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‘Non-aligned’ sanctuary Malaysia reels in Chinese data centres despite geopolitical risks
- Cheap land, low building costs among attractions for Chinese IT companies as Malaysia aims to move up value chain from manufacturing base
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Malaysia’s abundance of cheap land – especially in Johor – low building costs, tax breaks and proximity to Singapore are luring Chinese firms from ByteDance to GDS to set up data centres.
But experts warn any escalation in the US-China tech and trade war could derail its ambitions to become the leading Southeast Asian hub handling vast amounts of data and computing power generated by the push into artificial intelligence.
Malaysia has secured billions in funding from American tech titans Nvidia, Microsoft, and Amazon Web Services and is now looking east for fresh investments in the data centre market as part of its move up the value chain from a manufacturing base.
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TikTok’s parent company ByteDance has already set up a base in Malaysia and is looking to turn the country into a regional AI hub, flanked by a 1.5 billion ringgit (US$317 million) expansion of its existing data centre.
Chinese IT service and data centre operator GDS launched its first regional data centre last August in Johor.
Proximity to Singapore and readily available open, cheap land is Malaysia’s winning ticket, experts say, particularly its Johor state which borders the vastly more expensive city state where space is at a premium.
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