Malaysia is aggressively expanding its data center capacity, positioning itself as Southeast Asia's fastest-growing market with planned investments exceeding $31 billion in the first 10 months of 2024, triple the amount from 2023.

The country's southern Johor province is set to host at least 1.6 gigawatts of data center capacity, up from nearly zero in 2019. Twenty-two mostly foreign data centers already occupy 21 hectares, with more under construction. The push comes as neighboring Singapore paused new data center construction in 2019 due to resource constraints.

Some experts are warning the expansion could strain Malaysia's power and water resources, with data center power demand potentially reaching 5 gigawatts by 2035 - more than half the country's current renewable capacity. The facilities, operated by companies including Microsoft, Equinix and China's GDS Holdings, primarily service East Asia, China and Europe rather than domestic users.

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