By Yasmin Ramlan
SHAH ALAM, Nov 26 — The 2025 Selangor Budget has unveiled an ambitious initiative focused on artificial intelligence (AI), marking a major stride in incorporating cutting-edge technology into the state’s governance and economic growth.
The initiative seeks to leverage AI to improve the efficiency of government services and stimulate economic growth across key sectors like healthcare, education, and finance.
A white paper to be tabled by the state administration will detail a comprehensive strategy and address the societal impacts of AI while ensuring alignment with national goals.
Speaking to Selangor Journal on the newly-announced effort, Prof Datuk Rajah Rasiah of the Asia-Europe Institute said that while the move goes hand-in-hand with national objectives, it also showcases the state’s leadership in spearheading progress, highlighting its pivotal role in driving the nation’s growth.
“I see it as the tweaking of state policy to meet national goals in the 2025 Federal Budget delivered by Prime Minister Datuk Seri Anwar Ibrahim on October 18.
“Being the most developed state in Malaysia, it is good that Menteri Besar Dato’ Seri Amirudin Shari sees it as the state’s role to spearhead the country’s development,” he said.
During the tabling of the budget, Amirudin announced a collaboration with Google to launch the AI Trailblazers programme, which aims to enhance the use of advanced technologies across a host of processes.
“The focus on five initiatives — namely AI and education, upholding the vision of a sustainable environment and infrastructure, cultivating a caring state, championing efficient and credible governance, and revitalising culture, the economy, and youth development — reflects noble aspirations. Therefore, it should be supported.
“If implemented effectively, Selangor will continue to shape Malaysia’s frontiers of economic development,” Rajah said.
Kotak Sakti chief executive officer Erhan Azrai echoed the same sentiment, emphasising that the collaboration with a major tech company like Google will bring significant benefits to the industrial sector in Selangor.
“In this industry, there are five aspects to consider: first, our ability to access affordable computing power and memory; second, the availability of data; third, our capability to deploy these technologies; fourth, the talent needed to process or build AI; and fifth, the type of infrastructure available in a country.
“When there are investments from companies like AWS (Amazon Web Services), Google, or Microsoft to build AI data centres in this country, it is evident that these companies bring significant benefits to us. “Collaborations with these companies are highly beneficial for Selangor,” he said during SelangorTV’s 'Hai Selangor' programme recently.
Erhan said with Selangor and the Klang Valley having many universities, factories, enterprises, and financial institutions, collaborations with these tech giants can enhance AI talent development and drive innovation.
“Such partnerships are viewed as highly beneficial for the state’s industrial growth and technological advancement,” he stated.
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Figurines with computers and smartphones seen in front of the words ‘Artificial Intelligence AI’ in this illustration taken on February 19, 2024. — Picture by REUTERS[/caption]
Cybersecurity concerns
On November 15, Amirudin unveiled that the state government will table a comprehensive white paper on AI next year, aiming to address both the opportunities and challenges posed by the emerging technology.
He said the Selangor Research Institute will lead the development of the white paper, which will examine AI’s wide-ranging impact on the state’s socioeconomic landscape.
The document is expected to emphasise universal AI adoption across all economic sectors, stressing its role in optimising processes, improving product quality, and fostering innovation.
Rajah said the white paper could also establish Selangor as a global hub for artificial intelligence, comparable to Silicon Valley or Bangalore, by incorporating AI into key sectors such as healthcare, education, finance, manufacturing, and services.
“One can add to that Route 128, Hsinchu Science Park, Shenzhen (China), and Technopolis. Instead of starting from simply readiness assessment tests and excluding those not ready, the white paper must bring to all economic actors — firms, farms, organisations, government agencies, and consumers — the understanding and use of AI.
“It has to be drummed across to all that catching the wave of AI is essential to ride with the synergies it creates while shunning it will strangle them in the IT divide,” Rajah said.
However, Erhan and Rajah opined that the white paper, while setting clear targets and review mechanisms to ensure widespread adoption, must also address cybersecurity concerns.
This approach, while aiming to enhance inclusivity and effectiveness in integrating AI into various aspects of society and the economy, will also provide protection to all users.
“The technology we develop carries the potential to harm individuals if not approached responsibly. Therefore, it is crucial to consider the role of developers and their accountability in the creation process. Additionally, broader societal implications must be evaluated during development.
“Furthermore, as a community, we must determine whether regulation is necessary to manage these technologies effectively. Addressing these three aspects is essential for responsible innovation,” said Erhan.
Rajah said that Malaysia can learn from Singapore’s approach to AI integration by adopting rigorous selection processes, continuous monitoring, and swift corrective actions to address challenges.
On top of that, promoting integrated cluster organisations could enhance networking and optimise resource use for effective implementation.
Meanwhile, to achieve success, he said Selangor should emulate the robust networking systems of Silicon Valley and Bangalore, which connect key knowledge hubs and stimulate innovation.
Leveraging AI, he added, can accelerate this connectivity, driving the adoption of Industry 4.0 technologies and fostering economic growth, particularly among SMEs and individual innovators.
“AI only makes that much faster and seamless the driving of industrial revolution 4.0 technologies,” he said.
Touching on the readiness to develop AI in the state, Erhan said the cost of implementing AI in Selangor is significantly impacted by its power usage, which is 10 times higher than typical technologies.
“This necessitates infrastructure considerations, such as cooling systems and electricity supply to support the high energy demands of AI operations.
These factors highlight the importance of planning to accommodate the growing use of AI in the state,” he said.
However, he noted that while the RM5 million allocation announced in the state budget is significant, it remains relatively modest within the larger framework of AI advancement.
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A sign at the World Artificial Intelligence Conference in Shanghai, China, on July 6, 2023. — Picture by REUTERS[/caption]
