Are we seeing the end of the Johor data centre story?

With so much happening in recent weeks, are we seeing the beginning of the end of the Johor data centre story? I think it's the wrong way to frame it.

This UnfilteredFriday, let's talk about Johor and the regional data centre market. Is the region's data centre growth imperilled by recent developments?

The story so far

There's been a series of alarmist reports alluding to Johor's potential demise. However, the situation is more nuanced than the dire assessments might suggest.

Let's review some of the recent reports:

• Increase in electricity pricing in Malaysia.
• Rumours of targeted GPU restrictions.
• Ongoing tariff negotiations with the U.S.

Already, I'm hearing whispers of less well-funded data centre operators looking to bail. Is the meteoric rise of the Johor data centre market about to plummet?

Critical mass achieved

I personally feel that Johor’s data centre market has become too big, too strategic, and too visible to fade into oblivion even if the most pessimistic predictions happen.

And it's worth pointing out that:

• It's unlikely that AI workloads make up a majority.
• We cannot assume non-US GPUs never catch up.
• GPU restrictions might never happen.

To be clear, I still think Johor's long-term trajectory will ultimately be determined by whether it can diversify beyond hyperscalers and AI workloads.

Focus on fundamentals

What determines the importance of a market anyway? Data centre capacity is a vital gauge, but it's ultimately only a single metric of an extremely complex topic.

At W.Media's SIJORI Week over the last few days, I was gratified to hear from scores of data centre professionals working tirelessly to promote and improve the ecosystem.

They are:

• Seeking to engage authorities in Malaysia.
• Building better connectivity across SIJORI.
• Beefing up the infrastructure in Batam.
• Improving data centre sustainability.

Let's just say that some have risen through the ranks through the years I've known them, and are now in a position to influence or even shape policies.

But it's not just an oldster's game. There are many who joined the industry more recently. From engineers, consultants, to analysts, they are brimming with brand new ideas - and energy.

Yes, it's true that the U.S. tendency to play GPU whack-a-mole can debilitate or distort the region's data centre markets.

But instead of jumping at each rumour or social media post, it makes far more sense to focus on the fundamentals and plan for the long term.