Malaysia’s sovereign wealth fund, Khazanah Nasional Bhd, is ramping up investments aimed at strengthening the country’s power infrastructure and supporting domestic semiconductor firms as artificial intelligence (AI) drives a new global investment cycle. With AI rapidly redefining what constitutes an “investable” asset, reliable energy supply and grid resilience have emerged as critical factors for competitiveness.

Speaking at the World Economic Forum in Davos, Khazanah Managing Director Amirul Feisal Wan Zahir emphasized that the explosive growth in AI computing demand requires robust and affordable energy systems. While many global investors are focusing on data centers, Khazanah is taking a more foundational approach by prioritizing grid resilience and access to cheap, reliable power, including renewable energy. This strategy is designed to ensure Malaysia can sustainably scale its AI and digital infrastructure.

Backing Local Semiconductor Firms to Move Up the Value Chain

In parallel, Khazanah is exploring ways to finance the capital needs of Malaysian semiconductorcompanies, with the aim of helping them move up the value chain—particularly into advanced chip packaging technologies. This focus aligns closely with national industrial priorities to deepen Malaysia’s role in the global semiconductor ecosystem.

Prime Minister Anwar Ibrahim announced in May 2024 that Malaysia aims to attract at least 500 billion ringgit ($123.40 billion) in semiconductor investments. The plan includes more than $5.3billion in fiscal incentives, as well as initiatives to build domestic capabilities in chip design and advanced packaging. Khazanah’s investment strategy supports these ambitions by strengthening local firms’ competitiveness and technological depth.

Portfolio Growth, Global Expansion, and Currency Outlook

Khazanah manages a diversified portfolio spanning multiple asset classes, sectors, and geographies, with holdings in major entities such as CIMB Group, Malaysia’s second-largest lender, and Malaysia Aviation Group. In 2024, the fund reported a 22% increase in net assetvalue, rising to 103.6 billion ringgit ($25.57 billion) from 84.8 billion ringgit the previous year.

Amirul Feisal noted that the international share of Khazanah’s portfolio is expected to expand gradually over time. On currency matters, he said there is “room” for the Malaysian ringgit to strengthen, although any appreciation will largely depend on movements in the U.S. dollar and ongoing uncertainty surrounding U.S. interest rate policy. He declined to provide a specific target for the currency.