Malaysia’s data centre sector remains resilient and on track despite recent concerns involving Nvidia chips and alleged use by Chinese firms to train artificial intelligence (AI) models within the country, according to MIDF Research.
The investment research house clarified that the chips in question are likely to be older-generation Nvidia models, and not the latest GB200 AI chips, which are subject to export restrictions imposed by the United States government. As such, there appears to be no material disruption to ongoing or upcoming data centre projects across the country.
“There is no indication of slowdown or deferment in data centre developments,” MIDF said, adding that construction firms continue to actively tender for new data centre infrastructure jobs.
Among the major developments is Gamuda Bhd’s disposal of 389 acres in Port Dickson to Pearl Computing, a company linked to Google, alongside securing a RM1.01 billion contract for data centre-related works. Separately, Sunway Construction Group Bhd has landed a RM1.16 billion contract from a US-based technology giant.
In a further display of continued investment confidence, Microsoft has reaffirmed its RM10.5 billion commitment towards cloud and AI infrastructure, including hyperscale data centres in the Klang Valley.
While many Malaysian data centres are designed to be AI-capable, not all are purpose-built solely for AI functions. For instance, YTL Power International Bhd has allocated only 100MW for AI operations at its 500MW facility in Kulai, Johor.
Meanwhile, the Ministry of Investment, Trade and Industry (Miti) is currently investigating claims stemming from a Wall Street Journal report, which alleged that a Chinese technology firm has been leveraging Malaysian data centres to circumvent US chip restrictions.
According to Miti, the servers in question are not classified as controlled items under the Strategic Trade Act 2010. It stated that Malaysian data centres are free to operate commercially provided they comply with local regulations.
Nonetheless, the ministry stressed that Malaysia will take firm action against any party attempting to violate export controls or engage in illicit trading practices. It reaffirmed the country’s adherence to international trade regulations, particularly those relevant to semiconductors and AI technologies.
Miti reiterated Malaysia’s neutral stance amid global geopolitical tensions, including those between the US and China, and urged companies operating within its borders to observe all applicable export controls to avoid secondary sanctions.
The government’s ambition to position Malaysia as a regional leader in artificial intelligence continues, despite mounting international scrutiny. Prime Minister Anwar Ibrahim has previously affirmed Malaysia’s commitment to becoming a leading AI hub in Southeast Asia.
Given the high computational demands of AI, including machine learning and real-time data analytics, data centres remain the core infrastructure necessary to fully realise this ambition. According to the Malaysian Investment Development Authority, the national data centre market is expected to grow from US$4.04 billion (RM17.2 billion) in 2024 to US$13.57 billion (RM57.8 billion) by 2030.
-FMT
