Malaysia’s export machine is in formidable shape, giving a country that once aspired to become an advanced economy a second chance at stardom. As a sometime sharp critic of the ebbs and flows of global capitalism, the nation should seize the opportunity and worry about an AI bust later.

The semiconductor boom could lay the foundation for the next stage in economic development, if investments are timed right. Masayoshi Son, founder of SoftBank Group Corp., is ready to pour $50 billion into the economy by way of investments in AI infrastructure, and the northern state of Penang is dredging the sea to create a “Silicon Island” to house the next wave of technology manufacturing.

Malaysia lost much of its spark after the Asian financial crisis of the late 1990s and acknowledged that its ambitions to become an advanced economy by the start of this decade weren't realistic. The surge in demand for AI-related products might be just what it needs to navigate a new way forward. Overseas shipments jumped more than 50% in September from a year earlier to a record. That followed a hefty 45% leap the previous month. Gross domestic product expanded by a robust 5.3% in the third quarter, beating most estimates.

These types of figures aren't as stratospheric as in South Korea, where exports climbed by two-thirds in the first 20 days of this month, boosted by strong ties to tech ecosystems in China and the US. But Malaysia's pace of economic expansion is eclipsing those powerhouses. And it's now getting another lift from companies including from South Korea expanding their presence. That’s just as Malaysia closes in on the World Bank’s high-income threshold, which would put it head and shoulders above the rest of Southeast Asia, aside from Singapore and oil-rich Brunei.

Few might have predicted the surge 18 months ago, when US President Donald Trump announced sweeping tariffs. There was widespread concern that trade would be severely set back — and near unanimity that the era of globalization was at an end. The purchase and sale of goods by international customers was, however, on the cusp of a renaissance and Malaysia a top beneficiary.

Malaysia has been buoyed by this enormous miscalculation. A recent report from the World Trade Organization forecast that trade in goods will grow 3.9% this year and 4.1% in 2027. Both figures are better than prior estimates and easily exceed forecasts for global GDP.

But for all its success, Kuala Lumpur always nursed serious reservations about the side effects. It feared a loss of sovereignty and indulged in occasional crackdowns. Mahathir Mohamad, the country's longest-serving premier, whose final stint ended in 2020, implored citizens to “buy British last.”During the region’s financial meltdown, he railed against currency traders and depicted the crisis as an anti-Muslim conspiracy hatched by billionaire financier George Soros. In 1998, he imposed capital controls.

Malaysia’s reputation as a reliable economic partner was set back, but not permanently. Thankfully, the current team under Prime Minister Anwar Ibrahim shows little interest in philosophical crusades.

They are building on a solid foundation. Steps to open the economy in the 1970s was a rehearsal for the recent upturn. Intel Corp is lionized for its early bet on Penang, an entrepot developed in the late 18th century by the East India Co. that subsequently languished when colonial commercial interests began focusing on Singapore to the south. Its provincial leaders were scouting for ways to diversify from fishing and tourism. Western Digital Corp. and Micron Technology Inc. are among household names that followed.

Fearful of missing out on further advances, Penang, whose project will cover an area almost three times the size of New York’s Central Park, is now trying to buttress its place. Officials say the state accounts for about 5% of the world’s semiconductor exports. But for all the abundance, there’s vulnerability: Its prowess lies in chip assembly and testing. The higher value areas, such as design and advanced packaging, are yet to have a significant presence. Executives have been pushing this for years, and the AI surge might provide just the incentive.

Malaysia is going all in on globalization's staying power. But what if this results in a bust? Market enthusiasm has waned amid concern about overspending and when it will pay off in a meaningful way. Research firm Gartner Inc. estimated that more than $3.5 trillion of AI infrastructure spending could be at risk of impairment by 2030 if revenue fails to justify the outlays. In a worst-case scenario, what looks like smart, long-term public works aimed at exploiting technology’s mania could become another mega project that failed its early promise.

For Southeast Asia, this looks like a problem for another day. Malaysia may never truly love hitching economic prospects to foreigners, but it has repeatedly found them useful. Bank on the country, for now.