KUALA LUMPUR: Malaysia will pay Arm Holdings $250 million over 10 years to acquire the firm's chip design plans for local manufacturers, the economy minister told Bloomberg TV on Wednesday.

The Southeast Asian nation plans to produce its own graphics processing unit chips in the next five to 10 years as demand for artificial intelligence and data centres grows.

Economy Minister Rafizi Ramli said the government will pay Arm for its intellectual property, including seven of its high-end chips design blueprints.

Malaysia hopes the deal with Arm will allow domestic producers to scale up, creating 10 local chip companies with yearly revenue of $1.5 to $2 billion each, Rafizi said in the interview.

A host of technology giants, including Microsoft, Nvidia, Alphabet unit Google, and China's ByteDance, have announced billions of dollars of digital investments in Malaysia since 2023, mostly in cloud services and data centres, powering an infrastructure boom driven by growing AI demand.

Last April, Malaysia said it planned to build Southeast Asia's largest integrated-circuit design park and would offer incentives including tax breaks, subsidies and exemption from visa fees to attract global tech companies and investors.

Prime Minister Anwar Ibrahim said the park will house world-class anchor tenants and collaborate with global companies such as Arm.