AI can help boost the productivity of the Malaysian economy.
AI is a once-in-a-generation opportunity to catalyse faster economic growth, boost social inclusion and address many of society’s most important challenges. In the last few years, we have seen rapid improvements in the capabilities of AI, spurred on by the development of the transformer model architecture by Google researchers in 2017. AI will allow both businesses and workers to change how they work: saving time, learning new skills and focusing on higher-value tasks. This in turn is set to increase economic productivity, and ultimately wages for ordinary workers.
Over the last year, AI usage in Malaysia has more than doubled as AI tools become increasingly powerful in helping in day-to-day life. Like any transformative technology, it can take time for supporting workflows to be adopted and the benefits to show up in official productivity statistics – the so-called ‘productivity paradox.’ In use cases such as coding, data support and customer support, early adopters are already seeing significant time savings and efficiency gains. Over the next few years as AI goes beyond automating repetitive tasks and extends to higher value tasks, it presents a significant opportunity for Malaysia to advance its economic complexity. AI will transform industries and boost GDP, and its benefits will increasingly show up across the broader economy.
In our research, we found that AI could help power the next stage of Malaysia’s growth, boosting the economy by RM 130 billion (USD 30 billion), a 7% increase in Gross Value Added (GVA).
Taking full advantage of AI could help meet around a fifth of the Government target for annual productivity growth of
AI can help Malaysia address structural economic challenges.
Challenges
Skills
capacity.
CEOs in Malaysia see the lack of skilled workers as the biggest threat to their businesses.5 This challenge is driven by the advancement of technology, which continually brings forth new tools, processes and business models. While this creates new job opportunities, it also changes the skills required for existing roles. The current lack of skilled workers reflects an overreliance on lower-skilled labour, which in turn disincentivises automation, and hinders upskilling.
AI Solutions
AI can significantly boost the efficiency of labour and capital used in production of goods and services.
By automating repetitive tasks, AI allows workers to focus on higher value tasks, thereby boosting labour productivity. And through predictive maintenance of assets and optimising expenditure and monitoring, AI can augment capital usage.
AI can help people learn new skills and expand their career opportunities.
In early studies, we have already seen AI’s potential to boost the skills base of workers, helping them catch up with the performance of the best workers in their environments.
Google has partnered with the Ministry of Digital to transform public services.
Following a highly successful pilot program, “AI at Work,” which saw 97% of 270 participating public officers save an average of 3.25 hours weekly and 91% report higher quality work, the Ministry of Digital and Google Cloud have launched the expanded “AI at Work 2.0” initiative this year. Building on the pilot’s proven success in leveraging generative AI for tasks like drafting policy papers and communications, this new phase scales the collaboration. It makes the Google Workspace with Gemini suite of tools accessible to up to 445,000 public officers across various government agencies, signifying a major commitment to digital transformation within the Malaysian public sector.
This expanded partnership empowers public officers by integrating advanced AI capabilities directly into their daily workflows to enhance productivity and service delivery. Civil servants can now utilise Gemini in Google Workspace for context-aware content creation, analysis, and summarisation within familiar applications. The initiative also introduces specialised tools like Google Vids for creating engaging video communications, Gemini Advanced for complex problem-solving, and NotebookLM Plus for synthesising insights from extensive reports and policy documents. To ensure widespread adoption and maximum impact, Google continues to work with the Ministry of Digital to train AI Advocates within agencies, fostering peer-to-peer learning and helping to streamline routine tasks, ultimately freeing employees to focus on more strategic work that benefits citizen engagement and public services.
“The government is taking the lead in harnessing gen AI, with the right guardrails built in, to better serve the rakyat under our five-year AI technology action plan.”
YB Tuan Gobind Singh Deo
Minister of Digital
Early adopters of AI are already seeing significant boosts to worker productivity.
According to our analysis, today’s AI technologies are likely to significantly augment around 30% of Malaysian workers, boosting their productivity. By contrast, we found that less than 6% of today’s workers may need additional support to transition to new careers in the future.6 In our polling, we found early adopters of AI tools are already seeing significant benefits – for example, using Google’s AI-powered tools in Google Workspace is estimated to save the equivalent of over 10 work days a year.
By boosting productivity and allowing workers to focus on higher value tasks, AI raises the value of hours worked and creates expected potential future wage increases of over 7%.
On average, we estimate that AI could save the average worker 3 hours in administrative tasks a week.
How are Malaysians using AI?
Responses to question: Can you think of any ways you would use AI in your [personal/work] life? Answer in your own words.
Responses are edited for grammar and spelling, but otherwise unchanged.
All responses taken from a Public First survey of Malaysian adults.
Gamuda is reinventing construction with Google Cloud.
Gamuda is redefining construction by moving beyond the industry’s traditional image of being “dirty, dusty, and dangerous”7 to embrace data-driven innovation. To streamline the time-consuming tasks of market research, compliance, and document analysis, the company adopted Google Cloud’s Vertex AI. In just two months, Gamuda launched Bot Unify – a custom-built AI marketplace featuring over 100 enterprise-ready bots. Powered by Google’s AI tools, these bots enable teams to extract insights from thousands of documents, analyse workplace incidents, and generate strategic plans in days instead of weeks. This integration has unlocked a new level of efficiency, precision, and safety across Gamuda’s projects.
One of the key features of Gamuda is a dedication to safety oversight: it automatically ingests incident reports, inspection logs, and site images, then surfaces trends and high-risk patterns—like slips and equipment near-misses. This real-time insight allows Gamuda teams to identify potential hazards before they escalate, enforce proactive safety measures, and reduce on-site accidents—transforming safety from reactive clean up to predictive prevention.
To share the benefits of this transformation beyond the construction industry, Gamuda has also partnered with Google to launch the Gamuda AI Academy, equipping Malaysians with practical AI skills using Google Cloud tools. This initiative is part of Gamuda’s commitment to fostering a digitally empowered workforce and building a smarter, more resilient Malaysia.
“Without a doubt, Google has empowered all of us at Gamuda to transform the way we work. AI has redefined what’s possible for traditional industries like ours, so we can better shape the future of Malaysia for Malaysians”
John Lim
Group Chief Digital Officer,
Gamuda
Malaysia is experiencing a data centre boom.
Malaysia is set to become Southeast Asia’s fastest expanding data centre hub.8 Since 2021, the government has greenlighted 21 data centre projects, valued at a total of RM 110 billion (USD 24 billion), including Google’s USD 2 billion investment in Selangor which will support 26,500 direct, indirect, and spillover jobs in 2030.9
Investment in sustainable foundational infrastructure will have major positive spillovers into society, beyond its direct contributions to the local economy. These include enabling new digital services that Malaysians can use daily – from efficient e-wallet payments to reliable access to government services. Moreover, such infrastructure empowers developers and researchers to create solutions tailored to local challenges, from optimising traffic to improving agricultural yields, ultimately fostering new local businesses and job opportunities.
In total, we estimate being a regional data centre hub could create
(USD 1 trillion) in value for the Malaysian economy.
Share of data centre investment 2021-25.
Source: Ministry of Investment, Trade and Industry (MITI) data
How Google is contributing to Malaysia.
For over a decade, Google has been investing in AI to advance its mission to organise the world’s information and make it universally accessible and useful. From key language understanding techniques, to the Transformer architecture underlying today’s generative AI revolution, Google researchers have been behind a significant number of defining AI breakthroughs.
Today, Google is expanding access to AI for billions in Asia-Pacific through products like Maps, Search, Android, Gemini and NotebookLM, while helping businesses be more productive and connect with new customers.
Supporting this growth is Google’s infrastructure investment in Malaysia. In 2024, the company broke ground on its first data centre and cloud region in Selangor with a USD 2 billion investment aimed at meeting growing demand for AI and cloud services. The facility is expected to support over USD 3.2 billion in positive economic impact and 26,500 jobs by 2030.10
Google acts as a crucial economic catalyst: connecting businesses with customers worldwide, enhancing business productivity and giving Malaysian creators and developers new platforms through which they can reach the world. In 2024, Google Search, Google Ads, Google AdSense, Google Play, Google Cloud, and YouTube helped provide RM 12 billion (USD 2.7 billion) of economic activity for businesses.