Malaysia discourages new data centres

KUALA LUMPUR: Malaysian Deputy Prime Minister Dr Ahmad Zahid Hamidi has discouraged investors from China from developing new data centres in the country. Zahid stated that Malaysia already possesses a significant number of data centres and does not encourage opening new ones. Instead, he suggested that interested investors should partner with existing operators or acquire them.

This advice came during a press conference following a meeting with a 58-member Chinese business delegation exploring opportunities in data centres, cloud computing, and artificial intelligence within the digital economy and technology infrastructure sector. The delegation's focus also included electrical and electronics, semiconductors, specialised industrial materials, precision engineering, food processing and halal products, health technology, and tourism.

Zahid emphasised that the Malaysian government is now prioritising high-value investments, which are non-labour-intensive. The government has yet to decide on 24 applications for new data centres, focusing instead on the delivery of 117 projects already approved. Industry experts have called for Malaysia to exercise greater caution in approving future data centre projects due to the industry's increasing strain on electricity, water, and land resources.