Malaysia Digital Economy Corporation (MDEC) has described Malaysia’s Budget 2025, themed ‘Madani Economy: Negara Makmur, Rakyat Sejahtera’, presented by Prime Minister Dato’ Seri Anwar Ibrahim last Friday, as a ‘forward-thinking’ budget that further strengthens the foundation of the nation’s digital economy.

MDEC Chief Executive Officer Anuar Fariz Fadzil said the budget provides significant support to further accelerate Malaysia’s digitalisation, encourage adoption of artificial intelligence (AI) and drive inclusive growth, further positioning Malaysia as a leading digital hub within the ASEAN region.

“The Madani Budget 2025 comes at an apt time as Malaysia prepares to chair ASEAN 2025,” said Anuar.

“With strategic initiatives in place, Malaysia is ‘future ready’ and well-equipped to drive regional collaboration in key areas such as AI, the digital economy and innovation, strengthening our role in ASEAN and beyond. The proposed budget provides incentives to both local and foreign investors to continue investing in Malaysia, especially in high- value activities including digital services,” he added.

Anuar also added that the Madani government is strategically leveraging Malaysia’s strengths to further drive digital transformation and economic growth for the country.

“Malaysia’s key strengths are, among others, our strategic location, multicultural and English-speaking workforce, investor-friendly environment and stable government.”

Our small and medium enterprise (SME) community also stands to benefit from initiatives to embrace digital tools for greater productivity and operational efficiencies, thereby enabling them to ‘survive and thrive’ in an increasingly competitive global economy.

The 2025 Budget builds upon the strong foundations of Malaysia’s digital economy, with growth expected to exceed the 25.5% contribution to national economy GDP by end-2025.

Minister of Digital Gobind Singh Deo had described the Madani Budget 2025 as ‘one that prioritises the well- being and prosperity of the rakyat’.

“The initiatives in Budget 2025 will continue to support the Ministry of Digital in leading digital transformation efforts, creating an efficient and secure national digital ecosystem, boosting the country’s digital economy and narrowing the socio-economic gap among Malaysians,” said Gobind.

FDIs from Tech Giants

A significant highlight of Budget 2025 was the successful attraction of US$ 16.9 billion in investments from global technology giants, including AWS, Microsoft, Google and Oracle. This achievement, a result of a collaborative effort among ministries and agencies – including MDEC – underscores Malaysia’s status as a regional gateway for cloud infrastructure and a key player in the global digital economy.

“These investments will catalyse job opportunities for the rakyat, while upskilling initiatives and the establishment of centres of excellence are set to enhance Malaysia’s standing within Southeast Asia’s digital landscape,” said Anuar.

On the AI front, Anuar said the government’s RM10 million allocations to the National AI Office and RM50 million for AI education demonstrates a strong commitment to advancing AI and building a skilled talent pipeline.

“These efforts will accelerate AI adoption and ensure Malaysia leads in AI innovation and ethical development across the region,” said Anuar. “Our leadership in establishing the ASEAN AI Safe Network also brings to life our proactive approach to ethical AI development.”

“MDEC is committed to working alongside the government to ensure that AI technologies are deployed ethically and responsibly, securing Malaysia’s digital future through collaboration among academia, industry, public institutions and the rakyat,” he added.

Anuar also said that the Digital ID initiative is set to play a crucial role in enhancing digital trust and security, providing the rakyat and businesses with a secure, reliable method for online identity verification.

Nurturing Malaysia’s ‘Culture of Innovation’

The RM1 billion National Fund-of-Funds and RM1 billion Pioneer Fund by KWAP are critical initiatives to support Malaysia’s startup ecosystem.

“MDEC welcomes the additional RM65 million for Cradle Fund to expand regional and global potential for local startups, as well as the RM15 million matching grant to encourage collaboration between government-linked companies (GLCs) and startups through corporate venture capital,” Anuar said.

Budget Commentary by Digital Industry

Kenneth Lai, Vice President, ASEAN, Cloudflare

 “The measures announced in Malaysia’s 2025 Budget will help grow the country’s tech workforce, strengthen   cybersecurity, and give people and businesses the confidence to safely navigate the digital world, allowing them to take advantage of the opportunities in a digital economy. 

Cloudflare is encouraged by the additional resources – both funds and talent – being funnelled to the National Cyber Security Agency and National Scam Resource Centre to bolster cybersecurity and anti-scam efforts, and to Institutes of Higher Learning (IHLs) to spur the development of STEM talent to capture future opportunities in areas like AI, cybersecurity, and semiconductors.”

Tash Stamatelos, Vice President, BlackBerry Cybersecurity APAC

“Skills and security were key themes in Budget 2025. Malaysia’s additional RM1 billion investment in strategic funds to enhance local talent and support high-value commercial ventures will ensure the nation has the necessary capabilities to meet its digitalization ambitions.

Furthermore, the allocation of RM50 million to expand AI-related education at research universities, along with RM20 million to UiTM to produce more E&E engineers, highlights the government’s commitment to boosting participation in critical growth sectors like semiconductors. With 2025 designated as the Year of Skills, prioritizing the development of a highly skilled, future-ready workforce is rightly a major focus.”