[OPINION] Bridging East and West: How Malaysia can seize the AI and climate initiative?

BUILDING upon the vision outlined in my previous editorial: “Active Neutrality in the Pursuit of AI Innovation”, Malaysia has the potential and unique opportune moment to establish itself as a global leader in artificial intelligence (AI) and climate innovation. This leadership opportunity arises from Malaysia’s strategic position between the U.S. and China, its expanding digital infrastructure, and its established financial and manufacturing expertise. By actively nurturing AI-driven solutions for pressing environmental challenges, Malaysia can simultaneously strengthen its economic resilience and reinforce its international standing as a responsible stakeholder in global development.

President Donald Trump’s recent announcement of a joint venture with SoftBank Group, OpenAI, and Oracle—targeting up to US$500 billion in AI infrastructure investments—highlights the accelerating race for AI supremacy (“Trump unveils AI investment plan with OpenAI, Softbank, Oracle”). Dubbed “Stargate,” the initiative plans to rapidly deploy new data centers, streamline construction through emergency declarations, and secure massive energy resources to fuel AI development. While the exact breakdown of fresh capital remains unclear, the sheer scale of the proposed projects signals America’s intent to remain at the forefront of AI innovation.

This surge of U.S.-based investment underscores the urgency for Malaysia to solidify its own AI strategies. By harnessing its active neutrality between global powers, Malaysia can attract complementary ventures from tech giants—especially those seeking diversified footprints beyond the U.S. or China—and ensure it remains a relevant hub for cutting-edge AI and climate solutions.

A Comprehensive Leadership Strategy

Malaysia’s leadership strategy must focus on developing vibrant ecosystems that integrate cutting-edge innovation with robust regulatory frameworks, inclusivity, and sustainability. This holistic approach ensures that technological advancements do not merely serve short-term economic goals but also contribute to long-term societal well-being. Crucially, strategic investments should be made in cultivating.

Crucially, strategic investments should be made in cultivating Leading Talent, securing Best-in-Class Intellectual Property (IP), and pioneering infrastructure innovations such as AI-powered Data Centers, Mutual Credit Clearance (MCC), and the Multilateral Nations Climate Club (MNCC). When combined, these initiatives position Malaysia at the crossroads of global AI and climate innovation, enabling the nation to respond proactively to the challenges of the 21st century.

Malaysia’s leadership in AI and climate innovation will be anchored upon the following:

1. Energy-Efficient AI Data Centers: Developing world-class, energy-efficient AI data centers provides the essential backbone for AI innovation and data sovereignty, ensuring that Malaysia becomes a trusted partner in global AI development. By prioritizing safe, clean and efficient energy solutions like solar, hydro, and other renewables—including nuclear (“Nuclear Power As An Option in Malaysia’s Energy Mix” and “Unlocking Malaysia’s Nuclear Future: The BRICS Advantage”)—these data centers can reduce operational costs and minimize environmental impact. Collaboration with international tech giants and local universities can further spur research in advanced cooling and power optimization, creating high-skilled jobs and fostering an ecosystem that encourages continuous innovation.

2. Institutional-Grade Digital Asset Platforms: Establishing institutional-grade platforms for trading and clearing digital assets, backed by real-world goods and services, positions Malaysia as a regional hub for digital finance. These platforms can harness blockchain and other emerging technologies to ensure transparency, security, and efficiency. By implementing strict regulatory standards and robust cybersecurity measures, Malaysia can cultivate investor trust, attract global market players, and open new avenues for businesses seeking capital or alternative financing options.

3. Leveraging Shariah-Compliant Finance for Global Trade: Utilizing Malaysia’s expertise in shariah-compliant finance to integrate innovative products—such as sukuks and green carbon bonds—into global trade finance systems, particularly in ASEAN and Islamic economies. By aligning these products with environmental, social, and governance (ESG) principles, Malaysia can demonstrate leadership in ethical finance, attracting foreign capital and fostering partnerships that bridge conventional and Islamic financial markets.

4. Digital Credit and Clearance for Financial Inclusion: Establishing a digital-based credit and clearance system fosters financial inclusion and reduces dependency on traditional banking, particularly for small and medium enterprises (SMEs) and underserved communities. Such a system could streamline peer-to-peer lending, reduce transaction fees, and enable more agile capital flows. Integrating advanced AI-driven credit scoring models can also help lenders assess risk more accurately, making financial services accessible to those who have traditionally been excluded from formal banking.

5. ⁠Green Technologies for Data Centers Under MNCC: Incentivizing investment in green technologies for data centers is integral to aligning key infrastructure development with broader climate goals under MNCC. Through tax breaks, grants, or public-private partnerships, Malaysia can encourage energy providers and data center operators to adopt renewable energy sources, energy-efficient designs, and innovative cooling systems. This synergy between technological growth and environmental sustainability shall bolster Malaysia’s climate credentials and strengthens its role as a climate innovation leader.

6. ⁠Promoting MCC for Business Transactions: Promoting the MCC system empowers businesses to exchange goods and services by issuing and multilaterally netting own digital credits, effectively bypassing conventional fiat and or cash transactions (“”). This alternative financial mechanism can help stabilize local supply chains, reduce currency fluctuation risks, and stimulate local trade networks. By embedding trust and transparency into the MCC framework—potentially through blockchain or other tamper-proof technologies—Malaysia can become a pioneer in next-generation trade systems.

7. Attracting Nations to the MNCC: ⁠Attracting nations to participate in the MNCC by offering reduced costs for meeting Nationally Determined Contributions (NDCs) through access to Malaysia’s digital asset markets creates a compelling incentive for global collaboration. By tying climate objectives to tangible economic benefits—such as lower-cost financing for green projects or preferred terms for carbon trading—Malaysia can reinforce the MNCC as a practical solution for nations seeking to fulfill their climate commitments. This, in turn, enhances Malaysia’s diplomatic influence and positions the country at the epicenter of climate finance innovation.

Role of Government Agencies and Incentives

Government agencies like Malaysian Investment Development Authority (MIDA) play a critical role in drawing foreign investments to strategic sectors through tax breaks, grants, and reduced regulatory barriers. By promoting targeted incentives in AI, climate tech, and green finance, Malaysia can outpace regional competitors and set a clear direction for sustainable development. Such policies should also be flexible enough to adapt to evolving technology trends and global economic shifts, ensuring long-term competitiveness.

Following the successful model of nations like South Korea, we can establish Global AI and Climate Tech Fellowships to attract researchers, entrepreneurs, and technologists from around the world. These fellowships, bolstered by grants and world-class facilities encourage groundbreaking research that can be swiftly commercialized. Collaborate ventures with global tech leaders further enrich Malaysia’s R&D landscape, fostering technology transfers, capacity-building programs, and international partnerships that benefit both local and global stakeholders.

Finally, we should not forget active neutrality as a strategic edge. In a polarized world, Malaysia’s position of active neutrality between the U.S. and China offers a distinct strategic advantage. By leveraging this stance to attract investments from both powers, Malaysia can ensure a steady flow of capital and knowledge, while adhering to Ethical AI systems that prioritize inclusivity, transparency, and accountability. This balanced approach not only enhances Malaysia’s global brand but also fortifies its commitment to sustainable growth—proving that technological advancement and ethical governance can indeed go hand in hand.

By embracing these strategies, Malaysia can evolve into a frontrunner for AI-driven climate solutions and inclusive financial innovations. This vision requires close coordination among government entities, industry leaders, and civil society—each playing a part in ensuring that Malaysia’s economic ascent is firmly anchored in sustainability, inclusivity, and technological excellence.

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Dr Rais Hussin is the Founder of EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.

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