A big hallway with supercomputers inside a server room information middle.
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Malaysia is rising as an information middle powerhouse in Southeast Asia and the continent extra broadly as demand surges for cloud computing and synthetic intelligence.
Over the previous few years, the nation has attracted billions of dollars in data center investments, together with from tech giants like Google, Nvidia and Microsoft.
A lot of the investments have been within the small metropolis of Johor Bahru, situated on the border with Singapore, in keeping with James Murphy, APAC managing director at information middle intelligence firm DC Byte.
“It seems to be like within the area of a few years, [Johor Bahru] alone will overtake Singapore to grow to be the biggest market in Southeast Asia from a base of basically zero simply two years in the past,” he mentioned.
Johor Bahru was named because the quickest rising market inside Southeast Asia in DC Byte’s 2024 Global Data Centre Index.
The report mentioned town has 1.6 gigawatts of whole information middle provide, together with tasks below development, dedicated to or within the early levels of planning. Knowledge middle capability is usually measured by the quantity of electrical energy it consumes.
If all deliberate capability comes on-line throughout Asia, Malaysia will solely be surpassed by the bigger international locations of Japan and India. Till then, Japan adopted by Singapore at present lead the area when it comes to reside information middle capability.
The index didn’t present an in depth breakdown of knowledge middle capability in China.
Shifting demand
The overwhelming majority of knowledge middle infrastructure and storage investments have historically gone to the established markets of Japan and Singapore, in addition to Hong Kong.
Nonetheless, the worldwide pandemic expedited the world’s digital transformation and cloud adoption, resulting in surges of demand for cloud suppliers in rising markets like Malaysia and India, in keeping with a report from global data center provider EdgeConneX.
“Elevated demand for video streaming, information storage, and something finished over the web or on a cellphone, basically signifies that there’s going to be extra want for information facilities,” mentioned Murphy.
Booming demand for AI providers additionally requires specialised information facilities to accommodate the big quantities of knowledge and computational energy required to coach and deploy AI fashions.
Whereas many of those AI information facilities can be inbuilt established markets reminiscent of Japan, Murphy mentioned rising markets may even appeal to investments as a consequence of favorable traits.
AI information facilities require quite a lot of area, power and water for cooling. Subsequently, rising markets reminiscent of Malaysia — the place power and land are low cost — present benefits over smaller city-states like Hong Kong and Singapore, the place such sources are restricted.
Spillover from Singapore
Thus, quite a lot of funding and deliberate capability has been redirected from Singapore to the bordering Johor Bahru through the years.
Singapore not too long ago modified its tune and laid out a roadmap to develop its information middle capability by 300 MW on the situation extra tasks meet green-friendly effectivity and renewable power requirements. Such efforts have attracted investments from firms like Microsoft and Google.
Nonetheless, Singapore is simply too small for wide-scale inexperienced energy technology, thus there stay quite a lot of limitations in the marketplace, mentioned DC Byte’s Murphy.
Useful resource strains
Whereas the increase in information facilities has helped elevate Malaysia’s economic system, it is also created considerations about power and water necessities.
Kenanga Funding Financial institution Analysis estimates that potential electrical energy demand from information facilities in Malaysia will hit a total maximum demand of 5 GW by 2035. The current installed electrical capacity for all of Malaysia is about 27 GW, in keeping with Malaysian electrical energy firm Tenaga Nasional Berhad.
Native officers are more and more involved concerning the extent of this energy utilization, as quoted in a recent report from The Straits Times.
Johor Bahru metropolis council mayor Mohd Noorazam Osman reportedly mentioned information middle investments mustn’t compromise native useful resource wants, given town’s challenges with its water and energy provide.
In the meantime, a Johor Funding, Commerce, and Shopper Affairs Committee official advised ST that the state authorities would implement extra tips on inexperienced power use for information facilities in June.
