JOHOR: Malaysia’s southernmost state is fast emerging as a data centre hotspot in Southeast Asia, with cheap energy and an abundance of water and land drawing operators to set up shop there. This rapid growth has been fuelled by the world’s growing reliance on cloud-based technology and artificial intelligence-related activities. Across southern Johor in Sedenak and Nusajaya, data centres, which are effectively warehouses with lines of servers that help to power AI and the internet in general, are sprouting up.  Huge pylons and giant water tanks line the roads leading to these technological parks. A 1 gigawatt-power station is also currently being built. This comes as the upcoming applied capacity for data centres is expected to hit 2 gigawatts in a few years.

More than a dozen data centre facilities are currently in operation in Johor. Singapore-based Princeton Digital Group is among the major data centre players that operate there. The first phase of its 130 megawatt-data centre in Asia was up and running within a year. The boom was driven by a surge in e-commerce and AI-related activities, said Princeton Digital Group’s managing director and chief technology officer Asher Ling.  Johor’s proximity to Singapore and the Malaysian government's business-friendly policies are also major draws, he told CNA.  “The support we received from the Malaysian authorities, both at the federal level and at the state level, was phenomenal,” said Mr Ling.  “This would never have been able to be achieved if folks were very bureaucratic.” The company has two 130 megawatt substations on standby, he noted. In the unlikely case that the entire Johor power grid goes down, there are generators lined up - with 48 hours of diesel fuel underneath - that will keep data centre operations running.  As data centres are relatively new in Johor, companies have found it tough securing a pipeline of experienced engineers. Initially, some engineers were brought in from Singapore to support the local staff. 

So far, Johor has received more than 50 applications from large cloud service providers, or hyperscalers. Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Tengku Abdul Aziz said these companies are interested in building their hubs in Johor and accessing the “computing power that is provided by the data centres and their GPUs (graphics processing units)”.  As Johor gears up to be a hub for data centres, observers said it is a fine balancing act to ensure sustainable growth. Meanwhile, locals are concerned about the impact on the environment with the heavy water and energy consumption.  Data centres account for about 1 to up to 5 per cent of global greenhouse gas emissions, according to different reports. They also use vast amounts of water for cooling and create noise pollution. Johorian Samuel Tan, CEO of real estate firm Olive Tree Property Consultantsbby.bet casino, said: “The authorities must ensure operators will not just come up with proposals, but with the implementation (of) green technology - friendly to the environment - and not causing harm or damage to the people.” The government is coming with the regulatory guidelines and framework to ensure data centres approved in Malaysia operate in an ethnical and sustainable manner.

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