Kuala lumpur: Prime Minister Datuk Seri Anwar Ibrahim today called on government machinery to remain vigilant against the ‘AI Productivity Paradox’ in the implementation of the country’s digital transformation agenda. He said the paradox refers to situations where large investments in artificial intelligence (AI) and digitalisation may not necessarily translate into higher productivity.

According to BERNAMA News Agency, Anwar emphasized the need for special attention by the Digital Ministry, the Communications Ministry, and department heads to avoid falling into the ‘trough of disillusionment’. This stage in the technology adoption cycle occurs when initial high expectations are unmet, leading to disappointment and declining confidence before the technology matures. Anwar, who is also Finance Minister, urged focus on data governance, integration, IT, and AI challenges with an emphasis on outcomes.

He delivered these remarks during the Prime Minister’s Monthly Assembly with staff of the Prime Minister’s Department. Present at the event were Deputy Prime Minister Datuk Seri Fadillah Yusof, Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said, and other high-ranking officials. Citing studies by the United Nations University in Tokyo, McKinsey, and JP Morgan, Anwar highlighted the concern that only a small percentage of AI adoption results in real productivity gains or income increases.

The Prime Minister called for a review of this issue, asking the Chief Secretary to the Government and department heads to provide an initial response within a month. He stressed the importance of avoiding pitfalls experienced by global corporations, where significant investments in AI did not yield expected productivity improvements. Anwar also cautioned against relying on technologies like ChatGPT as absolute sources, particularly in religious contexts, citing an example of misuse by an Islamic organization in London.

While acknowledging digital transformation as a pillar of change, Anwar urged consideration of the ‘AI Productivity Paradox’ risks. He referenced management expert Peter Drucker, suggesting that efficient government management often surpasses privatisation in effectiveness. Anwar warned that past privatisation efforts sometimes led to increased burdens and stressed the importance of governance and tender transparency.

In concluding, Anwar reiterated that privatisation does not inherently enhance productivity or efficiency, emphasizing that good governance remains the fundamental principle.