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# Malaysia is not slamming the door on data centres
- URL: https://www.techstories.co/malaysia-is-not-slamming-the-door-on-data-centres/
- Published: 2026-08-25T11:53:14.000Z
- Updated: 2026-08-30T01:50:10.000Z
- Description: What I told the SCMP about Johor's regulatory tightening.
- Author: Paul Mah
- Tags: Data Centres, Sustainability

As the backlash against data centres gains steam, it is tempting to view everything under the same lens. That includes Johor, which has seen a once-in-a-generation surge of new data centres.

Nicholas Spiro reached out for my views, and I explained how the situation in Malaysia is fundamentally different from the abrupt moratoriums we are seeing in NYC and elsewhere. I looked back at my notes, and here's what I shared.

![](https://www.techstories.co/content/images/2026/08/1787658791754.jpg)

****Screenshot**

### Malaysia moved first

The Malaysian government was closely reviewing the rapid growth of data centres as far back as 12 to 24 months ago. It was studying water usage, setting up the Data Centre Task Force (DCTF), and changing how electricity tariffs are structured.

As I told Nicholas: "Long before anyone got unhappy with data centres, \[Malaysia\] was already taking that into consideration."

### Moderation, not moratorium

I argued that Malaysia isn't closing the door on data centres. It is, however, moderating approvals to preserve finite resources.

The issue is a mismatch between the speed of data centre construction, which can be as short as eight to 12 months, and the far lengthier lead times for supporting infrastructure. Power substations and water treatment plants, for example, are often planned years or even a decade ahead.

In that vein, the DCTF equalises the approval process nationally, which means developers can't shop around for easier pathways, as some operators did in the beginning.

### Demand isn't going anywhere

But perhaps the greatest reason why we will keep building data centres is this: the region genuinely needs them, because of a pre-existing shortage of digital infrastructure.

Moreover, "usable AI" is changing the picture. AI coding tools can now create reliable enterprise apps, and neoclouds have seen token consumption surge. Ultimately, this opens the door to AI inferencing for the huge population of Southeast Asia.

### The bottom line

Malaysia's regulatory tightening is proactive governance, not reactive backlash. The government is moving ahead of the curve to ensure that finite resources such as electricity and water are allocated judiciously.

This stands in contrast to certain parts of the world, where unchecked, profit-driven building has triggered grassroots revolts that are now percolating across the globe.

Still, sentiment is contagious, and the real economics of data centres are often less flattering than the headline figures suggest. For operators, that probably means they need to be far more proactive than they are today. I'll write more on this another day.

Thank you, Nicholas, for eschewing sensationalism for a balanced report of Malaysia's data centre boom. You can read his full report in the South China Morning Post [here](https://www.scmp.com/opinion/asia-opinion/article/3365008/malaysias-data-centre-rules-aim-green-sector-not-slam-door?ref=techstories.co).