Malaysia Surges as AI Manufacturing Hub
Malaysia's emergence as an AI manufacturing hub marks a significant turnaround for the country. Just two years ago, it was better known internationally for the multibillion-dollar 1MDB scandal than cutting-edge industry.
Today, Malaysia is one of the world's four largest net exporters of AI-related hardware, alongside South Korea, Taiwan, and Thailand, according to the International Monetary Fund. Data centre investments have also climbed to an estimated nearly 18% of gross domestic product, the highest share globally, HSBC Holdings plc analysts say.
The country's growth is already exceeding forecasts and economists expect that momentum to continue, buoyed by tech-driven investment and exports. Gross domestic product surged 5.8% in the second quarter, outpacing the 5.2% consensus estimate, as domestic demand, AI-linked investments, and electronics exports countered the impact of the war in the Middle East.
JPMorgan Chase & Co subsequently raised Malaysia's 2026 GDP forecast to 5.3%, putting it ahead of most regional peers.