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Malaysia can tap Nvidia-YTL tie-up to attract more global firms

Malaysia can tap Nvidia-YTL tie-up to attract more global firms

12 Dec 2023

Malaysia is hitching on another wave of high-tech industries to add value to the economy and boost its digitalisation ambition.

The latest tie-up between YTL Corp Bhd’s utility unit YTL Power International Bhd and US technology giant Nvidia Corp in artificial intelligence (AI) venture may attract more global firms to set up or bolster their presence here, economists said.

They said the YTL-Nvidia tandem’s planned establishment of a supercomputing facility in Johor is poised to attract foreign enterprises seeking to establish research and development operations, particularly in computationally intensive fields like aerospace and pharmaceuticals, besides AI.

The move is expected to elevate Malaysia’s international standing, given Nvidia’s renowned presence in the global AI landscape.

Nvidia, a US$1.12 trillion company listed on the US’ Nasdaq, is behind computing technology of generative artificial intelligence such as ChatGPT.

Sunway University economics professor Dr Yeah Kim Leng said the tie-up augurs well for Malaysia’s foray into AI and related products and services.

“As a global leader in AI, Nvidia’s entry into the country’s foreign direct investment (FDI) landscape is also a signal of confidence in Malaysia’s growth prospects as well as the nation’s digitalisation ambition and potential,” Yeah told Business Times.

Malaysia, with its supportive government policies and an established technology manufacturing supply chain, is well-prepared to become an AI manufacturing hub, according to Tradeview Capital fund manager Neoh Jia Man.

“Malaysia has good roads, lots of clean energy and plenty of water that are really important for running big computer places like data centres and supercomputers.

“If the people here get better at doing computer stuff, Malaysia can use all these good things to build more data centers and supercomputers. This will help the AI industry grow in our country,” Neoh added.

Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun said after becoming a crucial part of the worldwide electronics supply chain, the nation is now joining a new wave of high-tech industries.

He said for Malaysia to become an AI manufacturing hub, the government policies must be streamlined to enable the relevant investors to set up shop in Malaysia. Otherwise, they will go to some of its competitive neighbours.

Malaysia must also focus on Science, Technology, Engineering and Mathematics (STEM) education and vocational training, added Oh.

On the potential economic impact anticipated from the Nvidia-YTL alliance and how it might influence Malaysia’s overall economic landscape, Oh is hopeful that the collaboration will create a high-paying job and qualitatively change the country’s economy.

“Hopefully Malaysia would gravitate further from raw-material exporting to high-tech manufacturing as the mainstay of the economy,” he added.

On the other hand, Yeah said the direct economic impact includes the capital invested by both joint venture partners that makes up the aggregate private investment component of gross domestic product.

“The more important indirect effects cover the impetus given to the deployment of AI in accelerating the country’s digital transformation,” he added.

Neoh, meanwhile, does not see much direct economic impact in the near-term nor he thinks that the project alone will alter Malaysia’s overall economic landscape as details on the tie-up are scant at present.

On Dec 8, YTL made an announcement about teaming up with Nvidia to create a powerful AI system in Malaysia.

This collaboration aims to bring supercomputers to the country by the middle of 2024.

The AI system will be located in the YTL Green Data Centre Park in Kulai, Johor, a massive facility generating 500MW of power, with the distinctive feature of being entirely powered by on-site solar energy.

YTL Communications Sdn Bhd, which is YTL’s telecommunications arm, will be responsible for owning and overseeing the AI infrastructure.

This infrastructure is designed to offer AI computing services across the nation, laying the groundwork for scientific research and the creation of solutions and applications.

Ultimately, this initiative aims to propel Malaysia forward on its journey to becoming an AI-driven nation.

Nvidia chief executive officer Jensen Huang, during his visit to Malaysia last week, said Southeast Asia has a strong potential market.

Source: NST