KUALA LUMPUR, 30 October 2025 — Red Hat, Inc., the world’s leading provider of enterprise open source solutions, in collaboration with the Malaysian National AI Office (NAIO), today unveiled findings from a new study titled “Accelerating SME AI Adoption Through Open Source in Malaysia’s Digital Future.” Conducted by independent research firm Ecosystem and backed by Red Hat and NAIO, the study surveyed 133 SMEs across multiple industries to examine AI adoption trends, challenges, and plans among Malaysia’s small and medium enterprises.
The research reveals that 44% of Malaysian SMEs expect AI to fuel business growth without increasing costs, reflecting optimism toward AI’s transformative potential despite economic pressures. Yet, adoption remains at an early stage, 36% of SMEs are piloting AI projects, while only 21% have scaled beyond pilots to achieve measurable outcomes. The study also highlights open source technologies as a key enabler for broader AI adoption, offering SMEs a cost-effective and flexible path toward implementation.
Key findings show that 44% of SMEs expect AI to support growth without higher costs, and 41% see AI as a way to introduce new products and services. Meanwhile, 54% cite cost savings and 51% highlight flexibility as their main reasons for adopting open source AI. However, barriers remain: 60% of SMEs cite lack of in-house expertise as their biggest challenge, and 52% point to implementation and maintenance costs.
The study underscores the importance of cross-sector collaboration between government, industry, and academia to help SMEs reach AI maturity. Respondents identified stronger ecosystem support, from funding and incentives to partnerships with technology providers, as critical for scaling AI responsibly. As the central body leading Malaysia’s national AI strategy, NAIO will play a pivotal role in enabling SMEs to align with the nation’s digital transformation goals.
“Open source lowers barriers like skills gaps, infrastructure costs, and vendor lock-in, empowering SMEs to scale AI responsibly. Our collaboration with NAIO aligns this vision with Malaysia’s national AI strategy, giving SMEs the confidence to turn AI potential into measurable impact,” said Albert Chai, General Manager for Rest of Southeast Asia (RoSEA) at Red Hat.
“To make Malaysia a regional AI leader, SMEs must have access to affordable, trustworthy, and impactful AI solutions. Open source gives them that control and flexibility,” added Shamsul Izhan, Head of the National AI Office (NAIO).
Sash Mukherjee, VP of Industry Insights at Ecosystm, said, “Open source AI offers transparency, flexibility, and long-term control. It not only reduces cost but accelerates innovation through shared standards and collaboration.”
The study, developed by Ecosystm in collaboration with Red Hat and supported by NAIO, surveyed 133 SMEs within the Malaysia Digital Economy Corporation’s (MDEC) network and included in-depth interviews with NAIO stakeholders and working group members.
