The Ministry of Investment, Trade and Industry (“MITI”) is set to make significant announcements in the coming days, following the recent passage of the Cyber Security Bill 2024. This move is expected to greatly enhance Malaysia’s cyber security infrastructure, especially in support of the growing artificial intelligence (“AI”) sector.

Importance of the Cyber Security Bill 2024

The Cyber Security Bill 2024, passed in April, is a critical step towards protecting and enhancing Malaysia’s cyber security landscape. The bill enforces compliance with specific measures, standards, and processes to effectively manage cyber threats. According to Tengku Datuk Seri Zafrul Abdul Aziz, the Minister of Investment, Trade and Industry, the bill’s passage is a major milestone for the industry.

“We are in the early stages of developing our AI infrastructure, so it will take some time before we can compete with Singapore. However, the impact has already been positive. For instance, Microsoft had concerns about our cyber security before announcing their substantial US$2.2 billion investment in Malaysia’s cloud and AI sectors,” Tengku Zafrul stated during a media briefing on the National Semiconductor Strategy.

Budget Allocation and Strategic Initiatives

As part of Malaysia’s Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim announced an allocation of RM60 million to CyberSecurity Malaysia (CSM). This funding aims to strengthen the national cyber security ecosystem by implementing the 5G Cyber Security Testing Framework and fostering local expertise in 5G technology. This includes investment in hardware, equipment, applications, and advanced technology ecosystems necessary for robust cyber security measures.

CSM’s Chief Executive Officer, Datuk Amirudin Abdul Wahab, emphasised that this allocation would significantly enhance CSM’s technical capabilities, support research, and empower various cyber security initiatives. These efforts are expected to benefit over 120 organisations, including government bodies, industries, academia, and mobile service providers, along with 800 cyber security professionals trained in 5G security testing services.

Economic and Regional Impact

The strategic focus on cyber security and AI is timely, given the competitive landscape in Southeast Asia. A report by East Asia Forum highlighted that AI venture capital investment is predominantly concentrated in Singapore, which received US$8.4 billion, significantly more than Malaysia’s US$371 million. However, the region is projected to see substantial economic benefits from AI, potentially increasing GDP by up to US$950 billion, or 13%, by 2030​.

The government’s initiatives reflect a strong commitment to safeguarding national security and ensuring Malaysia remains competitive in the digital age. As Prime Minister Datuk Seri Anwar Ibrahim mentioned earlier this month, building a robust ecosystem for AI is crucial, and accelerating the pace of development is imperative.

Impact on Key Industry Players

These developments will significantly benefit key industry players such as LGMS Berhad, Systech Berhad, and Agmo Holdings Berhad. LGMS Berhad is a leading cyber security firm that specialises in providing professional services, including security assessments and compliance services. Systech Berhad offers comprehensive IT security solutions and consulting services, focusing on safeguarding digital assets and information. Agmo Holdings Berhad is known for its innovative digital solutions, including mobile and web applications, which are increasingly integrated with advanced security features. These companies are well-positioned to leverage the enhanced cybersecurity framework and the growing AI infrastructure, driving further growth and innovation in their respective fields.

The combined efforts of MITI and the Cyber Security Bill 2024 underscore Malaysia’s proactive approach to enhancing its cyber security infrastructure and supporting AI innovation. These initiatives are crucial for protecting critical information and infrastructure while fostering a secure and sustainable digital economy.