More than half of Malaysian MSMEs agree with AI regulation: study

Sixty-eight percent of MSMEs demand regulation and programmes for AI use and literacy.

Sixty-eight percent of micro, small, and medium enterprises (MSMEs) in Malaysia believe that the government should strongly regulate the use of artificial intelligence (AI) in business.

This comes as 81% of Malaysia’s MSMEs adopt AI to solve business challenges, Xero said in its study of businesses’ AI readiness. However, this is hindered by the absence of intentional implementation strategies, it added.

The country’s National AI Office’s AI (NAIO) Technology Action Plan (2026-2030) is aimed to guide the country’s businesses on using AI for long-term growth.

The country’s MSMEs are using AI tools for productivity, creative generation, data and analytics, marketing, software development, and business automation, amongst others, Xero found.

Meanwhile, Xero called on the development and implementation of clear regulatory frameworks for responsible AI use, alongside accessible programmes designed to significantly increase AI literacy across all Malaysian businesses.

To study their AI readiness, Xero surveyed 1,033 respondents who work in Malaysian MSMEs, or organisations defined as having one to 200 employees.