Malaysia’s AI adoption has surged to more than 3.4 million businesses, but most companies are still using the technology for basic tasks rather than deploying it across their operations, according to an Amazon Web Services (AWS) study.
The study by Strand Partners found that 38% of Malaysian businesses now consistently use at least one AI tool, up from 27% in 2025. Nearly one million businesses adopted AI over the past year, equivalent to almost two every minute.
However, 67% of adopters remain focused on basic applications such as public chatbots and ready-made productivity tools, while only 19% have a formal strategy to scale AI across multiple functions.
Local technology providers could play a bigger role in closing that gap, with 69% of businesses saying locally based software providers and AI solution developers are important to their AI adoption. More than half, or 57%, primarily source AI capabilities from external providers, consultants or software vendors.
Financial services and manufacturing recorded the highest adoption rates at 53% and 50% respectively, although their AI maturity differs. In financial services, 64% of businesses have moved beyond experimentation and 42% have a scaling strategy, compared with manufacturers where 57% remain in the exploration or experimentation stage.
Governance also appears to be separating more mature adopters from the rest. Financial services has the highest proportion of businesses with formal AI governance frameworks at 39%, compared with 24% across all sectors.
Across the wider economy, only 30% have clearly defined accountability for AI initiatives, while 27% conduct regular monitoring or audits and 18% have documented escalation processes.
Public-sector adoption could also influence business confidence, with 72% saying greater government use of AI would make them more likely to increase their own adoption.
“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,” said Hussein Mohd Ali, Country Manager, Malaysia at AWS.
