PM Anwar: Malaysia’s Smart Cities Must Harness AI and Local Expertise

Prime Minister Datuk Seri Anwar Ibrahim has underscored that the development of Malaysia’s future smart cities must be driven by local expertise, leveraging artificial intelligence (AI) and digital technologies to address urban challenges while safeguarding national data sovereignty.

Speaking at the Smart City Expo Kuala Lumpur, Anwar — who also serves as Finance Minister — laid out a vision where Malaysian cities integrate AI into their infrastructure and governance, making them more efficient, resilient, and people-centric.

Why Smart Cities Matter Now

Malaysia, like many rapidly urbanising nations, faces mounting pressures:

• Population growth: Rising density in urban areas increases demand for housing, transport, and public services.

• Environmental strain: Energy consumption, water use, and waste management are becoming critical issues.

• Complex infrastructure needs: Cities require scalable solutions to remain efficient and liveable.

• Resilience gaps: Climate change, natural disasters, and global uncertainties demand stronger systems.

Anwar stressed that AI offers Malaysia the tools to respond proactively, from reducing environmental footprints to enhancing cost efficiencies.

AI Applications for Malaysia’s Smart Cities

According to Anwar, AI can transform urban management in multiple ways:

1. Energy, Water & Waste Management

• AI-enabled grids optimise electricity distribution.

• Smart sensors reduce water leakage and waste inefficiencies.

• Predictive analytics improve recycling and sustainability outcomes.

2. Disaster Preparedness & National Resilience

• AI-driven early warning systems strengthen flood and landslide response.

• Real-time monitoring enhances emergency coordination.

3. Smarter Government Services

• AI chatbots can streamline citizen-government interactions.

• Digital governance ensures fairer, consistent, and accessible services.

4. Transportation & Urban Mobility

• AI supports traffic optimisation and public transport scheduling.

• Integrated systems reduce congestion and promote greener commuting.

For the property sector, these AI-driven initiatives will directly improve urban liveability, housing demand, and investment attractiveness.

Local Expertise at the Core

A key theme in Anwar’s address was local ownership of Malaysia’s smart city journey.

“We must be proud to have solutions that reflect our unique needs and values. By fostering innovation and supporting home-grown talent, we can reduce reliance on external technologies and ensure data sovereignty,” he said.

This push for data sovereignty is especially significant in an era where foreign-built systems often store or process sensitive information offshore. By developing local AI capabilities, Malaysia ensures that:

• Solutions are tailored to local contexts (e.g., flood risks, tropical urban density).

• Economic value remains within the country, boosting local enterprises.

• National security and privacy are safeguarded.

Building Human Capital for the AI Era

To support this vision, Anwar announced a 21st-century technologies education programme, led by Digital Nasional Bhd (DNB) and Ericsson.

• The initiative will upskill 40,000 public-sector personnel in AI, data science, and digital governance.

• Training spans municipalities and government agencies, ensuring smart city adoption is broad-based.

• Upskilling efforts will ensure that the human element keeps pace with technological transformation.

This emphasis on talent development reflects Anwar’s broader economic agenda: linking technology adoption with inclusive growth and job creation.

Implications for Property Development

The smart city agenda has major implications for Malaysia’s property sector, particularly in Kuala Lumpur and major growth corridors:

1. Higher Property Values in Smart Districts

Developments that integrate AI-driven systems — from energy efficiency to digital governance — will command higher values as buyers seek smarter, sustainable homes.

2. Stronger Demand for Transit-Oriented Projects

Smart mobility initiatives will elevate TOD (transit-oriented developments) in Kuala Lumpur, Johor Bahru, and Penang, where integration with LRT, MRT, and BRT is key.

3. Sustainability as a Market Driver

Green-certified and AI-empowered projects, such as Aras Residences and TRX-linked developments, will benefit from stronger government and buyer support.

4. Investor Confidence in KL Property

A clear government commitment to AI-driven smart urbanisation boosts investor sentiment, ensuring Kuala Lumpur remains attractive compared to regional hubs like Singapore and Bangkok.

Global Context: Malaysia’s Smart City Push

Malaysia’s vision aligns with broader regional and global trends:

• Singapore: Already a global model for smart governance and urban mobility.

• Thailand’s Eastern Economic Corridor: Focused on smart logistics and industrial hubs.

• UAE’s Dubai Smart City: Leveraging AI for everything from policing to utilities.

By focusing on localised solutions, Malaysia aims not to copy but to differentiate its smart city model, ensuring it aligns with national priorities and cultural values.

Challenges Ahead

While the vision is promising, challenges must be addressed:

• Financing: Smart city infrastructure requires significant upfront investment.

• Coordination: Multi-agency collaboration is critical but often complex.

• Cybersecurity: Greater digitisation increases exposure to risks.

• Adoption Pace: Ensuring smaller municipalities are not left behind as larger cities move ahead.

Anwar’s emphasis on local expertise suggests Malaysia will gradually build its smart city capacity, ensuring scalability without over-reliance on foreign technologies.

Conclusion

Prime Minister Anwar Ibrahim’s keynote at the Smart City Expo Kuala Lumpur sets a clear roadmap: Malaysia’s smart cities must be AI-powered, people-focused, and built on local expertise.

By integrating AI into energy, waste, disaster response, and governance, Malaysia can create more efficient, sustainable, and resilient cities. The government’s partnership with DNB and Ericsson to upskill 40,000 civil servants underscores the seriousness of this vision.

For property developers and investors, this marks a new era where smart city integration will directly shape housing demand, project values, and long-term urban competitiveness.

Malaysia’s challenge — and opportunity — lies in ensuring that smart cities are not imported templates, but locally-driven solutions reflecting the country’s unique needs and aspirations.

As this agenda unfolds, Kuala Lumpur property investors should closely watch smart city-linked developments, as they are poised to become the most valuable assets in Malaysia’s next phase of urban growth.