Digital investments exceed target
According to Malaysian Investment Development Authority (MIDA) chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, these investments have generated over 92,000 jobs, particularly in high-demand fields such as cloud engineering, artificial intelligence (AI) and cybersecurity.
The influx of capital was facilitated through the Digital Investment Office (DIO), a strategic collaboration between MIDA and the Malaysia Digital Economy Corporation (MDEC).
Speaking at the Bursa Malaysia-Hong Leong Investment Bank Bhd (HLIB) Stratum Focus Series titled "Data Centre 2.0: The Ecosystem and What's Next for Malaysia?', Sikh Shamsul said Malaysia is now leading a new wave of next-generation digital infrastructure development.
The sector is evolving beyond traditional co-location services toward generative AI, quantum computing, and large-scale automation.
The shift to Data Centre 2.0 reflects Malaysia's growing maturity in digital infrastructure, he said.
"Recent global shifts, such as the United States (US) Department of Commerce's recalibration on AI division rules, signal a deeper understanding that digital leadership cannot be siloed or reactive. It must be strategic, collaborative and bold.
"For Malaysia, this is a call to action. We must continue to lead with agility, vision and policy for data centre development," he said.
In the first quarter of 2025, Malaysia approved RM89.8 billion in digital investments, marking a 3.7 per cent year-on-year increase. Of that, RM35.1 billion was directed into the information and communication technology sub-sector, underscoring continued investor confidence in the local digital economy.
Menawhile, HLIB chief executive officer Lee Jim Leng said Malaysia must reinforce its position as a neutral, stable, and indispensable hub for data and AI development to remain competitive in the rapidly evolving digital economy.
Lee said this goal demands bold, future-ready policies that not only catalyse homegrown AI innovation and uphold data sovereignty but also accelerate the development of energy-efficient, sustainable data centre infrastructure, critical components of any advanced digital ecosystem.
He added that deeper collaboration between the government, industry players and academia will be crucial to ensuring Malaysia builds long-term competitiveness in high-performance digital infrastructure.
"Malaysia is entering the era of Data Centre 2.0, a phase where the focus moves beyond basic co-location services to advanced, high-performance computing infrastructure that supports AI workloads, green innovation, and data sovereignty.
"With RM6.7 billion in approved investments and another RM3.9 billion currently in advanced hyperscale discussions, Malaysia is no longer a peripheral player in the region.
"Malaysia should now be positioning itself as a key digital infrastructure hub," she added.
Lee noted that the global AI revolution is transforming every industry, and data centres are the backbone of this new digital era.
However, she cautioned that this transformation is unfolding amid growing geopolitical tensions, particularly the recent US restrictions on exports of advanced AI chips, which have sent shockwaves through the global technology supply chain.
"While Malaysia is not a direct target of these restrictions, we remain a vital node in an interconnected global economy. Any disruption to the supply of high-performance chips from giants like NVIDIA and AMD will directly affect the cloud providers, hyperscalers, and enterprises that are powering our digital future," she said.
Despite these global challenges, Lee believes Malaysia has a real opportunity to solidify its position.
She said this shift is backed by data reflecting rising investor confidence and market interest.
She pointed out that MIDA had approved RM6.7 billion in data centre investments.
While that figure is impressive, she said the additional RM3.9 billion currently under advanced discussion signals the massive opportunities still ahead.
"This domestic boom is also further validated by our growing presence on the regional stage. According to global real estate services firm Jones Lang LaSalle (JLL), Malaysia now attracts 38 per cent of all new data centre investments across the Asean region.
"Even more notably, JLL projects that our market share could surpass 40 per cent by next year. This isn't just growth. It marks a consolidation of our role as the destination of choice for digital infrastructure investment.
"The momentum is clear, with RM2 billion worth of data centre construction contracts already awarded this year, proving that these multi-billion-ringgit commitments are moving quickly from blueprints to physical infrastructure," she said.
Lee said global tech giants such as Google, Microsoft, and AWS are not only investing in Malaysia; they are doubling down, recognising the country's immense potential as a regional data powerhouse.
She noted that demand for data centres continues to rise, fuelled by the rapid expansion of AI and cloud computing.
Overall, Lee said the transition to Data Centre 2.0 presents both a challenge and an opportunity, but with the right strategies, Malaysia can turn global uncertainty into a national advantage and cement its leadership as Asean's digital infrastructure hub.
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