What is MDAG-AI?
Malaysia Digital Acceleration Grant – Artificial Intelligence (MDAG-AI) is a strategic funding initiative by MDEC designed to accelerate the growth of Malaysia Digital companies that develop and commercialise AI solutions. It supports high-impact projects aligned with the national AI investment strategy, targeting companies with validated AI technologies across the Foundation, Enabling, and Application layers.
Advance
To encourage and promote strategic, high growth and high impact activities in the digital focus areas in moving up the value-chain and ecosystem
Accelerate
To accelerate business activities that bring significant impact to Malaysia’s Digital Economy in the context of expansion or enhancement of operations via technology adoption and continuous digital innovation
Thrive
To ensure competitive and sustainable growth of the companies and be the testament of Malaysia as digital economic powerhouse
Thrive
To ensure competitive and sustainable growth of the companies and be the testament of Malaysia as digital economic powerhouse
Advance
To encourage and promote strategic, high growth and high impact activities in the digital focus areas in moving up the value-chain and ecosystem
Accelerate
To accelerate business activities that bring significant impact to Malaysia’s Digital Economy in the context of expansion or enhancement of operations via technology adoption and continuous digital innovation
Thrive
To ensure competitive and sustainable growth of the companies and be the testament of Malaysia as digital economic powerhouse
Advance
To encourage and promote strategic, high growth and high impact activities in the digital focus areas in moving up the value-chain and ecosystem
Malaysia Digital Promoted Sectors
We are supporting the development of technologies under Malaysia Digital's 9 key sectors:
Digital Agriculture
Digital Services
Digital Cities
Digital Health
Digital Finance
Digital Trade
Digital Content
Digital Tourism
Islamic Digital Economy
*Not limited to the above-mentioned sector.
Scope Of Evaluation
Company Background
Reference should be past track record (where applicable), together with the branding and any other relevant information. Some criteria may include the following:
- Brand name;
- Expertise; and/or
- Influence in industry such as awards or recognition
Value Proposition (VP)
a. VP Operational and Capital Expenditure Growth / Spillover
- Local spending and capital growth, return of investment, benefits to Malaysia, both direct and indirect, where applicable; and
- Other potential spill-over/benefits to local ecosystem and value-chain
b. VP: Export / Jobs
- Projected export revenue as a percentage of total revenue
- Total knowledge worker
- New knowledge worker that will be created
AI
AI technology ownership, AI development maturity, In-house AI research and development capabilities, AI solution category, AI impact and differentiation
Others
Academia linkages. Further details subject to MDEC discretion as it deems fit
Eligibility Criteria
Eligible company
- Incorporated in Malaysia under Companies Act 1965 or the Companies Act 2016; and;
- Minimum issued share capital of at least RM50,000.00.
In operation for at least one (1) year as of the date of submission.
The Applicant/Recipient must be Malaysia Digital (MD) or MSC Malaysia status company;Or The Applicant must have an active submitted application for Malaysia Digital (MD) status company at the time of the Grant application.
The Applicant/Recipient must have AI products and/or services that are segmented into any of these three primary layers:
Foundation Layer (Infrastructure & Core Technology)
- Consists of company(ies) and technology(ies) that provide the core building blocks of AI systems
- Computer hardware – accelerator chips optimized for model training and inference workloads.
- Cloud platforms & AI Infrastructure Company – Providing scalable cloud computing resources optimized for AI workloads (training, inference, data storage).
- Consists of company(ies) and technology(ies) that provide the core building blocks of AI systems
Enabling Layer (Model Development & Deployment)
- Focuses on transforming foundational technology(ies) into deployable, scalable tool(s) and service(s)
- Foundation Model Development & API Access: Taking large, pre-trained models and making them accessible via APIs for developers to build on top of. This often includes fine-tuning and adapting models for specific use cases.
- Custom models: Models released as trained weights
- Focuses on transforming foundational technology(ies) into deployable, scalable tool(s) and service(s)
Application Layer (AI-Enabled Solutions)
- Includes end-user application(s) or AI-powered solution(s) tailored to specific sector(s) or general consumer(s)
- Applications: Application that use foundation models as they are or as customized for a specific use case.
- Consulting & Integration: Companies that help other businesses implement and customize AI solutions.
- Includes end-user application(s) or AI-powered solution(s) tailored to specific sector(s) or general consumer(s)
*Reference: Statista Unleashing Artificial Intelligence's true potential; What is AI infrastructure? (IBM)
Not the subject of liquidation/winding up/bankruptcy order and has no going concern issue*. [*If the Applicant/Recipient has going concern issue (as reported in their latest audited account), the Applicant/Recipient is to provide a letter of undertaking by the shareholder and/or authorised director (whichever applicable as per the Applicant/Recipient's level of authority) to undertake that in the event that their application is approved, the Applicant/Recipient shall perform its obligations under the terms and conditions to be issued by MDEC and the said shareholder and/or authorized director to provide financial support to the Applicant/Recipient to enable the Applicant/Recipient to meet its obligations and/or liabilities under the terms and conditions.]
Director(s) and shareholder(s) of the eligible Applicant/Recipient to declare and disclose if there is any business relationship and/or family relationship with any of MDEC's Employee/Individual Consultant/director. The declarant shall not involve in the Grant and shall have no voting power in the decision-making process relating to the Grant. For avoidance of doubt, family would mean spouse, parent, grandparent, child, including adopted child and stepchild, grandchild, brother, sister, son-in-law, daughter-in-law, brother-in-law, sister-in-law, uncle, aunt, cousin.
Director(s) and shareholder(s) of the eligible Applicant/Recipient to declare if they are under any litigation or legal proceeding. i.e. litigation/legal proceeding related to criminal offences, offences under any applicable laws, insolvency, or cases related to MDEC.
Director(s) and shareholder(s) of the eligible Applicant to declare if they are blacklisted by Malaysian authorities/enforcement bodies including but not limited to Malaysian Anti - Corruption Commission (MACC), Bank Negara Malaysia (BNM), Securities Commissions Malaysia (SC) and Malaysia Digital Economy Corporation (MDEC). In the event, the director(s) and shareholder(s) are blacklisted, the said Applicant shall be disqualified.
The Applicant/Recipient with common shareholder(s) can only apply for one (1) grant) administered by MDEC at any one time (this requirement is not applicable to registered and active Venture Capital Investors, accredited angel investor, registered market operator and government agencies e.g.: Equity Crowdfunding Platforms).
Requirements for Venture Capitals:
- The venture capitals are(is) required to invest its funds actively within a 10-year timeframe and/or be officially registered with local regulatory authorities and shall have a minimum of six (6) months in operation from the date of incorporation.
Requirements for Angel Investors
- The angel investor(s) MUST be registered, accredited by local association/body (Malaysian Business Angel Network) and hold less than 20% of equity ownership; or
Individual Angel Investors MUST fully fit into these three (3) criteria:
- Hold less than 20% of equity ownership;
- Does(do) not hold any directorship of the company; and
- Non-related party(ies) to the Applicant/Recipient.
Sourced from MBAN: https://www.mban.com.my/about-us
The Applicant/Recipient shall not have any on-going grant with MDEC/other government agencies.
If the Applicant/Recipient previously has received any MDEC/government grant*, the Applicant/Recipient must:
- Demonstrate the completion of the funded project(s); and
- Declare any notice of non-compliance/breach being recorded during the period of the funded project(s). Past MDEC grant recipients can only reapply after one (1) year from the project completion date (grant closure email date) or duration as may be determined by the Approval Authorities only if required (internal information).
*Limited to five (5) years records from the date of approval of the Grant
The Director(s) and shareholder(s) of the Applicant/Recipient shall not owe any amounts to MDEC due to clawback issues from previous grants.
Any other eligibility criteria as MDEC deems appropriate.
Specific Condition
Recipient must be approved MD or MSC Malaysia Status company:
- Throughout the Grant Period; or
- Upon final disbursement of the claimable amount
Application Process
Step 1
Download "Application Kit"
Step 2
Click "Apply Now"
Step 3
Click "Start Application"
under "Application Form"
Proceed to "Log in or register"
with your credentials to GAIN Awards Platform
Step 4
Select department and programme
Department - "Grants and Funding Facilitation"
Programme - "Malaysia Digital Acceleration Grant – Artificial Intelligence (MDAG-AI)"
Step 5
Provide your company details and upload your application form with supporting documents
Step 6
Click "Submit Application"
once completed
Step 7
Completeness & compliance checking by MDEC
Step 8
Pitching session
by applicant
Step 9
Approval process
Step 10
Application result
Frequently Asked Questions
- Drive AI adoption through technology enhancement and innovation.
- Strengthen the local AI ecosystem via job creation and knowledge transfer.
- Position Malaysia as a regional AI hub through high-growth digital investments.
Eligible expenses include:
- Rental on the operational for business premises as stated in SSM or data centre.
- Rental expenses for premise(s) used directly for business operation(s) or project execution(s)
- Must be a valid commercial property(ies) used by the Recipient during the Grant Period.
- External training.
- Training programme(s) attended by Full-Time Employee(s) to upskill
- Research & Development
- Eligible R&D cost(s) to develop new or improved product(s), service(s) or technology(ies) related to AI
- Includes capital equipment(s) and operational expense(s)
- Salary
- Salary(ies) of Full-Time Employee directly involved with the contracted KPI(s)
- Salaries, limited to individuals directly contributing to the company. Exclusions for the directors, shareholders, C-level executives, non-executive personnel (e.g. interns, despatch, driver, clerk etc.)
- Marketing & Sales Enablement for the Recipient
- Exhibition(s), conference(s), virtual/physical international trade fair(s), marketing/promotion and campaign(s)
- Sales management tools (e.g. Salesforce, HubSpot)
- Design and/or Manufacturing Services cost related to expenses on AI Product /Solution
- Cost incurred by the third party appointed/engaged by the Applicant/Recipient for the development of the project, including testing and certification cost(s). Any engagement of a third party must not have any family or business relationship (including the director(s) or shareholders) and shall not be related to the Recipient (not including Venture Capital Investors and registered market operator e.g.: ECF platforms). For avoidance of doubt, family relationship would mean spouse, parent, grandparent, child, including adopted child and stepchild, grandchild, brother, sister, son-in-law, daughter-in-law, brother-in-law, sister-in-law, uncle, aunt, cousin.
- An example of this would be a company developing a smart camera. They would design the camera system including the optical system and industrial design but pass the design of the AI inference chip to an IC design services company (design services). Once the chip design is finalised, the chip will be fabricated at a wafer fabrication plant, packaged at an assembly and test plant and shipped to an electronics manufacturing services company for final printed circuit board assembly into the finished product (smart camera).
The following are non-eligible expenses to be claimed under the Approved Claimable Cost:
Non-eligible expenses:
- Outsourcing costs (except for item no. 6 of Allowable Cost Table in paragraph 5.2 above - Design and/or Manufacturing Services cost related to expenses on AI Product /Solution);
- IP Filing
- Maintenance of plant/equipment
- Mobile phones
- General operating expenses, including but not limited to employee mobile bills, utilities, printing, internet, insurance, secretarial, and audit fees;
- Travelling-related expenses including transportation, mileage, flight(s), accommodation(s), food and beverage(s);
- Marketing costs unrelated to AI deliverables such as souvenir(s), merchandise item(s), gift(s), printer(s), scanner(s) and/or related;
- Costs associated with client entertainment or meetings with potential clients (e.g., meal(s), hospitality, mileage);
- Any form of taxes, service charges and duties;
- Incentives of a political or faith-based nature, including political campaigns, religious donations, or affiliations;
- Depreciation cost(s) and amortisation;
- Debt-related costs, including debt servicing, interest charges, and financial restructuring;
- Legal or financial penalties, including litigation, fines, or settlements;
- Bank-related charges, including transfer fees, guarantee costs, and similar financial service fees;
- Foreign exchange losses, conversion fees, or hedging losses; Provision for future liabilities, reserves, or impairment;
- Payments to third parties not involved in the contracted project delivery or not clearly linked to KPI outcomes;
- Retrospective costs, expenses incurred before the date of Grant approval; or
- Any expenditure not substantiated by proper documentation.
- MDEC to reimburse and pay to the Recipient the amount of the approved claimable cost incurred by the Recipient upon satisfactory completion of each – KPI achievement and submission of relevant supporting documents within the timeline specified in the terms and conditions to be issued by MDEC subject to the approval by the Approval authorities.
- For the quarterly claim submission, the first 3 quarters of the year, the Recipient will submit self-declaration from an authorized signatory of the Recipient. The submission shall include the financial details relating to the Grant (in such format as may be specified by MDEC) and KPI(s) achievement. For quarter 4 of the year or upon completion of the Grant, the Recipient will do the same but an external auditor needs to be appointed to verify the claims and KPI (s) achievement for the whole year. The external auditor shall be appointed by the Recipient at the Recipient's own costs, together with evidence acceptable to MDEC, confirming among other things, the amount of approved claimable costs incurred and requested by the Recipient. Figures on the KPI(s) achievement submitted for the first three quarters of the year by the Recipient shall be accepted by MDEC in reliance to the self-declaration submitted by the Recipient.