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AI is a $757 billion global market reshaping economies, geopolitics, and industries. Malaysia is racing ahead with a National AI Office, billions in R&D, and a new Action Plan but is it enough? Fortune Asia’s Nicholas Gordon joins us to unpack the global AI power shift, Malaysia’s competitive edge, and the ethics that will define the future.
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00:00All right, now we're diving into one of the most transformative forces of our time,
00:04artificial intelligence. It's no longer a buzzword. Globally, AI is projected to become
00:09a severe $157 billion America, a market by 2025, creating 12 million jobs and reshaping
00:16industries, economies and also geopolitics. So from supply chains to investment strategies,
00:22AI is rewriting the rules of competition and governments are racing to strike the right
00:27balance between innovation and also ethics. Malaysia is seizing this moment with the National
00:32AI Office or NIO 2021 until 2025 roadmap and 5.9 billion ringgit in R&D investments across
00:40agriculture, healthcare and also education. But big questions remain. How do we harness AI to
00:47strengthen our economy, cultivate world-class talent and improve lives? The stakes are high.
00:52AI could add 530 billion ringgit to Malaysia's economy by 2030. Yet it also raises questions
00:59about ethics, talent and also sovereignty. So joining us to unpack these issues is
01:04Nicholas Gordon, the editor at Fortune Asia. Good morning, Nicholas.
01:09Good morning. Good morning. It's great to be here.
01:11Amazing. So AI is projected to contribute over 15 trillion US dollars to the global economy by 2030.
01:17And we're seeing the US, China and also the EU harden their AI strategies with China with state-led
01:24industrial policy and the EU with street AI compliance. So from your vantage point, how is
01:29AI rewriting the rules of global competition? And where does Southeast Asia fit in this new hierarchy?
01:38Well, AI is clearly kind of rewriting the rules of the game. It's probably one of the most strategic
01:43technologies to have emerged in the past kind of decade. You know, the US is rushing ahead on this.
01:49China is rushing ahead on this. Other countries are trying to carve their own space in this technological
01:56arms race. And so it'll be very interesting to see where kind of other countries, other regions like
02:01Southeast Asia try to find their own place in the development to make better and more powerful AI models.
02:09One thing to pay attention to, I think, is the development of sovereign AI, this idea that of
02:15governments supporting local AI development and local AI capability to kind of ensure that they
02:21control the model and they control how the data is used. And that's an increasingly important
02:25policy prerogative in places like South Korea, in places like Thailand. Within Southeast Asia,
02:33you are seeing countries starting to develop their own AI strategy. Singapore kind of took the lead on
02:38this in 2019. They put forward their plan to be an AI nation. Malaysia as well is also pushing forward
02:44on this and kind of investing in the infrastructure behind AI, things like data centers, things like
02:50semiconductor manufacturing. But other countries in the region, too, you're going to see the early
02:54stages of them figuring out what their AI strategies will be.
02:57But let's look at the context of Malaysia. Like I mentioned earlier, Malaysia's national roadmap 2021
03:05until 2025 is 63% complete. And the government just announced 3.29 billion ringgit in AI investments for the
03:13first half of 2025 alone. So this is to aim at the raised tax GDP contribution from 23.5% to 25.5% by year end. And plus the national AI action plan 2026 19 2030,
03:27will expand governance and also ethics frameworks. So do this moves position Malaysia as a serious AI play? Or are we still in
03:35catch up mode compared to Singapore and also Indonesia?
03:37I think it is perhaps still in catch up mode, but it's probably further ahead than some of its peers. You know, Malaysia, I think, has a great
03:47opportunity here. In that it, you know, in that it can kind of work with multiple players in the AI ecosystem, it can
03:55work with Western players, it can work with Chinese players, and be able to benefit from the advantages of both. It also has a great
04:02opportunity in terms of leveraging its existing advantages, in terms of electricity, in terms of manufacturing, and again, kind of build the
04:10build the AI infrastructure that will support kind of this new technology. And also, you know, the policymakers in Malaysia, I think, are thinking very carefully about the
04:19opportunities and the challenges that AI can bring. If you have a look at Prime Minister Anwar Ibrahim's book released over the summer, he talks a lot about the opportunities and the challenges that may come from what he
04:32ungoverned expansion of AI. So I think Malaysian policymakers are thinking very carefully about not just the opportunities, but a way to kind of protect against some of the
04:42challenges and the risks that that ungoverned expansion of AI might bring to a society.
04:47But speaking of progress, in your opinion, where does Malaysia stand in the regional landscape? And how does actually different regulatory approaches impact AI competitiveness across Southeast Asia?
04:58Well, as I said, I think we're still kind of in the early stages of this for a lot of countries in Southeast Asia. Again, Singapore has a plan. Malaysia has a plan. Thailand is investing in sovereign AI, too. So kind of those I see are the countries that are maybe kind of helping to lead the way a little bit. But everyone, I think, is thinking about, again, how to how to integrate themselves into this new ecosystem, how to take advantage of the opportunities that may come into play, and how to tap the resources that are out there to really kind of build up the
05:28AI capabilities locally, whether that's in terms of infrastructure, whether that's in terms of talent, whether that's in terms of support for startups, whether that's in terms of, again, working with other major partners around the world for AI. I think a lot of countries are thinking very carefully about this, and, you know, starting to move ahead on this, but it's still still early stages, I think.
05:47In your opinion, as well, that we want to look at the trends, because it's a dynamic landscape of AI, but what's the most significant AI driven business trends that you are actually observing in the region? And what kind of AI led innovation are you seeing from businesses in Malaysia specifically?
06:05Well, it's hard to pick just one trend, there's kind of a lot of them. But one thing that's definitely on my mind right now is energy, you know, data centers require a lot of energy. You're getting comments out of places like the United States that it's tough to expand AI infrastructure, because there's just enough, there's just not enough power out there to power the data centers that do all the inference and do all the training. I think that's gonna be a very big question going forward throughout Southeast Asia, but also particularly in Malaysia, which does have some advantages.
06:35when it comes to providing electricity. I'm also looking at kind of the spread of open a of open source AI models, particularly from China, I think an undercover story right now is the role that open source models like Alibaba's qn are playing in businesses around the region and around the world, not just in Southeast Asia, Airbnb CEO Brian Chesky came out the other day and admitted that his company is also using Alibaba's AI model in addition to other models as well.
07:05So then when it comes to businesses, I think there's a question of how you get more employees to adopt AI, you know, executives love it, entry level employees, I think are very interested in this, they're using it themselves, but it's kind of middle managers, people who are actually having to put these plans into practice, that I think are still struggling a bit on how to adopt AI into their own processes without necessarily threatening their own jobs and their own work.
07:29So there's a lot of tricky things to balance here when it comes to businesses and how they think about AI. And you know, and we're going to be talking about all of these things at Fortune, we have several AI events throughout the year, you know, we have brainstorm AI in Singapore over the summer, and we're going to be discussing all of these issues in Malaysia next week at the Innovation Forum from November 77, whether it's data centers and power, or how companies using AI or open source versus closed source, these are all topics we're going to be covering next week on the 70th and 18th in Kuala Lumpur.
07:57But in spite of the challenges that I mentioned earlier, talent is one of the most important thing when it comes to AI. Speaking of which, Huawei has pledged to train 30,000 Malaysian AI professionals and also Talent Corp launched the MyMahir National AI Council that is to align the skills with industry needs.
08:16Yet cognizant wants the Malaysia race remaining an AI user rather than AI producer. So what structural changes, perhaps in terms of education, immigration, R&D incentives, that must Malaysia implement to avoid a brain drain and truly lead in AI innovation?
08:33I do think talent is going to be a very big question going forward. It's whether to keep talent, how to retain talent, how to make sure that Malaysia has the talent it needs to, you know, build and operate these AI models at home.
08:50And unfortunately, I don't quite have the answer in terms of what Malaysia's education strategy should be, but it would probably include a mix of kind of ensuring that there is an ecosystem that can keep talent at home, give them opportunities at home to work on, to build their own AI startups, to kind of develop their own models, to experiment with open source models and make it work in the Malaysian context.
09:15I also think that there's an opportunity here, again, to kind of build Malaysian AI for Malaysia. Again, this push towards sovereign AI, I think, is going to become a much bigger trend over the next few years as countries outside of the US and outside of China start to think about how they can make AI work better for them, work better for their people and work better for their businesses.
09:35So in terms of media, as an editor, Nicholas, how can media actually cover AI both ethically and also accurately at the same time? And what is Fortune doing in this space? How are you driving the AI conversation now?
09:47Well, I think when it comes to covering AI accurately, I mean, it's a business like any other. So you don't necessarily have to think about covering it in some in some specific special way. It's a new technology. It's very exciting. But it's a business like any other. You know, there's a potential for massive social and economic change thanks to AI. And it'd be wrong for reporters and media outlets to ignore that. But there's also a lot of hype in the industry. You know, developers often talk about how scared they are of what they've created.
10:17Which can maybe be a roundabout way of talking up how powerful their product is. So it's worth being sober minded about this, too. So I guess for people who are thinking about AI, studying AI, talking about AI, you know, one shouldn't ignore the possibility of kind of pretty big social and economic change and the disruptions that might come to that come from that. But they should also be wary of hyping it up too much, you know, of being the thinking that it's going to really kind of radically transform everything that we do.
10:46Some of these existential risks people talk about. It's worth being a little bit, I think, sober minded about what this technology is. So it's an interesting space. It's kind of a difficult needle to thread. But we in the media, I think, have a lot of work to do and can do a lot in illuminating this for people.
11:01And as I mentioned, you know, us at Fortune, we cover AI consistently throughout the year. You know, we're covering all the big players, whether that's OpenAI or Anthropic, through to writing about DeepSeq and Alibaba.
11:12You're writing about Singapore and Malaysia's work in AI. We cover that pretty consistently.
11:16And we are and we convene several events where we bring together experts in AI, both in terms of developers, large businesses, researchers, and have them discuss kind of all of these issues, the opportunities that AI brings and how to maybe have guardrails against some of the risks that might emerge.
11:34I totally understand where you're coming from, Nicholas, because no matter how fast we're moving, AI somehow always moves faster.
11:42But looking ahead to 2026 to 2027, what story about Southeast Asia and AI that do you think will be most important?
11:49Are there any exciting developments you have observed in Malaysia, especially when Malaysia is chairing ASEAN this year and spearheaded the ASEAN AI Safety Network to promote ethical innovation?
11:59So how do you see regional cooperation evolving? Will ASEAN harmonize AI standards or will national interests dominate?
12:08I think a place like Malaysia has the opportunity to actually maybe do both.
12:12You know, again, is to kind of leverage its advantages to kind of make AI work for the country, to make AI, to help Malaysia fit into this kind of global ecosystem for this new technology.
12:22But also, again, ASEAN is an asset for Malaysia.
12:26You know, by working together, they have greater leverage and greater resources to develop kind of, again, to develop these AI systems that work best for Southeast Asians.
12:37One question that will be on my mind going forward is, you know, as AI becomes more efficient, as places like Deep Seek in China prove that you can have really powerful AI models without needing to spend lots and lots and lots of money on computer chips,
12:50whether or not those insights and those lessons make their way to more regional economies and local players, you know, like ASEAN and can the advantages that can be gleaned from training powerful models with fewer resources,
13:05whether other countries can take advantage of that and build powerful AI models for themselves, again, without needing to spend huge amounts of money on very expensive AI processors.
13:15All right. That was Nicholas Gordon, the editor at Fortune Asia.
13:20And indeed, AI isn't just a technological revolution, it's a strategic one.
13:24And Malaysia's choices today will define its role in the global economy for decades.
13:29And you can find this whole discussion on all of our social media platforms.
13:32And thanks again, Nicholas. And for now, we'll have to go for a short break.
13:36Stay tuned for more updates after this with my colleague, Ibrahim Sani.
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