Malaysia’s Data Centre Boom: Building For The Future, Or Just Hosting It?

Subscribe to our Telegram channel for the latest stories and updates.

Malaysia has become one of Southeast Asia’s most actively pursued locations for digital infrastructure in the past two years, attracting an estimated RM278 billion (USD59.4 billion) in digital investments between 2021 and 2024. About RM184.7 billion (USD39.4 billion) of this has gone into cloud infrastructure and data centre projects, making Malaysia one of the top locations in the world for hyperscale facilities and cloud computing services.

The charge is led by several American tech giants, such as Microsoft, which announced a RM10.2 billion (USD2.2 billion) investment to construct three data centres in Malaysia by the second quarter of 2025. Google is also investing RM9.3 billion (USD2 billion) to build its first data centre and cloud facility here, expected to generate 26,500 jobs and RM14.9 billion (USD3.2 billion) in economic activity by 2030.

All indicators suggest that Malaysia’s digital economy is expanding to unprecedented levels, but the more important question is whether Malaysia is actually reaping the benefits of this infrastructure—or if we are simply contributing land and electricity to someone else’s digital empire.

Beyond The Hype: What’s Actually Being Built?

Data centres serve as the internet’s invisible foundation. All AI queries, cloud documents, messages, and searches go through their servers. Attracting them may seem like a huge victory—and in some respects, it is. They express confidence among investors in Malaysia’s connectivity, energy supply, and political stability.

However, data centres by themselves are not major employers. Typically, a hyperscale facility may generate between 100 and 200 permanent positions, mostly in technical maintenance, security, and facility management. Instead, construction, electrical work, HVAC (Heating, Ventilation, and Air Conditioning) installation, and supply chain services account for the majority of job growth.

Microsoft projects that nearly 37,000 jobs will be supported by its investment, which is also expected to create RM49.4 billion (USD10.9 billion) in downstream value over a four-year period. The true economic concern, however, is whether we can retain this value in Malaysia—or if it will be diverted abroad in the form of deals, earnings, and data repatriation.

Digital Infrastructure Without Digital Sovereignty

We are constructing the digital economy’s hardware—but are we also building its ownership and capability? This is a silent worry as Malaysia positions itself as a digital hub.

Foreign corporations will profit from most of the data handled in these centres, which will service global clients and be subject to foreign regulations. Without meaningful stakes in the software, platforms, or intellectual property layered on top of that infrastructure, Malaysia risks becoming the industrial park of the digital world: essential, but easily replaceable.

The idea of digital sovereignty becomes crucial. We must have a national policy that guarantees:

The Environmental Cost Of Progress

There is also a quieter cost—energy and water. Data centres are notoriously resource-intensive. Globally, the industry is putting a strain on power systems, with each facility often using more than 100MW. Electricity rates in Malaysia are expected to increase by 14.2% in July 2025.

Some companies are already exploring solar and other sustainable alternatives, but it is crucial that the ecosystem as a whole follows suit to support a greener digital economy.

Ideas: Constructing More Than Just Server Rooms

Malaysia’s data centre boom will only be revolutionary if it is part of a broader, strategic digital industrial policy. Here’s how we can become a digital leader instead of just a data landlord:

Policymakers should certainly be optimistic about the billions flowing into Malaysia’s data centre industry. But the real questions remain: who owns the data? Who truly benefits from this expansion? And who is shaping the policies that will govern our digital future?

Malaysia is uniquely positioned to lead Southeast Asia’s digital revolution. But true leadership will require vision, value, and sovereignty—not just servers.

If we do not address these questions today, we may wake up in a decade to find we’ve built the highways to the cloud but left our people stranded on the ground.

Galvin Lee Kuan Sian serves as Lecturer & Programme Coordinator for the Diploma in Business programme at the School of Diploma & Professional Studies, Taylor’s College. With more than six years of experience in secondary and tertiary education, Galvin aspires to bring the best out of every student that comes under his guidance through robust teaching and learning pedagogy.