Anwar: AI and data centre growth brings jobs but not matching government revenue

Prime Minister Anwar Ibrahim says growth in AI, data centres and the digital economy has not produced a matching rise in government revenue, despite creating jobs and technological capability. Speaking at the 2026 National Innovation and Commercialisation Expo in Kuala Lumpur, according to the New Straits Times, he called it "poor economics" to assume 6 per cent second-quarter growth means substantially more to spend.

Key points

• Anwar, who is also finance minister, contrasted the digital sector with factories and agriculture, which he said bring direct returns.
• Research funding will rise in the 2027 Budget, to be tabled in early October, but requests must be weighed against fiscal limits.
• He urged agencies to drop outdated bureaucracy, citing AI faculties set up at several universities within three months.

Why it matters for Malaysia

The remarks frame the trade-off at the heart of Malaysia's data centre strategy: economic activity and skills on one side, and limited direct fiscal returns on the other. That is likely to shape how much the budget can do for AI and research.

Questions answered

Why does Anwar say AI growth does not mean more government money?

He said strong growth in AI, data centres and the digital sector does not generate direct revenue for the country. It creates development opportunities, jobs and technological capability, unlike a factory or agricultural expansion, which he said bring direct returns.

Will research funding rise in the 2027 Budget?

Anwar said research funding will be increased under the 2027 Budget, to be tabled in early October. He warned that demands for more allocation must be weighed against the government's fiscal constraints.