Malaysia looking to work with data centre players to build regulatory frameworks

MALAYSIA’S government is looking to work with data centre players to build regulatory frameworks as it looks to develop the industry, which is fast-growing in Johor.

At data centre operator GDS International’s Data Centre Supply Chain Ecosystem Summit held in Johor on Sunday (Oct 27), Malaysia Deputy Minister of Investment, Trade and Industry Liew Chin Tong said it was time for data centre players to form a trade association.

He said that while the industry was not new, the amount of power and data needed to take advantage of generative artificial intelligence (AI) technologies was new.

“We are now actually building the regulatory ship while we are sailing it,” he said, adding that the industry is progressing at a rapid pace in Johor.

Liew added that with a strong industry association, players would be able to prevent speculative builds, regulate and develop the industry together.

Similarly, Malaysia Minister of Digital Gobind Singh Deo said he welcomed the idea of a trade association, although he was also open to other mechanisms of engagement that the data centre industry may wish to adopt.

“I think the key is to ensure that there’s this avenue by which you can communicate with the government, and of course, to reflect the interest of the community as a whole,” he said.

In response to The Business Times’ queries, Asia-Pacific Data Centre Association chair Jeremy Deutsch said that Malaysia is an important market for data centres, including many of its member companies.

“If a data centre association is established in Malaysia, we would welcome collaboration to support a thriving digital ecosystem in the country and region,” he said.

Founded in January this year, the association’s founding members include players such as Equinix and Princeton Digital Group (PDG), which have built up their presence in Johor.

For instance, PDG delivered 52 megawatts of data centre capacity at Johor’s Sedenak Tech Park in July this year. The buildout represents phase one of its JH1 campus, which will eventually host about 150 MW of data centre capacity.

At the summit, Johor Menteri Besar Onn Hafiz Ghazi said he hoped that the state can position itself as a premier AI data centre hub that brings in high value, high-tech investments, and better-paying jobs for Johor residents.

“Equally important is our commitment to green data centres, which minimise water usage, electricity and carbon emission, addressing the pressing environmental concerns that have long been the Achilles heel of the data centres industry,” he said.

On Sunday, GDS International pledged up to one billion ringgit (S$303.6 million) in investments towards integrated factories and service centres that form the company’s supply chain.

The company expects this to generate more than five billion ringgit in annual output and create up to 5,000 local jobs.