The adoption of artificial intelligence (AI) among companies in Malaysia has increased to 38% this year, up from 27% in 2025, according to the latest study by Amazon Web Services (AWS).
The study, featured in the Unlocking Malaysia’s AI Potential 2026 report conducted by Strand Partners, found that nearly one million new companies adopted AI over the past year, equivalent to almost two companies every minute.
This brings the total number of companies using AI in Malaysia to more than 3.4 million.
However, the study found that the growing adoption rate has yet to translate into widespread AI maturity, with 67% of companies using AI still relying mainly on basic applications, such as public chatbots for routine tasks and ready-made AI tools to improve existing processes.
Only 19% of companies have a formal strategy to expand AI adoption across multiple business functions.
The report said Malaysia now has an opportunity to turn the growing use of AI into capabilities that can be implemented consistently and at a larger scale.
It identified three practical approaches to achieve this, namely strengthening the role of sector-focused software providers, improving governance in AI operations and increasing AI adoption within the public sector to build greater confidence among businesses.
The study found that most companies prefer not to develop AI capabilities entirely in-house, with 57% obtaining AI capabilities from external providers, consultants or software vendors.
Meanwhile, 69% of companies said Malaysia-based software providers and AI technology developers had influenced their adoption of AI.
Sector-specific software providers with deeper industry knowledge can integrate AI into existing workflows, potentially making the technology more accessible to a wider range of organisations.
Among companies working with external consultants, software providers and other partners, 43% use their services to develop AI strategies, 40% for system integration and maintenance, and 31% for workforce training.
AWS Malaysia country manager Hussein Mohd Ali said software providers were among the key drivers needed to expand AI adoption across Malaysia.
He said providers that specialise in specific sectors and integrate AI into companies’ operational tools could help move the wider economy more quickly from experimentation towards practical AI capabilities.
He added that governance and public-sector leadership were also essential to maintaining the momentum behind AI adoption.
AWS is developing an ecosystem to support these efforts through investments in local partners, workforce training and technological infrastructure, allowing software providers to bring AI solutions to a wider range of industries and businesses in Malaysia.
The financial services and manufacturing sectors recorded the highest AI adoption rates, with 53% and 50% of companies respectively using the technology, compared with 38% across the overall business sector.
Within manufacturing, 57% of companies remain at the exploration or experimentation stage of AI adoption, compared with 34% in financial services.
Despite this, 80% of manufacturing companies believe AI has the potential to transform their industry.
The sector’s main challenges include technical or data-related issues at 44%, workforce capacity at 41% and resource constraints at 37%.
Only 15% of manufacturing companies have a formal AI strategy, while just 13% are considered ready for the next generation of AI technology.
