Malaysia Is Looking to AI to Get Its Mojo Back

Five decades after electronics gained a toehold in Malaysia and helped drive years of stellar growth, leaders are again putting their faith in chips. Artificial intelligence, and the competition to present as the most friendly destination for investment, stands to give the place a much-needed lift. Once seen as a template for developing economies, the country now contends with a slower expansion and fractious politics. The trick will be sorting the AI hype from the substance — and whether Malaysia can avoid some own goals.

Prime Minister Anwar Ibrahim recently made his pitch. The government promised 25 billion ringgit ($5.3 billion) to support the semiconductor industry. Anwar nodded to a long-standing challenge, which is the need to graduate from a center for assembly and testing to more lucrative areas like design. The premier is also betting that Malaysia, one of the biggest chip exporters to the US but with a history of cordial ties to China, can be a player in an era when supply chains are increasingly sorted along national security lines. “I offer our nation as the most neutral and non-aligned location,” he said.