Petaling Jaya: Industry leaders are optimistic about opportunities and challenges to maintain the ambition of Malaysia, which become a regional center for artificial intelligence-powered solutions and data centers.
While ambition is extended by digital changes, government incentives and increasing demand for strategic foreign investments, they take care that it would be important for long -term success to address infrastructure, energy stability and competition.
As businesses turn to AI for rapid efficiency, data centers become the backbone of Malaysia’s growing digital economy.
Ciyak Ki Siak of Exabytes CEO said that the demand for AI-operated solutions and cloud services has increased, roughly due to businesses that acquire more efficiency in a rapid competitive environment.
“With the increase in hiring costs, companies are taking advantage of AI to streamline operations and reduce dependence on large workforce. Businesses are getting more ways to increase efficiency with less employees.
“With AI, we see improvement in various fields, from automation to data analytics, make operations more effective and scalable,” he said Sunbiz,
Furthermore, Chan said that Malaysia’s strategic location in Southeast Asia, in collaboration with its strong internet infrastructure, holds it as an attractive destination for data center investment.
“With global technical veterans like Microsoft, Google and AWS, expanding its footprint, the country is ready to become a prominent player in the digital economy of the region. Malaysia is geographically deployed well, free from major natural disasters, free of natural disasters, and a established data center is an ideal center for AI and Cloud services.”
Beyond the cost savings, AI is also promoting innovation.
Bank Malaysia Malaysia BHD Chief Economist Dr. Mohammad Afzanizam Abdul Rashid said that AI tools like Chatgpt have changed the work processes by increasing creativity, improving the idea generation and accelerating research.
“The AI revolution is changing how business, government and individuals work.
He said, “We are seeing a fundamental change, where technology allows us to achieve more with less resources. This progression underlines the need for expansion of the infrastructure of Malaysia’s data center to meet growing digital demands,” he said.
The University of Malaysia, Science and Technology Professor Emeritus Dr. Barjoyi Baradi said that Malaysia Digital Economy Bloprint and National Fourth Industrial Revolution Policy are accelerating development by offering incentives, grants and foreign investment opportunities to take government initiative.
However, he emphasized that Malaysia should be agile in adopting rapid technical changes.
“The pace of AI development is amazing. Just as the mainframe computers developed in the laptop in the 1960s today, we should guess how AI and data infrastructure will change in the next decade. To stay ahead, Malaysia needs a continuous investment in AI talent, research and sustainable infrastructure,” said Baroyiyi.
Despite the country’s development capacity, Malaysia faced several obstacles in maintaining its data center expansion.
Chan said that one of the biggest concerns is energy consumption. “If all AI-operated data centers in Malaysia were to come together online, states like Johor can struggle with lack of electricity. The demand for energy to cool these features is also an important challenge.”
Afzanizam said that push for permanent energy solutions is becoming important as more investors and corporate customers prioritize green and renewable energy sources.
“Data centers are highly energy-intensive, and Malaysia’s dependence on fossil fuels increases concerns about long-term stability. We should consider environmental impact. Energy and water security will become major issues as data centers require huge amounts of both.
“This is about creating the right balance between technological progress and stability,” he said.
Beyond the infrastructure, Afzanizam highlighted that the cost was facing stability and competition challenges.
“The data center business currently works on low margins due to high competition and price-sensitive customers. Complex regulatory requirements and competition from neighboring countries such as Singapore, Indonesia and Thailand puts more pressure,” he said.
Despite these challenges, Chan said that Malaysia’s data center market is rapidly on the development trajectory.
Analysts say the market will expand up to US $ 4.04 billion (RM18 billion) (2024 by 2030 by US $ 13.57 billion, which represents a mixed annual growth rate of 22.38%.
“New players, including Stack Infrastructure, Appoch Digital, Edgaconx, and Edgex Data Center (by DAMAC), are entering the Malaysian market, and making more intense competition.
“Microsoft is also receiving additional land in Johor to expand its data center operation,” Chan said.
Barjai echoed optimism, with the rise of edge computing to local, small -scale data centers. “By 2025, Malaysia is well deployed to strengthen its position as a regional data hub, not only meets domestic needs, but also to neighboring countries such as Indonesia, Thailand and Vietnam,” he said.
