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The Nobel Prize in Economics goes to prosperity researchers

Darren Acemoglu, Simon Johnson and James A. Robinson received this year’s Nobel Prize in Economic Sciences for their contributions to proving the importance of public institutions to a country’s prosperity.

KEY FACTS

  • The prestigious prize, officially known as the Sveriges Riksbank Prize for Economic Sciences in Memory of Alfred Nobel, is the last prize awarded this year and is worth SEK 11 million ($1.1 million).
  • This year’s laureates showed that one of the explanations for differences in countries’ prosperity is the social institutions introduced during European colonization. Inclusive institutions were often introduced in countries that were poor at the time of colonization, which over time led to general prosperity for the population. This is an important reason why former colonies that were once rich are now poor and vice versa.
  • Introducing inclusive institutions would create long-term benefits for everyone, but extractive institutions provide short-term gains for those in power. As long as the political system ensures they retain their control, no one will trust their promises of future economic reforms. According to the laureates, this is the reason why there is no improvement.
  • “Reducing the huge income gaps between countries is one of the greatest challenges of our time. The laureates have demonstrated the importance of public institutions in achieving this,” said Jakob Svensson, Chairman of the Economic Sciences Prize Committee.
  • “Societies with poor rule of law and institutions that exploit the population do not generate growth or change for the better,” the prize’s organizers add on their website.

TANGENT

Darren Acemoglu and Simon Johnson work at MIT, while James Robinson is at the University of Chicago.

Acemoglu and Johnson recently collaborated on a book researching technology through the ages that demonstrates how some technological advances are better at creating jobs and spreading wealth than others.

KEY STORY

The Economics Prize is not one of the original science, literature and peace prizes created by the will of dynamite inventor and businessman Alfred Nobel and first awarded in 1901, but is a later additional prize established and funded by the Central Bank of Sweden in 1968.

Past recipients of the award include a number of influential thinkers such as Milton Friedman, and John Nash – played by actor Russell Crowe in the 2001 film A Beautiful Mind, and former US Federal Reserve Chairman Ben Bernanke.

Last year, Harvard economic historian Claudia Goldin won a prize for her work highlighting the causes of pay and labor market inequality between men and women.

SoftBank Plans $50 Billion Investment In Malaysia’s AI And Data Centre Sectors

SoftBank Group plans to invest $50 billion in Malaysia, Prime Minister Anwar Ibrahim said, according to Bloomberg. The proposed investment would target artificial intelligence, emerging technologies and data centers, positioning Malaysia to compete for a larger share of Asia’s digital infrastructure buildout.

Proposed Projects Span Sarawak And Peninsular Malaysia

Anwar said SoftBank chairman and CEO Masayoshi Son identified potential locations in Kuching, the capital of Sarawak, and in peninsular Malaysia after the two held a video conference earlier in the week, Bloomberg reported. The prime minister described the plans as an investment proposal; SoftBank had not immediately responded to CNBC’s request for comment.

The scale of the proposed outlay would make it one of the largest announced technology investment plans in Malaysia. Its focus aligns with the country’s ambition to become an “AI nation” by 2030. The government launched a national AI action plan this year to build the capabilities and infrastructure needed to support that goal.

SoftBank Is Already Exploring Digital Infrastructure In Sarawak

The reported investment plan follows a framework agreement SoftBank signed earlier this month with Singapore-based Grab and Malaysia’s Petroleum Sarawak Berhad. The parties are exploring AI and digital infrastructure development in Sarawak, including AI computing services and other advanced technologies, according to SoftBank.

The agreement signals a broader effort to develop the systems behind AI adoption—not just software, but also computing capacity and the infrastructure required to run data-intensive services. For Malaysia, attracting projects across that stack could help strengthen its position as a regional technology hub.

Global Technology Firms Are Expanding In Malaysia

SoftBank’s reported plans come amid a wave of investment by major technology companies. Google announced a $2 billion investment in 2024 to build its first data center and cloud region in Malaysia. Amazon Web Services said it plans to invest $6.2 billion in the country through 2038, while Microsoft announced a $2.2 billion commitment to cloud and AI infrastructure and other digital initiatives.

Malaysia recorded 385.7 billion ringgit, or about $94 billion, in data center-related investments from 2021 through the first half of 2026, according to the Malaysian Investment Development Authority.

The next challenge will be translating headline investment figures into durable economic value: reliable infrastructure, skilled jobs and stronger opportunities for local businesses. The proposed SoftBank investment would add momentum to Malaysia’s effort to build that foundation, if the plans move forward.

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