Government bans tech firms from using public data to train AI

The Malaysian government has moved to protect citizen privacy by inserting strict data usage clauses into its artificial intelligence procurement contracts, according to the Digital Ministry. Under the new provision, technology firms contracted to provide AI services are expressly prohibited from using public data collected through government systems to train their proprietary AI models.

The restriction represents a significant safeguard against the potential misuse of sensitive citizen information, addressing growing concerns about data exploitation in the rapidly expanding AI sector. By embedding this requirement into all AI-related government tenders, authorities aim to establish a protective framework that prevents companies from repurposing publicly-sourced data for commercial model development.

The move reflects broader regional efforts to establish clearer data governance standards as artificial intelligence technologies become increasingly integrated into government operations and public services. Officials have indicated this contractual approach will serve as a baseline protection mechanism across all future technology partnerships involving AI systems.

The clause is expected to set a precedent for private sector adoption of similar safeguards, potentially influencing how Malaysian companies handle citizen data in their AI operations. Industry observers are monitoring whether the government's approach will prompt wider policy reforms around data protection and AI governance in the technology sector.