The Digital Ministry said the government was shifting from individual smart-city projects towards an integrated AI City ecosystem, allowing local authorities to share data and reuse proven artificial intelligence (AI) solutions.
The plan was outlined in a parliamentary reply to Bakri MP Tan Hong Pin, who questioned how the government would prevent isolated technology projects between cities and ensure the initiative directly benefits the public.
Under the National AI Action Plan 2026–2030, the government plans to develop an AI Algorithm Bank and AI Marketplace so that local authorities can access and adapt existing technologies instead of building their own systems independently.
The approach follows the principle of “Build Once, Reuse and Scale”, with the aim of lowering costs and accelerating AI adoption across all 156 local authorities.
From monitoring cities to predicting problems
A proposed National Command Centre could bring data from different government agencies together on a single platform, giving authorities a more comprehensive view of conditions across the country.
With AI analytics and digital twin technology, officials could analyse urban trends, simulate potential scenarios and identify risks before they develop into larger problems.
The concept, described as a “Thinking City”, aims to move beyond monitoring traffic, infrastructure and public safety towards anticipating problems and supporting faster responses.
The Digital Ministry is coordinating the effort through a task force established in August 2026, involving relevant ministries and agencies.
28 AI projects provide the starting point
The initiative has already seen 28 projects developed across nine selected local authorities, covering traffic management, smart surveillance, digital twins, tree monitoring and autonomous transport.
Penang City Council has reported a 10% to 15% reduction in traffic congestion through AI-powered traffic management.
In Ipoh, better traffic-light coordination has reduced the time taken for traffic to move through certain congested locations from two minutes to 40 seconds.
Putrajaya is advancing autonomous electric transport, while Johor Bahru is using AI-enabled CCTV to assist police investigations into crimes and road accidents.
The ministry said successful solutions could be adapted by other local authorities, reducing the need to develop similar technologies repeatedly.
Existing towns can upgrade in stages
The AI City Initiative is also intended to help towns and cities build on their existing digital infrastructure instead of replacing their systems wholesale.
For example, digital public complaints, smart waste management, connected lighting and surveillance systems could be enhanced with AI, depending on local needs, data readiness and cooperation between state governments and local authorities.
The ministry said this coordinated approach would help reduce duplicated investments, improve service delivery and ensure that AI technologies provide practical benefits to communities.
The wider goal is to support Malaysia’s ambition of becoming an AI-driven nation by 2030.
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