The rapid deployment of data centers for artificial intelligence needs in Malaysia is beginning to raise serious concerns among experts. According to my analysis of macroeconomic trends in the ASEAN+3 region, this industry is already placing critical strain on the country's infrastructure—from electricity supply to water resources and the labor market.
The situation is particularly alarming in the state of Johor, which hosts about 80% of all active data centers in Malaysia. This makes the region extremely vulnerable to disruptions in energy supply and water usage. For comparison: a single 100 MW data center consumes approximately 4.2 million liters of water daily—a volume comparable to the needs of a small town.
Forecasts indicate that by 2029, the total capacity of data centers in Malaysia could reach 3–4 GW. This means the country risks facing chronic shortages of electricity and water resources if preventive measures are not taken.
Expert Assessment
The situation in Malaysia is a vivid example of how the global AI infrastructure boom collides with local resource constraints. I believe that without the adoption of energy-efficient technologies and a revision of data center placement policies, the country may lose its appeal to international investors. This also underscores the need to diversify regions to distribute the load—otherwise, Malaysia risks becoming a victim of its own success in attracting AI projects.