AI City Initiative Cuts Penang Congestion by Up to 15% as Ministry Plans a Shared Algorithm Bank

Malaysia’s AI City Initiative has reduced traffic congestion in Penang by 10% to 15% and improved traffic flow in Ipoh, the Digital Ministry said in a written parliamentary reply on Monday, October 26, Business Today reported. In Ipoh, coordinated traffic-light timings cut waiting times at congested spots from two minutes to 40 seconds.

The initiative, part of the National AI Action Plan 2026-2030, has produced 28 projects across nine participating local authorities that serve as testing grounds for AI applications: the Penang Island City Council, Ipoh City Council, Kuala Lumpur City Hall, Petaling Jaya City Council, Putrajaya Corporation, Kuching North City Hall, Jasin Municipal Council, Johor Bahru City Council and Shah Alam City Council. Funding comes from the 5G Enterprise and AI City Grant, launched on August 13, 2025.

Responding to concerns about duplicated projects and isolated technology systems, the ministry said not all 156 local authorities need to develop their own AI systems. It plans an integrated data platform with an AI Algorithm Bank and an AI Marketplace so councils can share proven technologies, data and solutions. The approach follows a directive from Prime Minister Anwar Ibrahim in April and the creation of an AI City Task Force in August, under the principle of Build Once, Reuse and Scale.

What it means in practice

AI City Initiative Cuts Penang Congestion by Up to 15% as Ministry Plans a Shared Algorithm Bank — contextual photo

Measured results matter because smart-city spending is often judged on announcements rather than outcomes. If a signal-timing model that works in Ipoh can be pulled from a shared bank by another council, smaller towns get proven tools without separate procurements. The ministry also tied the programme to its proposed National Command Centre for AI-aided real-time decisions, which would combine AI analytics and a digital twin for a Thinking City concept. Reusing algorithms across councils will also lean on shared infrastructure such as the planned national AI compute exchange.

For older towns such as Muar, whose municipal council is recognised as a Level 1 Smart City Early Adopter, the ministry said its Smart Command Centre and smart waste systems could be upgraded in phases through the initiative, subject to local needs, data readiness and cooperation between the state government and the council.