• Data centre growth is fueling jobs, cloud services, and AI expansion in Malaysia.
• Malaysia’s data centres is powering its tech economy.

Data centres are a core part of how countries manage and protect information today. Without local infrastructure, governments and businesses must rely on services from abroad – raising concerns around data privacy, performance, and national control. For countries like Malaysia, building out a strong data centre industry supports domestic needs and opens the way to becoming a regional hub for digital exports, including AI model training and cloud services.

A new report [PDF] from the Asia Pacific Data Centre Association (APDCA), prepared by KPMG, lays out how important the sector has become for Malaysia. The study found that in 2024 alone, data centres contributed around USD 1.4 billion to the national economy and supported more than 4,400 jobs. By 2030, those numbers are expected to grow significantly – reaching roughly USD 34 billion in output and supporting over 30,000 jobs.

A key piece of digital infrastructure

Data centres are essential for running everything from AI and fintech to e-commerce and public services. They help businesses run smoothly, make government operations more efficient, and give Malaysia a competitive edge in the global digital economy. Reliable infrastructure is no longer just a nice-to-have – it’s central to long-term growth and sovereignty.

Malaysia’s push to lead in digital services depends heavily on data centres. Beyond the construction and maintenance work involved, they unlock broader productivity gains in multiple industries – from cloud computing to artificial intelligence. The makes them a crucial part of Malaysia’s strategy to grow its knowledge economy and reduce brain drain.

The sector creates high-skilled jobs in areas like cloud infrastructure, network security, and data engineering. The are roles that help retain local talent and attract tech-focused foreign investment. According to LinkedIn data, over 357,000 professionals in Malaysia already work in digital-related roles – a sign that the workforce is well-positioned to support continued growth in this space.

Johor takes the lead

Much of Malaysia’s data centre capacity is concentrated in Johor, which in 2024 accounted for nearly 80% of the country’s total. The region has become a top destination for hyperscale and enterprise data centres, with a very low vacancy rate and strong interest from global tech players.

Johor’s location in the Johor-Singapore Special Economic Zone (JS-SEZ) gives it a strategic edge. Combined with solid infrastructure and available land, it’s become a natural choice for developers. As demand grows, new investments are also flowing into other parts of the country, like Selangor and the Klang Valley, helping to distribute benefits more widely.

Malaysia’s capacity is expected to rise from around 505MW in 2024 to roughly 3,600MW by 2030. That growth is being driven by demand for colocation, edge computing, and large-scale cloud operations.

Supporting broader economic goals

The impact of data centres goes well beyond the facilities themselves. They support jobs in construction, electrical work, HVAC systems, and more. They also create demand for digital services – everything from software engineering to customer support – that extend in industries.

The data centres serve as the foundation for high-growth sectors like AI, advanced manufacturing, and smart logistics. They enable better public services, rural internet access, and digital tools in education and healthcare. All of this contributes to better living standards and a more connected society.

The government sees this potential and has backed the sector through major infrastructure plans, including the Malaysia Digital Economy Blueprint and the Twelfth Malaysia Plan. A number of regulatory and incentive programs have also helped draw in investment, including tax breaks and energy supply improvements.

A fast-growing, competitive market

Malaysia is one of the fastest-growing data centre markets in Asia Pacific. Between 2025 and 2030, total data centre capacity is projected to double from 1.26GW to 2.53GW. At the same time, colocation revenue is expected to jump from $710 million to $1.87 billion. That growth is being driven by demand from hyperscale cloud providers and enterprise customers looking for reliable, cost-effective infrastructure in the region.

Compared to mature but capacity-limited markets like Singapore, Malaysia offers available land, lower costs, and growing government support. These factors make it a strong option for global providers looking to expand in Southeast Asia.

Supporting AI growth

The rise of AI has pushed global demand for data centre services even higher. Since the launch of tools like ChatGPT, companies have been racing to build infrastructure capable of training and deploying large models.

Malaysia is seen as well-positioned to meet this demand. The government has established the National AI Office (NAIO) to guide AI development and has set targets for inclusive AI growth and talent development. AI is expected to contribute around $115 billion to Malaysia’s economy between 2025 and 2030.

Local infrastructure is a big part of that. Owning and operating AI-ready data centres gives Malaysia more control over how data is handled, offers national security benefits, and strengthens its position in areas like renewable energy and sustainable facility design.

A broader supply chain opportunity

The growth of data centres also creates export potential for related industries. Malaysia could become a provider of AI and cloud services to nearby countries in ASEAN. It could also export technologies like cooling systems, develop expertise in managing electronic waste, and grow local capabilities in building GPU infrastructure.

This kind of industrial diversification supports long-term job creation and helps Malaysia build a more complex, tech-focused economy.

The policy environment matters

The government has already approved over $24 billion in data centre projects, most of it coming from foreign investors. To keep that momentum going, clear and consistent policy will be important.

Initiatives like the Green Lane Pathway – developed by Tenaga Nasional Berhad (TNB) – have helped speed up infrastructure setup. It now takes around 12 months to get power access, compared to the usual 36 – 48 months.

Other frameworks, like the Corporate Renewable Energy Support Scheme (CRESS), help providers tap into clean energy. At the same time, the new Planning Guidelines for Data Centres and upcoming rules around energy and water use show that Malaysia is also trying to manage sustainability more seriously.

Still, some areas need improvement. Unclear tax and energy tariff changes could reduce Malaysia’s appeal compared to other countries. Engaging with data centre operators and offering better regulatory certainty could help address this.

Building the workforce

Malaysia has made strong progress in growing its digital talent pool, but there’s still a gap when compared to other mature markets like Singapore, South Korea, and Japan. Lower attrition rates in Thailand and Vietnam also point to the need for better talent retention strategies.

Closer partnerships between government, industry, and education providers could help bridge these gaps and ensure that Malaysia remains competitive.

A strong outlook

Malaysia’s data centre market is set to expand quickly and play a key role in supporting national digital goals. The combination of strong government support, demand from global providers, and available resources gives the country a clear opportunity to become a major player in Southeast Asia’s digital infrastructure story.

As Jeremy Deutsch, Chair of the APDCA, put it: “Data centres are the foundational infrastructure that powers and enables AI, cloud adoption, and digital transformation in sectors. The report provides compelling evidence of the sector’s tangible benefits and broad-based impact on the Malaysian economy, rakyat, and nation.”