squirrly-seo domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/runcloud/webapps/ramaramamy/wp-includes/functions.php on line 6121Malaysia has become one of Southeast Asia’s most actively pursued locations for digital infrastructure in the past two years, attracting an estimated RM278 billion in digital investments between 2021 and 2024[1]. About RM184.7 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, where a US$2.2 billion investment was announced to construct three data centres in Malaysia by the second quarter of 2025[2], and Google, investing US$2 billion to build its first data centre and cloud facility here, which is expected to generate 26,500 jobs and US$3.2 billion in economic activity by 2030[3].
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 just 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 the investment, which will also create US$10.9 billion in downstream value over a four-year period2. The true economic concern, however, is that the ability to retain this value in Malaysia, and not 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 presents itself as a digital hub.
Foreign corporations will profit from the majority of the data handled in these centres, which will service clients worldwide and are subjected 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 at this point. We must have a national policy that guarantees:
The Environmental Cost of Progress
There’s also a quieter cost – energy and water. Data centres are notoriously resource-intensive. The industry is putting a burden on power systems throughout the world as each factory uses energy that frequently exceeds 100MW. Electricity rates in Malaysia are anticipated to increase by 14.2% in July 2025[4]. Some businesses are already looking into solar and other options, but it is crucial that the ecosystem as a whole follow suit, in order to pursue a sustainable economy.
Ideas: Constructing More Than Just Server Rooms
Only if it is a component of a larger, strategic digital industrial policy can Malaysia’s data centre boom be revolutionary. Here’s how we can become a digital leader instead of just being a data landlord:
While policymakers should be optimistic about the billions pouring into Malaysia’s data centre industry, it is also one that raises questions worth considering. Who is the data owner? Who truly benefits from this expansion? And who is shaping the policies that will govern our digital future?
Malaysia is in a unique position to take the lead in Southeast Asia’s digital revolution. However, including more vision, value, and sovereignty into our digital strategy will be the key to leadership, not adding more servers.
If we don’t explore these questions now, we might discover a decade from now that we’ve built the highways to the cloud, but left our people stuck on the ground.
[1] MIDA, 8 May 2025, MIDA Powers Up Malaysia’s Digital Future at Data Centre Nexus
[2] Microsoft, 20 March 2025, Microsoft’s upcoming cloud region to unlock new economic opportunities for Malaysia
[3] The Malaysian Reserve, 1 October 2024, Google’s Malaysia data centre sets new standard for power, water usage efficiency
[4] The Star, 27 December 2024, Base electricity tariff to rise 14.2% starting July
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 & learning pedagogy.
