Malaysia is emerging as a data center powerhouse amid booming demand from AI
A large hallway with supercomputers inside a server room data center.
Luza Studios | E+ | Getty Images
Malaysia is emerging as a data center powerhouse in Southeast Asia and the continent more broadly as demand surges for cloud computing and artificial intelligence.
Over the past few years, the country has attracted billions of dollars in data center investments, including from tech giants like Google, Nvidia and Microsoft.
Much of the investments have been in the small city of Johor Bahru, located on the border with Singapore, according to James Murphy, APAC managing director at data center intelligence company DC Byte.
“It looks like in the space of a couple of years, [Johor Bahru] alone will overtake Singapore to become the largest market in Southeast Asia from a base of essentially zero just two years ago,” he said.
Johor Bahru was named as the fastest growing market within Southeast Asia in DC Byte’s 2024 Global Data Centre Index.
The report said the city has 1.6 gigawatts of total data center supply, including projects under construction, committed to or in the early stages of planning. Data center capacity is typically measured by the amount of electricity it consumes.
If all planned capacity comes online across Asia, Malaysia will only be surpassed by the larger countries of Japan and India. Until then, Japan followed by Singapore currently lead the region in terms of live data center capacity.
The index did not provide a detailed breakdown of data center capacity in China.
Shifting demand
The vast majority of data center infrastructure and storage investments have traditionally gone to the established markets of Japan and Singapore, as well as Hong Kong.
However, the global pandemic expedited the world’s digital transformation and cloud adoption, leading to surges of demand for cloud providers in emerging markets like Malaysia and India, according to a report from global data center provider EdgeConneX.
“Increased demand for video streaming, data storage, and anything done over the internet or on a phone, essentially means that there’s going to be more need for data centers,” said Murphy.
Booming demand for AI services also requires specialized data centers to house the large amounts of data and computational power required to train and deploy AI models.
While many of these AI data centers will be built in established markets such as Japan, Murphy said emerging markets will also attract investments due to favorable characteristics.
AI data centers require a lot of space, energy and water for cooling. Therefore, emerging markets such as Malaysia — where energy and land are cheap — provide advantages over smaller city-states like Hong Kong and Singapore, where such resources are limited.
Spillover from Singapore
Thus, a lot of investment and planned capacity has been redirected from Singapore to the bordering Johor Bahru over the years.
Singapore recently changed its tune and laid out a roadmap to grow its data center capacity by 300 MW on the condition more projects meet green-friendly efficiency and renewable energy standards. Such efforts have attracted investments from companies like Microsoft and Google.
Still, Singapore is too small for wide-scale green power generation, thus there remain a lot of limitations on the market, said DC Byte’s Murphy.
Resource strains
While the boom in data centers has helped lift Malaysia’s economy, it’s also created concerns about energy and water requirements.
Kenanga Investment Bank Research estimates that potential electricity demand from data centers in Malaysia will hit a total maximum demand of 5 GW by 2035. The current installed electrical capacity for all of Malaysia is about 27 GW, according to Malaysian electricity company Tenaga Nasional Berhad.
Local officials are increasingly concerned about the extent of this power usage, as quoted in a recent report from The Straits Times.
Johor Bahru city council mayor Mohd Noorazam Osman reportedly said data center investments should not compromise local resource needs, given the city’s challenges with its water and power supply.
Meanwhile, a Johor Investment, Trade, and Consumer Affairs Committee official told ST that the state government would implement more guidelines on green energy use for data centers in June.
Chief executive officer of Google Sundar Pichai.
Marek Antoni Iwanczuk | Sopa Images | Lightrocket | Getty Images
Google on Friday made the latest a splash in the AI talent wars, announcing an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf.
As part of the deal, Google will also hire other senior Windsurf research and development employees. Google is not investing in Windsurf, but the search giant will take a nonexclusive license to certain Windsurf technology, according to a person familiar with the matter. Windsurf remains free to license its technology to others.
“We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” a Google spokesperson wrote in an email. “We’re excited to continue bringing the benefits of Gemini to software developers everywhere.”
The deal between Google and Windsurf comes after the AI coding startup had been in talks with OpenAI for a $3 billion acquisition deal, CNBC reported in April. OpenAI did not immediately respond to a request for comment.
The move ratchets up the talent war in AI particularly among prominent companies. Meta has made lucrative job offers to several employees at OpenAI in recent weeks. Most notably, the Facebook parent added Scale AI founder Alexandr Wang to lead its AI strategy as part of a $14.3 billion investment into his startup.
Douglas Chen, another Windsurf co-founder, will be among those joining Google in the deal, Jeff Wang, the startup’s new interim CEO and its head of business for the past two years, wrote in a post on X.
“Most of Windsurf’s world-class team will continue to build the Windsurf product with the goal of maximizing its impact in the enterprise,” Wang wrote.
Windsurf has become more popular this year as an option for so-called vibe coding, which is the process of using new age AI tools to write code. Developers and non-developers have embraced the concept, leading to more revenue for Windsurf and competitors, such as Cursor, which OpenAI also looked at buying. All the interest has led investors to assign higher valuations to the startups.
This isn’t the first time Google has hired select people out of a startup. It did the same with Character.AI last summer. Amazon and Microsoft have also absorbed AI talent in this fashion, with the Adept and Inflection deals, respectively.
Microsoft is pushing an agent mode in its Visual Studio Code editor for vibe coding. In April, Microsoft CEO Satya Nadella said AI is composing as much of 30% of his company’s code.
The Verge reported the Google-Windsurf deal earlier on Friday.
Technology
Nvidia’s Jensen Huang sells more than $36 million in stock, catches Warren Buffett in net worth
Jensen Huang, CEO of Nvidia, holds a motherboard as he speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, on June 11, 2025.
Gonzalo Fuentes | Reuters
Nvidia CEO Jensen Huang unloaded roughly $36.4 million worth of stock in the leading artificial intelligence chipmaker, according to a U.S. Securities and Exchange Commission filing.
The sale, which totals 225,000 shares, comes as part of Huang’s previously adopted plan in March to unload up to 6 million shares of Nvidia through the end of the year. He sold his first batch of stock from the agreement in June, equaling about $15 million.
Last year, the tech executive sold about $700 million worth of shares as part of a prearranged plan. Nvidia stock climbed about 1% Friday.
Huang’s net worth has skyrocketed as investors bet on Nvidia’s AI dominance and graphics processing units powering large language models.
The 62-year-old’s wealth has grown by more than a quarter, or about $29 billion, since the start of 2025 alone, based on Bloomberg’s Billionaires Index. His net worth last stood at $143 billion in the index, putting him neck-and-neck with Berkshire Hathaway‘s Warren Buffett at $144 billion.
Shortly after the market opened Friday, Fortune‘s analysis of net worth had Huang ahead of Buffett, with the Nvidia CEO at $143.7 billion and the Oracle of Omaha at $142.1 billion.
The company has also achieved its own notable milestones this year, as it prospers off the AI boom.
On Wednesday, the Santa Clara, California-based chipmaker became the first company to top a $4 trillion market capitalization, beating out both Microsoft and Apple. The chipmaker closed above that milestone Thursday as CNBC reported that the technology titan met with President Donald Trump.
Brooke Seawell, venture partner at New Enterprise Associates, sold about $24 million worth of Nvidia shares, according to an SEC filing. Seawell has been on the company’s board since 1997, according to the company.
Huang still holds more than 858 million shares of Nvidia, both directly and indirectly, in different partnerships and trusts.
WATCH: Nvidia hits $4 trillion in market cap milestone despite curbs on chip exports
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