Malaysia Emerges as Data Center Powerhouse amid Booming AI Demand

DateJun 22, 2024

Driven by a surge in demand for cloud computing and artificial intelligence technology, Malaysia is quickly becoming a major hub for data centers in Southeast Asia and throughout the continent. Leading tech firms like Google, NVIDIA, and Microsoft have invested billions of dollars in data centers around the country in recent years.

Johor Bahru, a small city strategically situated on the Singaporean border, has seen a significant concentration of investment, as noted by James Murphy, APAC managing director at data center intelligence provider DC Byte.

Like many other countries in Southeast Asia, Malaysia is making great use of the rising need for data centers to advance its national digital transformation strategy. Johor Bahru is the data center market in the region with the quickest rate of development, according to DC Byte’s 2024 Global Data Centre Index, highlighting the nation’s strong growth trajectory.

In Malaysia, there have been a ton of new data center projects launched in only the last year. According to recent announcements made by Prime Minister Anwar Ibrahim, the government has approved investments of RM114.7 billion (US$24.3 billion) in data centers and cloud services between 2021 and 2023. This increase in investment is evidence of Malaysia’s strategic location and attraction to major international tech companies.

Telekom Malaysia and Nxera Joint Venture

 An important step forward was the announcement of a joint venture to create data centers in Malaysia by Telekom Malaysia (TM) and Nxera, the regional data center division of Singtel’s Digital InfraCo business. The hyperscale AI-ready data center campus in Johor is the partnership’s first project. It will initially support 64MW of capacity, with ambitions to scale up to 200MW as demand rises. The building’s LEED certification indicates the facility’s dedication to energy- and sustainably-efficient operations.

The new data center would accommodate cloud hyperscalers and GPU-as-a-Service providers, among other customers, who demand considerable computing and AI capabilities. It uses cutting-edge technology, such as liquid cooling, to effectively handle workloads with a high power density. Situated in Iskandar Puteri, about 16 km away from Singapore, the campus would enjoy strong connectivity to meet demand from both Malaysia and Singapore because to its close proximity to TM and Digital InfraCo’s subsea cable links.

This project is Nxera’s initial attempt to enter the Malaysian market. Through this partnership, Nxera’s experience developing regional data centers will be combined with TM’s vast domestic network infrastructure and experience offering platform, data center, wholesale data, and connectivity solutions. Furthermore, the operating capabilities of the facility will be improved by utilizing both businesses’ subsea capability.  With a competitive advantage in the rapidly growing cloud computing and artificial intelligence industries, Malaysia is gradually establishing itself as a major participant in the global data center scene because to its proactive strategy and wise investments.

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