The announcement comes amid a wave of investments by global tech firms in Malaysia over the past year, as they seek to build critical infrastructure to cater to growing demand for their cloud and AI services.

Anwar said Malaysia's national cloud policy will focus on four core areas, namely public service innovation and efficiency, economic competitiveness and growth, strengthening user trust and data security, and empowering citizens through digital inclusivity.

The government would also set up a national AI office to coordinate initiatives, including completing a five-year technology action plan as well as a regulatory framework to increase adoption of ethical and sustainable AI within the next 12 months, he said.

"We aim to position Malaysia as a hub for generative artificial intelligence and investments from tech partners will be critical in building a robust and secure digital infrastructure," Anwar said at a ground-breaking ceremony for Google's new $2 billion data centre and cloud region in the country.

Google, which this week announced a multi-year partnership with a local tech firm to provide sovereign cloud services, said its investments in Malaysia would create 26,500 jobs and contribute more than $3 billion to its economy by 2030.

"Our investments are designed to provide high performing and reliability, meeting demand for cloud and AI services across the country," Google President and Chief Investment Officer Ruth Porat said.

Digital investments have helped propel Malaysia's economy this year, with growth beating market expectations in the last two quarters and the ringgit currency becoming one of Asia's top performers.

Google's moves are a part of a wider expansion by global tech companies into Southeast Asia, as they vie for a greater presence in a region with a young tech-savvy population of 670 million.

On Monday, Google said it would invest $1 billion in Thailand to build a data centre and cloud region there, to meet growing cloud demand and support AI adoption in Southeast Asia.

(Reporting by Rozanna Latiff and Danial Azhar; Editing by Martin Petty)