Malaysia’s Data-centre Surge: The Magnet Pulling Malaysia Data Center Investment Into Southeast Asia

Malaysia’s current wave of data centre activity is being defined by new sites, new campuses, and larger power footprints. Developing Telecoms reports fresh announcements targeting Cyberjaya, a planned city outside Kuala Lumpur, and Banting in Selangor. This matters for Malaysia data center investment because these locations sit in the country’s core operating corridor, where colocation, cloud, and interconnection demand is rising alongside AI-focused buildouts. Light Reading also notes explosive growth in emerging Southeast Asian markets, including Malaysia, with funding often earmarked for AI-ready facilities, while 5G rollout and data sovereignty rules add demand for local infrastructure.

One of the clearest signals is the scale of hyperscale-capable projects. AIMS, owned by Digital Bridge, acquired ten acres of land in Malaysia to develop a data centre facility with 200MW of capacity, with approximately RM4 billion (US$1 billion) of investment and construction scheduled for completion in 2027. Developing Telecoms describes it as AIMS’ next flagship ecosystem and hyperscale facility in Cyberjaya, where it already operates a 50MW data centre that began construction in 2020. Separately, Telekom Malaysia (TM) said its Nxera data center in Johor, set to launch soon, will offer up to 200 MW of scalable power for AI and cloud workloads.

Land transactions underline how fast the pipeline is moving. IOI Properties Group sold 136 acres in an industrial park in Banting, Selangor, to Singapore’s Bridge Data Centres for a data centre campus. Developing Telecoms notes Selangor surrounds Kuala Lumpur and is known as a colocation and cloud hub, contrasted with Johor, where most of Malaysia’s hyperscale facilities are set to be built. This split supports different deployment models, from dense interconnection near the capital region to larger hyperscale builds in the southern corridor that benefits from proximity to Singapore.

Kuala Lumpur’s Colocation Growth Puts Numbers Behind the Surge

Forecasts for Kuala Lumpur provide a measurable frame for Malaysia data center investment momentum. RCR Wireless News, citing Structure Research, says the Kuala Lumpur data center colocation market is projected to be worth $300 million in 2025 and is expected to reach $1.1 billion by 2030, representing a five-year CAGR of 31%. The report ties growth to hyperscale cloud deployments, AI-driven workloads, and proximity to Singapore and Johor. It also names hyperscale providers expanding in Kuala Lumpur, including Alibaba Cloud, AWS, Microsoft, and Google, using a mix of colocation, built-to-suit, and self-build projects.

Alongside growth, constraints are becoming part of the story. Light Reading reports that by 2035, data centers are expected to require 19.5 GW of power generation capacity, accounting for 52% of Peninsular Malaysia’s electricity use, up from about 2% today. Developing Telecoms adds that, until recently, data centre power demand in Malaysia had been surging and “will triple by 2027 from 2022,” according to some estimates. Even so, Light Reading cites analysts at Kenanga Investment Bank saying they believe the boom will continue for at least the next two years despite higher electricity prices.

Malaysia is also shaping the enabling environment around this buildout. NEXTDC’s blog says the National AI Office (NAIO) was launched on 12 December 2024 to coordinate AI strategy, governance, and sector adoption, including a multi-year action plan. RCR Wireless News adds that in the first nine months of 2025, total Foreign Investments increased by 47.5% year over year, supporting the view that Malaysia is being positioned as a stable, well-connected base to serve Southeast Asia’s growing demand for cloud and AI services. These forces collectively help explain why new campuses keep coming.