Malaysia plans to limit the development of data centers that are not related to artificial intelligence. This decision is caused by the growing strain on the country’s power grid. It was announced by Malaysia’s Prime Minister Anwar Ibrahim in an interview with the state-run news agency Bernama.
He referred to government fears that the rapid growth of data centers could lead to higher electricity tariffs or blackouts for ordinary consumers. This is why the authorities intend to take measures to protect households and maintain power grid stability.
In the long term, Malaysia hopes to increase power supplies from the island state of Sarawak to the mainland. In addition, greater use of the ASEAN Power Grid, a project designed to connect the power grids of Southeast Asian countries by 2045, is being considered. As of today, this regional power grid connects Vietnam, Peninsular Malaysia and Singapore.
Malaysia remains one of Asia’s fastest-growing data center markets. According to White & Case, the state of Johor is now the largest hub for data center construction in Southeast Asia; by 2030, it could account for about 60% of Malaysia’s data center capacity.
The growing investor interest in Malaysia is largely due to Singapore’s moratorium on the construction of new data centers that was in place from 2019 to 2022. During that period, many companies moved their projects to the neighboring country. Singapore has now lifted the ban, but it continues to be very cautious in issuing permits for new data centers. Meanwhile, Malaysia attracts investors thanks to its large land plots, lower construction costs and comparatively affordable electricity.
