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Malaysia is betting on data centers to boost its economy

Johor in Malaysia is being transformed by the construction of giant data centers. The government hopes that the billions in investment as part of a global artificial intelligence boom will help it get rich by modernizing its economy.

Globally Malaysia ranks 14th in terms of operational capacity — still smaller than Frankfurt, London, Amsterdam, Paris and Dublin — but it is on track to be among the top 10 markets in five to seven years, according to Pritesh Swamy, who heads research on data centers in Asia for the real estate firm Cushman & Wakefield. Tropical Malaysia is warmer than the countries that were initially preferred by data centers, including Ireland, and would require more water and power for cooling, said Alex de Vries, the founder of Digiconomist, a research company studying the unintended consequences of digital trends. Francis Hutchinson, an analyst at Singapore’s ISEAS-Yusof Ishak Institute, said that Johor has faced recent disruptions and new stressors, like a growing population and water parks to boost tourism, could exacerbate the crisis.

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