NOVEMBER 3 — In recent months, three seismic global milestones characterised a fundamentally altered economic order.

First came the historic public listing of SpaceX in the United States, debuting at an unprecedented valuation exceeding US$1.7 trillion (RM5.41 trillion).

SpaceX is not building products merely for domestic or international markets; it is laying the groundwork for an interplanetary economy.

Second, the short-lived June ceasefire agreement between the United States and Iran offered a fleeting geopolitical respite.

Crude oil prices promptly plummeted from over US$120 in April to $70 per barrel by late June, before the accord broke down a fortnight later, driving Brent crude back to hovering around US$100.

Third, China’s Moonshot AI unveiled Kimi K3, a 2.8-trillion-parameter open-weight model matching leading Western proprietary systems such as ChatGPT, Claude, and Gemini, while reported to consume 40 per cent to 50 per cent less compute and power.

Alongside President Xi Jinping’s defining keynote on global AI governance at the 2026 World AI Conference in Shanghai, the release triggered what some commentators view as a modern “AI Sputnik moment.”

These events underscore our operating reality: hyper-velocity in technological disruption, hyper-voracity in multipolar superpower competition, and hyper-volatility across trade and supply networks due to the modern world being in a state of perpetual crisis, or permacrisis.

This is what I call the global hyper-flux condition, sparked by the pandemic years that laid bare the precarity of national and international systems, and deepened by aggressive superpower rivalry across every sector.

For an open economy like Malaysia, the old playbook no longer applies.

At a recent SME forum, a respected industry leader remarked that businesses require three things above all: certainty, certainty, and certainty.

Yet in a hyper-flux era, guaranteed certainty is an illusion. In fact, the world’s highest-valued frontier enterprises do not wait for clarity. They capitalise on volatility and make bold, long-term bets.

While absolute predictability is gone, Malaysia can still thrive by mastering three strategic pivots.

1. Monetise reliability, not cheapness

Twenty years ago, when I worked in a multinational manufacturing plant in Penang, our entire operational mantra was “Just-in-Time” (JIT): minimise inventory, keep cash moving, run lean.

Today, disruptions, from pandemic-era lockdowns to chokepoints along Hormuz and Bab el-Mandeb, have elevated security to a core market premium. The operational mindset has shifted to balancing Just-in-Time with a Just-in-Case (JIC) scenario.

Look at why the F1 Bahrain Grand Prix moved to Sepang recently. First, because of regional conflict. But second, because Malaysia was ready, neutral, and safe.

In a hyper-flux world of uncertainty, being available and being safe are economic advantages.

For decades, our pitch to foreign investors was a race to the bottom: “Come here, we have cheap land, cheap power, cheap water, and cheap labour.” That era is finished. Our task today is to monetise readiness, monetise redundancy, and monetise stability.

2. Convert geopolitical centrality into geo-economic capital

Malaysia’s advantage is not that we stand outside geopolitical competition. It is that we remain connected to multiple centres of economic power.

The winners in today’s hyper-flux environment are countries that can pick up the phone and cut deals on tariffs and traffic. If you have leaders who can pick up the phone and ask, “Can you reduce my tariff? Can you let my ship pass?”, then you win.

In a fragmented global landscape, advantage belongs to nations capable of bridging divides.

Some critics question why Prime Minister Anwar Ibrahim spends so much energy on foreign affairs and international summits. To me, that misses the point of modern statecraft. A national leader today must act like an active CEO: building strategic goodwill, managing stakeholder risk, and engaging the market.

The logic applies: more friends mean bigger markets.

Today, by maintaining constructive relationships across competing blocs, we strengthen our ability to safeguard shipping routes, secure energy supplies and preserve access to markets in both East and West.

3. Shift from cost centre to value centre

For decades, pricing competitiveness was one of Malaysia’s principal investment advantages. It helped us industrialise. But the factors that brought us this far will not be sufficient to take us to the next stage.

Competing on price alone is a losing game. It turns the regional economy into a pasar malam, where stall after stall undercuts the next until nobody makes a profit and wages stagnate.

The only sustainable defense against hyper-flux is value creation. The traditional Made-in-Malaysia assembly model must evolve into a Made-by-Malaysia innovation engine.

When I visited an automated test equipment (ATE) firm in Penang recently, I asked them straight: “Are you worried about tariffs? Are you worried competitors will reverse-engineer your tech?”

Their answer was telling: “No, because by the time they figure it out, we’ve already moved on to the next generation.”

In other words, they don’t rely on being cheap, they rely on staying ahead.

Becoming an AI nation: Wrapping the AI cake

But there is a deeper question. How does a relatively small country like Malaysia move up the value chain when we are not able to compete with the largest economies in market size, capital or research budgets?

We cannot simply work longer hours or build more factories. We must multiply the value of our knowledge, our skills and our industrial experience.

This is where artificial intelligence becomes strategically important. Not because AI replaces our existing strengths, but because it can amplify them.

It allows our engineers to solve more complex problems, our factories to detect defects earlier, and our small businesses to reach customers they could never reach before.

In other words, AI offers Malaysia an opportunity to turn our accumulated industrial experience into a new competitive advantage.

What does it mean to become an AI nation?

Merely buying high-end AI licenses without transforming our ecosystem is akin to buying the latest iPhone just to send SMS and make voice calls. It simply becomes a very expensive Nokia 3310.

Do not be mistaken, AI is not an IT procurement exercise. It is a foundational, civilisational shift akin to electrification a century ago.

When electricity arrived, the societies that flourished were not the ones that clung to pelita and kerosene lamps waiting to see what happened.

The winners rewired their factories, reinvented appliances, revised school syllabus, redesigned their towns, and remodeled their entire economies around a new source of power.

AI rewards those who learn quickly. Organisations that deploy it intelligently can accumulate better data, develop stronger capabilities, redesign their processes and improve with each iteration.

The advantage is not simply being first. It is learning faster than everyone else.

If we hesitate and take a wait-and-see approach, we don’t just fall behind, we may get locked out completely.

Jensen Huang of Nvidia famously described AI as a five-layer cake: energy, silicon, infrastructure, models, and applications.

For Malaysia to digest and master this cake, we need what I call a Triple-i three-layer wrapper:

Layer 1: Intelligence (Knowledge). At the top level, we need technical depth. This is why the government is accelerating dedicated AI faculties, institutes, and university curriculums to train our coders, engineers, data scientists and technologists.

But technical depth alone is not enough. We equally need broad-based mass literacy. AI touches every layer of daily life.

Ordinary Malaysians must know how to adopt and adapt AI. Crucially, a literate public is the only way we can have an honest, informed national dialogue on how our AI future should look.

Layer 2: Infrastructure. Beyond reliable power grids, water resources, and high-speed Internet, an AI model is only as intelligent as the data that feeds it.

Two competing enterprises can buy the exact same AI model off the shelf. What creates the winning edge is proprietary domain data: decades of localised customer behaviour or years of shop-floor yield figures. We must treat our sovereign and industrial data as national economic fuel, organising, securing, and enriching it locally.

Layer 3: Institutions. The protective wrapper is our institutional framework. Writing algorithms may be the job of computer scientists, but establishing the legal, ethical, and societal boundaries cannot be left to engineers, much less politicians alone.

Civil society, regulators, industry, the people in general must sit at the table to decide our safeguards, the risks mitigation, gains-and-losses management, etc.

We cannot afford to wait for an “AI Chernobyl”, or wake up to a missed-the-boat crisis, before setting this Triple-i ecosystem.

In an era of hyper-flux, waiting for certainty is a spectator’s trap. Malaysia does not start from zero.

We have an established industrial base, functioning institutions that we must continue to strengthen, and a strategic position in the global economy.

However, resting on past laurels will not save us. We must have the courage to rethink our economic model, and retool our nation for this new technological frontier.

The goal is not merely to survive the turbulence of our decade, but to secure success for our next generation.

* Steven Sim is the Minister of Entrepreneur Development and Co-operatives of Malaysia.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.