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

Malaysia is experiencing a surge in data centre development due to the growing demand for digital services and artificial intelligence. These facilities store, process and transmit data, providing the infrastructure for cloud computing and AI-powered services. While the impact on households may not be immediately evident, the boom has far-reaching implications for jobs, business opportunities, and infrastructure.

A data centre houses computer servers and other equipment necessary for data storage, processing, and transmission. Modern data centres support cloud computing and AI services, enabling businesses to access digital capabilities. Malaysia has attracted significant investment in data centres and cloud computing, with RM95.8 billion in approved investments by the first half of 2026, accounting for nearly 44% of Malaysia's total approved investments during the same period.

Malaysia is also ranked among the world's top 10 destinations for data centre projects by the United Nations Conference on Trade and Development (UNCTAD).

The boom in data centres creates jobs and business opportunities in various sectors, including construction, engineering, electrical work, telecommunications, and facilities maintenance. Companies like Amazon Web Services (AWS) expect its Malaysia region to support over 3,500 full-time-equivalent jobs through 2038. The industry also provides training opportunities for students, such as graduate engineering programmes and specialised data centre technician programmes.

Moreover, data centres can foster opportunities for Malaysian companies to become suppliers, creating demand for architectural, construction, engineering, and electrical contractors.

While data centres' electricity demand may not directly impact household bills, it plays a crucial role in the country's overall power planning requirements. As of December 2025, the peak electricity demand from all data centres in Peninsular Malaysia was 849MW, projected to rise to 4,811MW by 2030. The government plans to add up to 9,600MW of new generation capacity between 2028 and 2031 to meet this demand.

However, actual electricity consumption by data centres nationwide is currently 603MW, which is about 47% of the declared maximum, indicating potential underutilization of infrastructure.

Data centres also rely on water for cooling purposes. Recent figures show that data centres in Malaysia consume approximately 0.47 million litres of water per day.