Mida urges local companies to become vendors, suppliers to hyperscalers and data centre operators

The Sun

25-06-2025

KUALA LUMPUR: More Malaysian firms should become vendors and suppliers to hyperscalers and data centre operators (such as AWS, Google and Microsoft), said the Malaysian Investment Development Authority (Mida).
CEO Sikh Shamsul Ibrahim Sikh Abdul Majid said this is part of the agency's broader 'Built by Malaysia' approach that champions local content, technology transfer and inclusive growth.
'The government is supporting this with competitive policies. The Digital Ecosystem Acceleration Scheme or DSEC offers tax allowances of up to 100% of capital expenditure,' he said in his speech at the 'Data Centre 2.0: The Ecosystem and What's Next for Malaysia' talk today.
Furthermore, he said, Malaysia Digital or MD status allows digital firms to scale across the country.
'Under Budget 2025, the new Investment Incentive Framework is being introduced, a tiered outcome-based structure that prioritises high-impact projects aligned with our national investment aspirations. We would like to see more Malaysian companies to be the potential vendors or suppliers to these hyperscalers or data center operators.'
Sikh Shamsul pointed out that Malaysia attracted RM310.7 billion in digital investments from 2021 to March 2025 with major global technology players having made commitments to Malaysia, including Google with US$2 billion (RM8.4 billion) for its first cloud data centre, Microsoft US$2.2 billion for artificial intelligence (AI) and cloud infrastructure, AWS US$6.2 billion through to2038, Nvidia and YTL US$4.3 billion for Malaysia's first AI-focused cloud data centre and Oracle over US$6.5 billion for its first Malaysian public cloud region.
'Global leaders are betting big on Malaysia. We are not just racing for more megawatts, lower latency or faster deployment. We are building a digital spine for the nation,' he said.
Sikh Shamsul reiterated that Malaysia has surpassed its national digital investment target of RM130 billion well ahead of schedule.
'More than 92,000 new jobs have been catalysed, many in frontier domains like cloud engineering, AI operations and cybersecurity. From Cyberjaya to Johor, we are witnessing one of Southeast Asia's most dynamic digital corridors,' he said.
The Digital Investment Office, a joint initiative by Mida and Malaysia Digital Economy Corporation, has facilitated these digital investments.
However, Sikh Shamsul said data centres are seen by some as power-hungry assets that yield limited local benefits.
'This perspective may not fully capture the broader and deeper value that data centres bring to Malaysia's economy. Beyond direct employment, data centres support entire value chains. From civil engineering and M&E services to cloud application development and digital transformation for SMEs.'
He said recent global shifts such as the US Department of Commerce recalibration on AI diffusion rules signal a deeper understanding that digital leadership cannot be siloed or reactive.
'It must be strategic, collaborative and bold. For Malaysia, this is a call to action. We must continue to lead with agility, vision and policy foresight.'
In her opening address, Hong Leong Investment Bank group managing director and CEO Lee Jim Leng said global developments, including US-imposed restrictions on AI chip exports will accelerate digital infrastructure investment in Southeast Asia.
She said Data Centre 2.0 is a phase where the focus shifts from basic co-location services to advanced, high-performance computing infrastructure that supports AI workloads, green innovation, and data sovereignty.
'With RM6.7 billion in approved investments and another RM3.9 billion currently in advanced hyperscale discussions, Malaysia is no longer a peripheral player in the region, and should now be positioning itself as a key digital infrastructure hub.'
Commenting on future developments, Lee said Malaysia must strengthen its position as a neutral, stable and indispensable hub for data and AI development. 'This includes implementing smart policies that support local AI innovation, protect data sovereignty, and promote the development of energy-efficient, sustainable data centres.'
Additionally, she said, deeper collaboration between government, industry players and academia will be key in ensuring Malaysia develops long-term competitiveness in high-performance digital infrastructure.
'The transition to Data Centre 2.0 is both a challenge and an opportunity. With the right strategies, Malaysia can turn global uncertainty into national advantage and solidify its leadership as a regional data centre hub in Asean.'
Meanwhile, Bursa Malaysia CEO Datuk Fad'l Mohamed said as demand for AI and high-performance computing accelerates, capital markets will play a vital role in financing the next wave of infrastructure growth. 'At Bursa Malaysia, we are focused on strengthening our marketplace to attract long-term, technology-driven investments that will support Malaysia's intent to remain as a competitive economy and a leader in Asean.'