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The Sun
27-05-2025
- Business
- The Sun
Capitalising on data centre boom
MALAYSIA has become one of Southeast Asia's most actively pursued locations for digital infrastructure in the past two years, attracting an estimated RM278 billion in digital investments between 2021 and 2024. About RM184.7 billion of this has gone into cloud infrastructure and data centre projects, making Malaysia one of the top locations in the world for hyperscale facilities and cloud computing services. The charge is led by several American tech giants, such as Microsoft, where a US$2.2 billion (RM9.25 billion) investment was announced to construct three data centres in Malaysia by the second quarter of 2025. In addition, Google is investing US$2 billion to build its first data centre and cloud facility here, which is expected to generate 26,500 jobs and US$3.2 billion in economic activity by 2030. All indicators suggest that Malaysia's digital economy is expanding to unprecedented levels. However, the important question is whether Malaysia is reaping the benefits of this infrastructure or are we just contributing land and electricity to someone else's digital empire? Beyond the hype Data centres serve as the internet's invisible foundation. All AI queries, cloud documents, messages and searches go through their servers. Attracting them may seem like a huge victory, and in some respects, it is. They express confidence among investors in Malaysia's connectivity, energy supply and political stability. However, data centres by themselves are not major employers. Typically, a hyperscale facility may generate between 100 and 200 permanent positions, mostly in technical maintenance, security and facility management. Instead, construction, electrical work, HVAC (heating, ventilation and air conditioning) installation and supply chain services account for the majority of job growth. Microsoft projects that nearly 37,000 jobs will be supported by the investment, which will also create US$10.9 billion in downstream value over a four-year period. The true economic concern, however, is whether this value can be retained in Malaysia rather than be diverted abroad through deals, earnings and data repatriation. Digital infrastructure We are constructing the digital economy's hardware but are we also building its ownership and capabilities? This is a silent worry as Malaysia presents itself as a digital hub. Foreign corporations will profit from the majority of the data handled in these centres, which will service clients worldwide and are subjected to foreign regulations. Without meaningful stakes in the software, platforms or intellectual property layered on top of that infrastructure, Malaysia risks becoming the industrial park of the digital world: essential but easily replaceable. The idea of digital sovereignty becomes crucial at this point. We must have a national policy that guarantees that: Malaysian law regulates the data created and kept here; Cloud computing capabilities are available to researchers and local businesses; Schools prepare students for the skills of the future with cloud-native technology; And critically, rather than merely hosting foreign IT giants, we are also developing homegrown ones. Environmental cost There is also a quieter cost – energy and water. Data centres are notoriously resource-intensive. The industry is putting a burden on power systems throughout the world as each factory uses energy that frequently exceeds 100MW. Electricity rates in Malaysia are anticipated to increase by 14.2% in July 2025. Some businesses are already looking into solar and other options but it is crucial that the ecosystem as a whole follow suit to pursue a sustainable economy. Constructing more than server rooms Malaysia's data centre boom can be revolutionary only if it is a component of a larger and strategic digital industrial policy. Here is how we can become a digital leader instead of just being a data landlord: Ensure local involvement in high-skilled operations like data analytics, AI services and cybersecurity. Take advantage of tax breaks for R&D, startup incubation and local cloud services in addition to construction. Include goals for renewable energy in all digital infrastructure projects to meet global ESG standards. Increase collaborations between academia and businesses by integrating instructors and students into cloud and data science settings. While policymakers should be optimistic about the billions pouring into Malaysia's data centre industry, it is also one that raises questions worth considering. Who is the data owner? Who truly benefits from this expansion? And who is shaping the policies that will govern our digital future? Malaysia is in a unique position to take the lead in Southeast Asia's digital revolution. However, including more vision, value and sovereignty into our digital strategy will be the key to leadership, not adding more servers. If we do not explore these questions now, we may discover a decade from now that we have built the highways to the cloud but left our people stuck on the ground. Galvin Lee Kuan Sian is a lecturer and programme coordinator for the Diploma in Business programme at the School of Diploma and Professional Studies, Taylor's College.
Rakyat Post
15-05-2025
- Business
- Rakyat Post
Malaysia's Data Centre Boom: Building For The Future, Or Just Hosting It?
Malaysia has become one of Southeast Asia's most actively pursued locations for digital infrastructure in the past two years, attracting an estimated RM278 billion (USD59.4 billion) in digital investments between 2021 and 2024. About RM184.7 billion (USD39.4 billion) of this has gone into cloud infrastructure and data centre projects, making Malaysia one of the top locations in the world for hyperscale facilities and cloud computing services. The charge is led by several American tech giants, such as Microsoft, which announced a RM10.2 billion (USD2.2 billion) investment to construct three data centres in Malaysia by the second quarter of 2025. Google is also investing RM9.3 billion (USD2 billion) to build its first data centre and cloud facility here, expected to generate 26,500 jobs and RM14.9 billion (USD3.2 billion) in economic activity by 2030. All indicators suggest that Malaysia's digital economy is expanding to unprecedented levels, but the more important question is whether Malaysia is actually reaping the benefits of this infrastructure—or if we are simply contributing land and electricity to someone else's digital empire. Beyond The Hype: What's Actually Being Built? Data centres serve as the internet's invisible foundation. All AI queries, cloud documents, messages, and searches go through their servers. Attracting them may seem like a huge victory—and in some respects, it is. They express confidence among investors in Malaysia's connectivity, energy supply, and political stability. However, data centres by themselves are not major employers. Typically, a hyperscale facility may generate between 100 and 200 permanent positions, mostly in technical maintenance, security, and facility management. Instead, construction, electrical work, HVAC (Heating, Ventilation, and Air Conditioning) installation, and supply chain services account for the majority of job growth. Microsoft projects that nearly 37,000 jobs will be supported by its investment, which is also expected to create RM49.4 billion (USD10.9 billion) in downstream value over a four-year period. The true economic concern, however, is whether we can retain this value in Malaysia—or if it will be diverted abroad in the form of deals, earnings, and data repatriation. Digital Infrastructure Without Digital Sovereignty We are constructing the digital economy's hardware—but are we also building its ownership and capability? This is a silent worry as Malaysia positions itself as a digital hub. Foreign corporations will profit from most of the data handled in these centres, which will service global clients and be subject to foreign regulations. Without meaningful stakes in the software, platforms, or intellectual property layered on top of that infrastructure, Malaysia risks becoming the industrial park of the digital world: essential, but easily replaceable. The idea of digital sovereignty becomes crucial. We must have a national policy that guarantees: Malaysian law regulates the data created and stored here; Cloud computing capability is accessible to researchers and local businesses; Schools are preparing students with cloud-native technology and future-ready skills; And critically, rather than merely hosting foreign IT giants, we are also building Malaysian ones. The Environmental Cost Of Progress There is also a quieter cost—energy and water. Data centres are notoriously resource-intensive. Globally, the industry is putting a strain on power systems, with each facility often using more than 100MW. Electricity rates in Malaysia are expected to increase by 14.2% in July 2025. Some companies are already exploring solar and other sustainable alternatives, but it is crucial that the ecosystem as a whole follows suit to support a greener digital economy. Ideas: Constructing More Than Just Server Rooms Malaysia's data centre boom will only be revolutionary if it is part of a broader, strategic digital industrial policy. Here's how we can become a digital leader instead of just a data landlord: Require local involvement in high-skilled operations like data analytics, AI, and cybersecurity; Extend tax breaks not just for construction but for R&D, start-up incubation, and local cloud services; Make renewable energy goals mandatory in digital infrastructure projects to meet global ESG standards; Strengthen academia-industry collaboration by integrating instructors and students into real-world data science environments. Policymakers should certainly be optimistic about the billions flowing into Malaysia's data centre industry. But the real questions remain: who owns the data? Who truly benefits from this expansion? And who is shaping the policies that will govern our digital future? Malaysia is uniquely positioned to lead Southeast Asia's digital revolution. But true leadership will require vision, value, and sovereignty—not just servers. If we do not address these questions today, we may wake up in a decade to find we've built the highways to the cloud but left our people stranded on the ground. Galvin Lee Kuan Sian serves as Lecturer & Programme Coordinator for the Diploma in Business programme at the School of Diploma & Professional Studies, Taylor's College. With more than six years of experience in secondary and tertiary education, Galvin aspires to bring the best out of every student that comes under his guidance through robust teaching and learning pedagogy. Get more stories like this to your inbox by signing up for our newsletter.
The Sun
08-05-2025
- Business
- The Sun
Malaysia: Data centres driving tech nation ambition
KUALA LUMPUR: The data centre sector can be a catalyst for Malaysia to become a technology nation, said Deputy Minister of Investment, Trade and Industry Liew Chin Tong. He said that data centres could become the largest off-takers to boost Malaysian technologies, helping the country achieve its industrial and energy transition aspirations by adopting a 'whole-of-value-chain' investment approach. 'While data centres are not new to Malaysia, the idea of Malaysia becoming a data centre hub that fulfils not only domestic usage but also external demand is relatively new. 'The new wave only took off in a big way in 2021, thanks to the entry of hyperscalers and the ecosystem around them,' he said at the Data Centre Nexus 2025 event in Bangsar today. Liew expressed hope that Malaysia could build a broad-based consensus among all stakeholders to ensure the data centre sector achieves three key objectives. He said the first objective is for the sector to grow sustainably, both financially and environmentally. 'The second objective is to enable a 'whole-of-value-chain' growth—from renewable energy sources to the local equipment supply chain, to a robust service sector that develops expertise in building and maintaining data centres. 'The third objective is that the sector's development should bring maximum benefit to Malaysia and Malaysians, maintaining the social license and broad-based public support for the sector,' he said. Liew noted that Malaysia attracted RM278 billion in digital investments from 2021 to December 2024, with RM184.7 billion allocated for data centre-related projects, including data centres, cloud computing, data hosting, and others. He also outlined three missions that the data centre sector could focus on. 'First, leading the way in the energy transition, as the world shifts away from coal to low-emission sources in power generation. 'In Malaysia, the energy transition is much slower compared to other countries. As the most important factor in the growth of energy demand, I would like to see the data centre sector become the most dynamic off-taker for renewable energy in Malaysia,' he said. Second, Liew highlighted the need for investment in a Malaysian equipment supply chain, stressing the urgent need to localise it. 'For a variety of reasons, I strongly believe that with the data centre sector as an off-taker, we could build a non-United States, non-China supply chain that will eventually serve the world. 'I would like to see the data centre sector invest in this together, creating a 'Build by Malaysia' era. More horizontal connections between the data centre sector and the semiconductor industry are something I hope to see developed as quickly as possible,' he said. Liew said the third mission is to create data centre service jobs for Malaysia and the region. 'As more and more data centres are built in Malaysia, we would like to see a concerted effort to nurture a new generation of engineers for both the construction, maintenance, and operations of the data centres,' he added. 'I would like to see more emphasis on job creation across the entire value chain of the data centre sector,' he added.
