MALAYSIA’S data centre sector continues to show strong fundamentals and positive momentum, despite a recent report alleging Chinese engineers used local facilities to train artificial intelligence (AI) models with Nvidia-powered systems, according to MIDF Amanah Investment Bank Bhd.
In a note issued on Thursday, the investment bank maintained confidence in the sector’s outlook, suggesting that the chips reportedly used were likely older Nvidia models and not the state-of-the-art GB200 units. The bank added that it was awaiting further clarification from the Ministry of Investment, Trade and Industry, which has launched an investigation into the matter.
“As the allegations were said to happen in March 2025, we believe this could be a move to ‘speed up the process’ before the eventually rescinded Framework of AI Diffusion that was expected to come into force on May 15, 2025,” the bank noted.
The Wall Street Journal had reported that four engineers from Beijing flew to Malaysia in March, allegedly bringing with them 80 terabytes of data—including spreadsheets, images, and videos—to train an AI model.
Despite the controversy, MIDF Amanah observed no signs of a slowdown in the country’s data centre development.
“Contractors are still actively bidding for new data centre construction jobs,” the bank said, highlighting a series of recent transactions in the sector.
MIDF Amanah reaffirmed its positive outlook on Malaysia’s construction and utilities sectors, citing companies such as Gamuda, IJM Corp, and Sunway Construction as likely beneficiaries of continued demand for data infrastructure.
“We also like YTL Power International, which is developing the 500 megawatt (MW) Green Data Centre in Kulai through its partnership with Nvidia, and it is set to launch the first 20 MW AI data centre by August 2025, which will be fitted with the latest GB200 chips,” the report stated.
Additionally, utility giant Tenaga Nasional Bhd (TNB) is expected to benefit from rising energy demand driven by data centre growth.
“The utility giant has also recently inked an agreement under the Corporate Renewable Energy Supply Scheme (CRESS) with DayOne Data Centers to deliver up to 500MW of renewable energy over a 21-year term, which will be backed by new solar generation capacity,” MIDF Amanah added. - June 19, 2025
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