Malaysia’s AI adoption has surged to more than 3.4 million businesses, with 38% now consistently using at least one AI tool compared with 27% last year, according to an Amazon Web Services (AWS) study.
The study, conducted by Strand Partners, found that nearly one million additional businesses adopted AI over the past year, equivalent to almost two businesses every minute.
However, adoption has yet to translate into widespread scaling, with 67% of AI adopters still relying mainly on basic applications such as public chatbots and ready-made tools. Only 19% have a formal strategy to scale AI across multiple business functions.
The study identified locally-based software providers as one of the key enablers, with 69% of businesses saying local software providers and AI solution developers are important to their AI adoption.
More than half, or 57%, primarily source AI capabilities through external providers, consultants or software vendors. Among businesses working with these providers, 43% use them to develop AI strategies, 40% for systems integration and maintenance and 31% for workforce training.
Financial services and manufacturing recorded the highest adoption rates at 53% and 50% respectively, compared with 38% across the wider business sector.
Financial services showed stronger AI maturity, with 64% of businesses moving beyond experimentation and 42% having a scaling strategy. The sector also recorded a formal AI governance framework adoption rate of 39%, compared with 24% across all businesses.
Manufacturing, meanwhile, remains at an earlier stage despite 80% expecting AI to transform the industry. Some 57% are still exploring or experimenting with AI, while only 15% have a formal AI strategy.
Across the wider economy, just 30% of businesses have clearly defined accountability for AI initiatives, 27% conduct regular monitoring or audits and 18% have documented escalation processes.
The study also found that 72% of businesses would be more likely to increase their AI use if public-sector adoption grows, while 74% believe government leadership will be important in accelerating AI adoption overall.
“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.
