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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.

Sharanya Pillai
Published Fri, Jan 30, 2026 · 02:30 PM
    • 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.

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