Google announced plans to invest US$15 billion in Malaysia over the next two years to build data centers and other infrastructure as demand for artificial intelligence (AI) services booms. Malaysia is Southeast Asia’s fastest-growing hub for new data centers, the warehouse-like buildings packed with servers that train and run AI tools such as chatbots and image generators.
“Malaysia is one of Southeast Asia’s most dynamic digital economies, driven by 99 percent internet penetration and rapid AI adoption across government agencies, businesses, and consumers,” the US company said in a statement. It said the investment would be made from 2027 to 2028, expanding on a $2 billion investment announced in 2024.
AI data centers use large amounts of electricity, putting pressure on grids that often still rely on fossil fuels, and in many cases water to cool their equipment. A backlash is growing worldwide over their environmental impact, along with concerns about noise, pollution, their appearance and how many jobs they actually create.
Google said its data center campuses in Malaysian industrial zones would be “energy-efficient”. It said it would work to “bolster local water security, and add more than one gigawatt of clean energy capacity” to the national grid. “Once operational, the facilities are projected to sustain more than 9,000 local jobs per year, with wages averaging 45 percent above the national median,” the company added.
Malaysia accounts for more than half of the data center capacity under construction in Southeast Asia, ahead of Indonesia, Thailand, the Philippines and Vietnam, according to market intelligence firm DC Byte. The International Monetary Fund (IMF) forecasts Malaysia’s economy will grow 5.2 percent in 2026, partly driven by data center activity.
However, data centers are forecast to account for one-third of Malaysia’s total energy consumption by 2035, the deputy prime minister told parliament in July. The government said then that it would only approve data center projects once it was sure there was enough energy and water capacity. In October, a Finnish authority ordered work to stop at two of Google’s data center sites in Finland until mandatory environmental impact assessments are completed.
