focusing on AI and digital skills, ensuring a steady supply of skilled professionals.
Greater KL's thriving business ecosystem fosters collaboration and innovation that is essential for AI growth. The presence of tech giants like Microsoft, Google, and Amazon Web Services further strengthens this ecosystem.

Additionally, the government offers various incentives to attract foreign investments in the tech and AI sectors, including tax incentives, grants and funding programs designed to support innovation and business growth. These incentives, combined with the country's strong digital infrastructure, skilled workforce, and strategic location, position Malaysia as a leading destination for the generative AI sector, creating a fertile ground for innovation and expansion.

Source: eCentral

Building AI research capacity

Source: The Stars

While there is no specific policy with regards to Gen AI in Malaysia, private and public sector actors have taken to building capacity in the education space. Budget 2024 allocated RM20 million to establish the country’s first AI faculty at the University of Technology Malaysia. 

On the private sector side, HELP University’s Faculty of Computing and Digital Technology, and Alliance Bank Malaysia Bhd announced their collaboration to introduce the first research laboratory on Gen AI in Malaysia in November 2023. 

These universities are responding to active corporate demand for Gen AI capabilities, as evidenced by the various strategic partnerships and investments into Gen AI by both Malaysian companies and MNCs across different business functions.

Gen AI’s Applications

Saying hello to vernacular AI models

In February 2024, Amazon Web Services (AWS) signed separate deals with Malaysian telcos CelcomDigi and Maxis to collaborate on Gen AI solutions to develop Bahasa Melayu algorithms with large language models (LLMs), which would then be turned into chatbots and other solutions to communicate with their multilingual and culturally diverse customer bases.
CelcomDigi will also establish an AI Sandbox, driven through its Innovation Centre, for its employees to experiment, innovate, and implement Gen AI solutions. Meanwhile, Maxis will leverage 5G and Gen AI technologies into real-world business use cases for its retail, manufacturing, logistics and financial services customers.

Co-piloting the finance sector

The country’s largest fund manager Permodalan Nasional Bhd (PNB) is a supporter of Microsoft 365’s chatbot Copilot, thanks to its ability to decipher large amounts of context and generate relevant input in a matter of minutes, or even seconds.

The financial services industry is also no stranger to paperwork and meetings. At AmBank, Copilot’s recap function helps cut 40% of the time spent taking minutes. It listens to, captures, and summarises meeting discussions and action items in a clear and concise way, providing the minutes within an hour after the meeting ends. This liberates users from mundane tasks and allows them to focus on more strategic and impactful work.

Co-piloting the finance sector

In May 2024, Microsoft announced that it would invest RM10.5 billion over the next four years in Malaysia, including building cloud and AI infrastructure as well as creating AI skilling opportunities for an additional 200,000 people in Malaysia.

Microsoft will also partner the Government to establish a national AI Centre of Excellence and enhance the nation's cybersecurity capabilities.

Avanade sets up SEA’s first Gen AI lab

Avanade, a leading provider of cloud and advisory services, AI and sustainable industry solutions across the Microsoft ecosystem, is also a key investor in Greater KL. In September 2023, it announced that its first Gen AI lab for Southeast Asia is located within the Avanade Malaysia office in Kuala Lumpur.
The lab, which also acts as a centre of excellence, will help organisations accelerate their AI readiness through experimenting and co-creating Gen AI solutions responsibly and build up their capabilities to extract business value from their data.

Cognizant builds up Gen AI skills among women

In March 2024, digital transformation provider Cognizant expanded its AI partnership with Google Cloud to adopt Google’s Gen AI chatbot Gemini. Through Gemini, Cognizant’s developers will be equipped to write, test, and deploy code faster and more effectively with the help of AI-powered tools, improving the reliability and cost efficiency of building and managing client applications.

Cognizant’s embrace of Gen AI is also reflected in its ESG outreach programme. Cognizant Malaysia held its Gen AI Skills for Women Programme in March and April 2024, aimed at empowering over one million individuals with fundamental knowledge and skills in Gen AI.

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