Malaysia’s data centre boom: How it affects jobs, electricity and water

Malaysia is experiencing a data centre boom due to increased demand for digital services and artificial intelligence. These facilities, which house computer servers and other equipment, provide the infrastructure behind many digital services. Malaysia has attracted significant investment in data centres, with RM95.8 billion approved in the first half of 2026 alone, accounting for nearly 44% of the country's total approved investments in the period.

The United Nations Conference on Trade and Development (UNCTAD) ranks Malaysia among the top 10 destinations for data centre projects.

The boom creates jobs and business opportunities in various sectors such as construction, engineering, telecommunications, and facilities maintenance. For instance, Amazon Web Services (AWS) predicts that its Malaysia region will support more than 3,500 full-time-equivalent jobs annually through 2038. Additionally, students can benefit from training opportunities in areas like data science, engineering, cybersecurity, and data centre technician roles.

Data centres also have indirect impacts on Malaysians through the digital infrastructure they support. Cloud computing services, for example, enable small and medium-sized enterprises to access computing power and storage without investing in their own servers. This allows businesses to digitize their operations, such as running websites and processing orders.

However, the increased electricity demand from data centres is a crucial factor to consider. As of December 2025, Peninsular Malaysia's peak electricity demand from data centres was 849MW, projected to rise to 4,811MW by 2030. The government plans to generate up to 9,600MW of additional capacity, expected to come online between 2028 and 2031, which will replace existing power plants slated for retirement by 2030.

While data centres do not directly cause household electricity bills to rise, they must be incorporated into electricity planning, and the cost of infrastructure needed to serve this demand must be managed. The government is reviewing projections to ensure the efficient use of electricity infrastructure and prevent costs from being shifted to other consumers.