From attending a number of enterprise conferences this yr, corresponding to Tech in Asia, KL20, and Alliance Financial institution BizSmart, one factor has grow to be clear.

Conversations about AI adoption, automation, and sustainability dominate panel discussions and occasional breaks alike. It’s not nearly maintaining anymore—it’s about leveraging these instruments to thrive.

Whereas 2024 hasn’t been a yr of breakthroughs, it’s been a yr of laying the groundwork. Companies are exploring the potential of AI, and we’re seeing pockets of innovation in sectors like chip manufacturing and agrotech. 

However the place does all this lead us in 2025? Drawing insights from entrepreneurs and developments noticed all through 2024, listed below are some predictions for the approaching yr.

The AI revolution: From hype to sensible purposes

Whereas 2024 launched many Malaysians to the potential of AI via instruments like ChatGPT and Amazon Internet Companies options, Edwin Wang, the CEO of Signature Market, predicts that 2025 will see Malaysian companies concentrate on integrating AI for enhanced productiveness and income era. 

Dylan Tan, founder and CEO of Replyr.ai, noticed, “AI will stage the taking part in discipline by enabling nimble corporations to outperform bigger opponents with better effectivity and flexibility. Smaller corporations are already difficult incumbents by leveraging AI.”

From agentic AI techniques appearing as digital colleagues to extra subtle automation instruments for SMEs, using AI is predicted to increase considerably in 2025. 

AI brokers, in keeping with Dylan, are already decreasing entry boundaries for startups in aggressive industries. However there’s a caveat: startups should repeatedly innovate or threat irrelevance. 

“In case your providing doesn’t enhance with each new AI mannequin launch, you’re on shaky floor,” Dylan warned.

In agrotech

Whereas industries like ecommerce and finance are sometimes on the forefront of discussions about synthetic intelligence, agrotech is one other sector that may profit from it.

One instance of that is HEXA IoT, an area firm specialising in Business 4.0 options for the environmental, agriculture, and manufacturing sectors.

HEXA IoT was a part of the MRANTI International Accelerator Programme (GAP) and lately showcased an modern system known as Challenge A3. This system stands out as a result of it integrates AI with a 5G remote-controlled all-terrain car, which tracks crop efficiency to enhance harvests.

However AI in agrotech apart, Entrepreneurs and Startup in Malaysia (EnSIM) founder Daniel Cerventus Lim believes that the agrotech business itself nonetheless has untapped potential. He famous, “Globally, AI will dominate, however in Malaysia, agrotech startups might make a major impression.”

Subsequently, AI-powered or not, there’s a very good likelihood that Malaysia’s agrotech startups will nonetheless be making waves within the financial panorama.

In advertising

Advertising and marketing, as soon as an artwork of human connection via storytelling and personalised experiences, is now more and more pushed by AI, dealing with duties like buyer evaluation, search engine optimization methods, and producing advert copy.

Justin Tai, co-founder of Hypercharge, aptly highlighted this development, stating, “I consider using AI in digital advertising, particularly search engine optimization, is one thing that’s up and rising and changing into a necessity for many, if not all, entrepreneurs on the planet.”

AI might “scale back opex introduced from each day repetitive duties together with however not restricted to: dealing with buyer inquiries, copywriting, and development and information evaluation,” he identified.

He additionally inspired native companies to undertake Search Generative Expertise (SGE) and Geo-Enhanced Optimisation (GEO). “With the rising use of instruments like SearchGPT, those who don’t adapt might lose market share to opponents,” he mentioned.

AI challenges: Expertise gaps and job disruptions

Nevertheless, the rise of AI additionally brings its personal set of challenges. Some of the urgent is the problem to find expertise to steer AI initiatives.

“Even at Replyr, we couldn’t discover skilled hires; we needed to prepare individuals from scratch,” Dylan admitted. This expertise hole may persist in 2025, nevertheless it additionally presents alternatives for upskilling.

Daniel believes AI brokers and automation may very well be game-changers for SMEs. Nevertheless, he additionally famous, “Since AI brokers are going to be large, there’s additionally a variety of demand for that, however that may result in the displacement of jobs.”

“[Then there’s also Trump’s presidency], which goes to pressure the enterprise house owners of nations corresponding to China to look elsewhere, corresponding to Malaysia, and their price is likely to be arduous to battle in Malaysia,” he added. 

Our ageing inhabitants is an rising area of interest for entrepreneurs to faucet into

As populations age each globally and domestically, one other rising space is longevity and ageing-focused companies. With Malaysia set to grow to be an ageing inhabitants by 2030, startups catering to this demographic—from well being tech to senior-friendly providers—might even see progress, mentioned Daniel.

For instance, retirement villages are beginning to catch on, the place they provide a community-focused vibe that encourages unbiased residing whereas nonetheless offering completely different ranges of help when wanted. 

Even enterprise capitalists are getting in on the motion by investing in senior care houses, which reveals simply how a lot potential this sector has. 

The push for sustainability will develop, led by shopper demand

Sustainability, particularly within the context of ESG (Environmental, Social, and Governance) requirements, can be gaining momentum. 

Daniel believes sustainability is poised to affect backside traces, however the actual push has to return from shoppers. 

“So long as there’s demand, companies will observe the development,” he famous. He identified AEON for example, equipping suppliers with the mandatory instruments and data to undertake sustainable practices, signalling a rising emphasis on ESG.  

Dylan added, “Transparency, sustainability, and moral behaviour are now not elective; they’re important for survival.” Malaysian shoppers, significantly Gen Z, are more and more vocal about their expectations, pushing corporations to adapt.

Nevertheless, Edwin feels Malaysia tends to observe world developments quite than lead them. With political shifts like Trump’s insurance policies deprioritising ESG, he predicts Malaysian corporations may not focus closely on sustainability by 2025. 

He’s additionally sceptical about important EV automotive adoption or main startup investments in ESG-related areas occurring anytime quickly.  

Knowledge centres, chip manufacturing & semiconductor sectors will proceed to develop

Malaysia’s semiconductor business skilled regular progress in 2024, and this development is ready to proceed. 

Edwin highlighted that “information centres and chip manufacturing will rise because of the inflow of Chinese language corporations looking for to mitigate tariff dangers from the US.”

Penang, particularly, has emerged as a hub for high-paying jobs within the semiconductor sector. The ensuing rise in middle-income salaries might spark life-style and consumption developments, benefiting native startups. 

“Way of life industries in Penang and Johor are set to increase, catering to richer professionals and even spillover from Singapore,” Edwin famous.

Area of interest communities & fragmented markets spell enterprise alternatives

Gen Y and Z’s rising buying energy is driving a shift in the direction of area of interest, community-focused choices. 

This development is already evident in sports activities, with improvements like pickleball courts providing cafe-style resting areas. “Quickly there shall be such experiences for all of the sports activities,” famous Edwin.

It’s arduous to disregard the variety of pickleball courts which have already mushroomed in Malaysia this yr. 

Entrepreneurs are seizing alternatives to cater to particular pursuits, creating distinctive experiences that resonate with youthful shoppers. Count on to see extra startups capitalising on this development in 2025.

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Whether or not these developments speed up or stagnate will rely upon varied elements, together with world insurance policies, native market dynamics, and shopper priorities. 

Whereas we might not see revolutionary breakthroughs, incremental progress in AI adoption, agrotech, and area of interest markets might set the stage for a extra dynamic startup ecosystem. 

Malaysia has all the time been a quick follower quite than a primary mover, however with the suitable investments in expertise and know-how, it’d simply discover its personal distinctive stride. If 2024 was about laying the groundwork, 2025 shall be about constructing on it.

• Learn different articles on Malaysian startups right here.

Featured Picture Credit score: Daniel Cerventus Lim, founding father of NextUpAsia / Edwin Wang, CEO of Signature Market / Dylan Tan, founder and CEO of Replyr