Malaysia set to enact first AI law by early 2027

Malaysia is moving forward with its first dedicated AI law, aiming to introduce the legislation by early 2027. Digital Minister Gobind Singh Deo announced on September 10, 2026, that the draft Artificial Intelligence (AI) Governance Bill has been finalized and will soon be presented to the Cabinet. The government plans to table the bill in Parliament by the end of the first quarter of 2027.

The bill follows a risk-based model, categorizing AI systems into three tiers based on potential harm. Tier 1 prohibits unacceptable risk uses, Tier 2 requires assessments and oversight for high-risk systems, and Tier 3 mandates baseline compliance for low-risk applications. The draft also outlines five core principles: human dignity, transparency, accountability, safety and security, and data governance.

A new Central AI Authority will be established to oversee safety, investigations, enforcement, and enablement. The legislation is designed to complement existing laws, such as the Personal Data Protection Act from 2010. The draft was shaped by a public consultation held from July 10 to July 31, 2026, aiming to improve industry accountability and transparency.

Malaysia's approach builds on previous steps, including the National Guidelines on AI Governance and Ethics released in 2024, the MY-AI Standards platform launched in March 2026, and the National AI Action Plan 2026-2030. For businesses and investors, the law provides clarity and a legally recognized framework, potentially boosting confidence and streamlining compliance.