Malaysia’s adoption of artificial intelligence (AI) has accelerated significantly, with 38% of businesses now consistently using at least one AI tool, up from 27% in 2025, according to new research commissioned by Amazon Web Services (AWS).
The findings from Unlocking Malaysia’s AI Potential 2026, a study conducted by Strand Partners, show that nearly one million additional Malaysian businesses adopted AI over the past year — equivalent to almost two businesses every minute.
This brings the total number of businesses using AI consistently to more than 3.4 million.
However, the research also highlights a gap between AI adoption and AI maturity. While adoption has expanded rapidly, 67% of AI adopters remain focused on basic applications, including public chatbots for routine tasks and ready-made tools designed to streamline existing processes.
Only 19% of businesses have a formal strategy for scaling AI across multiple functions.
The research suggests Malaysia’s next challenge is therefore not simply encouraging more businesses to adopt AI, but helping them turn adoption into repeatable and scalable capabilities.
Local software providers seen as key to scaling AI
The study identifies sector-focused software providers and AI solution developers as an important part of Malaysia’s path towards broader AI adoption.
More than half, or 57%, of businesses primarily source AI capabilities through external providers, consultants or software vendors. Meanwhile, 69% say locally based software providers and AI solution developers are important to their AI adoption.
According to the research, providers with strong sector-specific knowledge can embed AI into familiar business workflows, allowing more organisations to benefit from specialised expertise without having to develop every capability in-house.
The role of external providers also extends beyond supplying technology.
Among businesses that work with external consultants, software providers and partners, 43% rely on them to develop AI strategies, while 40% use them for systems integration and maintenance. A further 31% rely on these providers for workforce training.
This indicates that external providers are increasingly influencing how businesses approach AI — from developing strategies and establishing technical foundations to building workforce capabilities.
Financial services and manufacturing lead AI adoption
Financial services and manufacturing are currently leading AI adoption in Malaysia, with 53% of financial services businesses and 50% of manufacturers reporting that they have adopted AI, compared with 38% across the wider business landscape.
However, the two sectors are at different stages of their AI journeys.
Financial services businesses have progressed further beyond experimentation, with 64% moving beyond the experimental stage and 42% having a strategy for scaling AI.
The sector also leads in AI governance. Some 39% of financial services businesses have a formal AI governance framework, compared with 24% across all businesses.
The findings suggest that governance does not necessarily slow AI adoption. Instead, clear accountability, monitoring and escalation processes can give businesses greater confidence to deploy AI more extensively.
Manufacturers see AI’s potential but face implementation barriers
Manufacturers are similarly positive about AI’s potential, with 80% expecting the technology to transform the industry.
However, 57% of manufacturers are still exploring or experimenting with AI, compared with 34% of financial services businesses.
The research identifies several barriers to greater adoption, including technical or data challenges cited by 44% of manufacturers, workforce capability concerns cited by 41%, and limited resources cited by 37%.
Only 15% of manufacturers have a formal AI strategy, while just 13% feel fully prepared for next-generation AI.
These findings point towards a need for sector-specific AI strategies and practical playbooks to help manufacturers move from experimentation towards broader implementation.
Governance could accelerate AI maturity
Across the wider Malaysian economy, AI governance remains relatively underdeveloped.
Only 30% of businesses have clearly defined accountability for AI initiatives, while 27% conduct regular monitoring or audits and 18% have documented escalation processes.
At the same time, 47% of businesses say they want practical frameworks or templates to help them implement AI governance.
The research suggests that businesses may not necessarily need more regulation, but rather practical support to operationalise existing frameworks and integrate governance into day-to-day AI deployment.
Financial services provides one example of how governance can support rather than restrict AI adoption. Operating in one of Malaysia’s most highly regulated environments, the sector has nevertheless progressed further in embedding AI across business operations.
For businesses looking to move beyond AI pilots, the study suggests that investment in dedicated governance teams, technology tools and executive sponsorship could help support more mature adoption.
Public-sector AI adoption could build business confidence
Government adoption of AI could also play an important role in encouraging wider business adoption.
According to the AWS research, 72% of Malaysian businesses say greater public-sector AI adoption would make their own organisations more likely to increase their use of AI.
Meanwhile, 74% believe government leadership will be important in accelerating AI adoption across Malaysia.
Businesses say public-sector deployment could help build trust, demonstrate safe and responsible AI use and provide practical examples that other organisations can follow.
This positions government adoption not only as a means of improving public services, but also as a potential trust multiplier for the wider Malaysian digital economy.
AWS: Software providers can become Malaysia’s AI scaling engine
Hussein Mohd Ali, Country Manager, Malaysia at AWS, said software providers could play a central role in helping Malaysia move from widespread AI experimentation towards practical, economy-wide capability.
“Software providers are the scaling engine Malaysia needs. Sector-focused providers that embed AI into the tools businesses already use are the fastest way to move an entire economy from experimentation to real capability,” he said.
Hussein added that governance and public-sector leadership are closely connected to ensuring AI adoption becomes sustainable.
“AWS is building for exactly this: investing in local partners, training the workforce to support them, and delivering the technology foundations that let software providers bring AI to every industry and businesses in Malaysia,” he said.
Research highlights Malaysia’s next phase of AI growth
The Unlocking Malaysia’s AI Potential 2026 study was conducted by Strand Partners for AWS, surveying 1,000 members of the Malaysian public and 1,000 business leaders.
The business respondents were representative of business size, sector and region, with participants comprising founders, CEOs and C-suite executives.
For the study, businesses were classified as AI adopters if they consistently used at least one AI tool. SMEs were defined as businesses with fewer than 250 employees for the purposes of regional comparison across Asia Pacific and Japan.
The findings point to a clear next stage for Malaysia’s AI economy: moving beyond adoption towards scale.
With millions of businesses already using AI, the research suggests that stronger AI governance, locally based software providers, workforce capabilities and greater public-sector adoption will be critical in turning Malaysia’s growing AI momentum into sustained digital and economic growth.
