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South-east Asia seeks data centre investments – but must reckon with their thirst

With rapid data centre growth straining the region’s water supply, the race is on for alternative water sources and cooling technologies.

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Sharanya Pillai

Sharanya Pillai

Published Fri, Jan 30, 2026 · 02:30 PM
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    • Across South-east Asia, many cities seek foreign investment in the form of data centres, but must therefore grapple with the facilities’ insatiable demand for water.
    • Across South-east Asia, many cities seek foreign investment in the form of data centres, but must therefore grapple with the facilities’ insatiable demand for water. IMAGE: YU KEXIN (WITH AI ASSISTANCE)

    [SINGAPORE] Soaring AI demand has brought hefty data centre investments to Johor – yet the Malaysian state’s local government recently narrowed this project pipeline.

    In November, it halted approvals for Tier 1 and 2 data centres, which have simpler infrastructure. The reason: water.

    Tier 1 and 2 data centres tend to have older and more water-intensive cooling mechanisms. One such facility might use as much as 50 million litres a day, according to a government official quoted in Malaysian news outlet The Star.

    Data centresESGWaterRenewable energy

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