Natalie Loi is part of the vanguard working to turn Malaysia into a tech powerhouse in South-East Asia.
Ms Loi was just 19 when she founded her first tech startup, UnBound, while a business student at Victoria University in 2017.
It started out as an education tool — using augmented reality games to make learning more accessible and fun.
"I didn't have a background in tech so I self-taught myself into building a learning application," she said.
UnBound has now has expanded and delved into artificial intelligence (AI), and works with more than 100 institutions across South-East Asia, Australia and UK.
Ms Loi said the government had been focusing on helping startups likes hers and upskilling young graduates.
"As a developing country, we have so much more potential to grow than a developed country," she told the ABC.
She said already developed countries had more outdated infrastructure while Malaysia could leapfrog ahead.
"There's a lot of space for growth and a lot of potential for skill if you want to make an impact in the world."
Malaysia's digital transformation
Once the largest exporter of tin, rubber and palm oil in the world, Malaysia's economy largely relied on its mining and agricultural sector until the 1980s when it rapidly industrialised under former prime minister Mahathir Mohamad.
The country's focus on its digital economy began in 1996 with plans to develop a "Multimedia Super Corridor" mirroring Silicon Valley in the United States.
While the plan was never fully realised, the country's second economic transformation is now well underway.
The COVID-19 pandemic pushed fast-forward on growth in the country's digital sector, said trade economist Juita Mohamad.
"It was fuelled by increasing e-commerce adoption and also overall digital transformation not just within the private sector, but also the public sector in Malaysia," said Ms Mohamad, who was until recently the director of the Economics and Business Unit at Malaysia's Institute for Democracy and Economic Affairs.
In 2021, the Malaysian government created an outline for Malaysia's digital economy called the Digital Economy Blueprint.
Its goal is for Malaysia to become the "regional leader in the digital economy" by 2030, creating jobs in sectors ranging from semiconductor manufacturing to cybersecurity, software development, e-commerce and creative media.
Digital industries are now expected to contribute 25 per cent of Malaysia's GDP by the end of 2025, up from about 17 per cent 10 years ago.
The government is putting a major emphasis on AI's role in this digital economy road map, creating a dedicated agency, the National Artificial Intelligence Office (NAIO), under the Ministry of Digital in December 2024.
According to NAIO's chief executive, Sam Majid, the office's remit includes "policymaking, partnerships and programs that foster AI adoption across public and private sectors".
The NAIO collaborates with individuals like Natalie Loi and organisations such as Malaysia Digital Economy Corporation (MDEC) to incorporate AI into Malaysia's everyday economy.
Ms Loi said one of UnBound's projects was assisting the government is its implementation of the "smart cities" concept — essentially the digitising of municipal planning and services.
"The concept of a smart city is that you want everything to be interconnected," said Ms Loi.
Ms Loi said UnBound was developing an AI-driven surveillance system for the Malaysian Public Works Department and the Ministry of Housing and Local Government to assist with "real-time monitoring and intelligent decision-making".
Data centre development
One of the most visible signs of Malaysia's digital transformation is the development of huge data centres.
Data centres are usually large facilities — on average one hectare in size — that help manage and store huge volumes of digital data.
They provide the infrastructure to power tools such as social media, search engines and even ride-sharing apps, and are also essential when it comes to processing AI.
Malaysia's strategic location in Asia, relative lack of earthquakes, cheap land and low electricity prices have made it an attractive hub for this key internet infrastructure.
The YTL Green Data Center Park in Johor state is one of the biggest in Malaysia, covering 275 hectares (roughly the size of 13 MCGs).
Google announced in mid-2024 that it would invest $US2 billion ($3 billion) to develop its first data centre in the country, part of parent company Alphabet's initiative to expand its cloud services in the Asia Pacific.
Microsoft has also announced plans to invest $US2.2 billion investment into Malaysia over the next four years.
Meanwhile, Alibaba Cloud, the cloud computing arm of Chinese tech giant Alibaba Group, is opening its third data centre in Malaysia this month.
While these foreign investments are fuelling Malaysia's digital economy, analysts say they could also make things sticky for the developing nation when it comes to balancing its relationships with other nations.
"This has been an interesting year for Malaysia, given that there has been a lot of data centres built in the country, not just by Microsoft but also Chinese tech giants and other non-Western investors," said Mark Manantan, director of cybersecurity and critical technologies for the Pacific Forum, a not-for-profit foreign policy research institute that looks into the Indo-Pacific.
"Countries which previously were not involved in the direct decoupling and de-risking efforts of the US against China are really going to feel the heat because the US is expanding its reach in terms of curbing China's access," said Mr Manantan.
Mr Majid said the Malaysian government was aware of this rivalry between the two big powers.
"Neutrality is the big, bold word that we often use when it comes to, engagement with any international parties," he said.
Despite Malaysia's ambition, experts say the country's digital transformation faces challenges.
The rising number of data centres could create environmental issues, and according to Nuarrual Hilal Dahlan, a law professor at Universiti Utara Malaysia, the solution may not be straightforward.
"Data centres use up a lot of water and electricity so the government has to make sure that there is sufficient resources for these data centres as well as for citizens," he says.
Malaysia's National Water Services Commission is trying to address this by preparing strict guidelines for data centres to use alternative sources of water such as rainwater and recycled water instead of potable drinking water for their operations.
The YTL Green Data Center Park runs using solar energy but not all data centres are powered with renewables.
Professor Dahlan also warned that there might be "hiccups" in the oversight of data centres which is shared between the state and federal governments.
The Malaysian constitution states that federal law takes precedence over state laws if there's a conflict, but Professor Dahlan said state governments were "not bound by the advice and command of federal agencies" such as the Department of Environment.
"The law has to be modernised to keep up with the new challenges," he said.
There's also scepticism that foreign investments into Malaysia's digital innovation is leading to quality jobs.
Ms Mohamad said that the government hopes to create 50,000 new jobs but questioned whether there were enough local workers with the right skills.
Azran Osman-Rani, the co-founder of a digital health startup called Naluri, agreed.
"A lot of it [the jobs] in data centres involve maintenance and manufacturing but they're not generating a lot of digital talent like software engineers, data scientists and digital marketers," he said.
"To me, a real measure that the Malaysian government should focus on is how many of our digital companies can successfully operate and expand beyond Malaysia instead of how many foreign companies we attract."
Digital divide remains
Experts have pointed out that some areas are benefiting more from the digital transformation than others.
The Malaysian government is in the midst of rolling out 5G technology across the nation but the rollout has mainly focused on populated and urban areas.
Only 90 per cent of households in Malaysia have an internet connection.
"Ninety per cent sounds good but … we do see pockets in different communities in the East Coast and also in eastern Malaysia that are still not connected," explains Ms Mohamad.
Despite these challenges, young Malaysians like Ms Loi are hopeful for Malaysia's digital future.
"AI is opening up a lot of career opportunities, and there's a lot of space for growth and a lot of potential for new skills," she said.
"I can be creative and there's nothing stopping my innovation."
