Malaysia has secured a landmark deal worth$250 million with Arm Holdings to acquire the company's advanced chip design blueprints.

The agreement, which spans a decade, will enable Malaysia to produce its own AI chips, including graphics processing units, as demand for AI and data centres continues to surge globally.

The deal is part of Malaysia's broader goal to become a major player in semiconductor manufacturing over the next ten years.

Prime Minister Anwar Ibrahim confirmed that the deal will also see Arm establish its first Southeast Asian office in Kuala Lumpur. The move is aimed at strengthening the company's presence in the region, including expanding its reach to Australia and New Zealand.

Alongside this, Malaysia will invest in training 10,000 engineers to support the local manufacturing ecosystem.

The initiative is expected to drive significant economic growth, with Malaysia aiming to create 10 local chip companies, each generating annual revenues between$1.5 to$2 billion.

Malaysia aims to build a complete supply chain for advanced industries, covering everything from AI data servers to autonomous vehicles and robotics.