Malaysia is emerging as Southeast Asia's data powerhouse more broadly as demand increases in the cloud computing and artificial intelligence (AI) industries.
Over the years, the country has attracted billions of dollars in data center investment including from tech giants such as Google, Nvidia and Microsoft.
According to James Murphy, Managing Director of APAC, most of the investments are located in the small town of Johor Bahru which is near the Singapore border.
In a few more years, Johor Bahru has great potential to overtake Singapore to become the largest market in Southeast Asia from a zero base two years ago.
The city in the south of the peninsula is listed as the fastest growing location in Southeast Asia in the DC Byte Global Data Center Index 2024.
Additionally, the city has 1.6 gigawatts of total data center supply including projects in the early stages of construction. Data center capacity is usually measured by the amount of electricity used.
Asia-wide online capacity shows that Malaysia is capable of surpassing Japan and India. Previously, Japan and Singapore led the region in terms of live data center capacity.
However, the Index does not provide a detailed breakdown of data center capacity in China.
The rapid boom in demand in AI services requires dedicated data centers to house the large amounts of data and computing power needed to train AI models.
Johor Bahru City Council Mayor Mohd Noorazam Osman said the data center investment should not affect the needs of local resources given that the city's current challenges are water and energy supply.
An official from the Johor Investment, Trade and Consumer Affairs Committee told the Straits Times that the state government will implement more guidelines on the use of green energy for data centers in June.
