MALAYSIAN Investment Development Authority (MIDA) chairman Tengku Zafrul Abdul Aziz has dismissed the notion that data centre investments are limited in value due to relatively lower job creation, arguing that their true economic contribution lies in broader ecosystem development, particularly in artificial intelligence (AI) and digital infrastructure.
Speaking at a panel discussion during the Energy Transition Conference 2026 (ETCon26) at the Kuala Lumpur Convention Centre today, he said critics who compare data centres unfavourably with traditional manufacturing on employment numbers overlook the wider spillover effects such investments generate.
“This spillover effect is more indirect. It comes from building and introducing the right ecosystem, especially when it comes to artificial intelligence (AI),” he said.
He likened the economic impact of such infrastructure to major national transport projects, noting that their value cannot be measured purely through direct employment figures.
“It’s like building a highway. When you’re building the North-South Expressway, you can’t measure its value just by the number of toll collectors at the toll booths,” he said.
Tengku Zafrul stressed that MIDA’s focus is on ensuring that AI-linked and data centre investments deliver meaningful benefits to the broader economy through structured spillover effects and ecosystem development.
He said Malaysia is adopting a more selective approach to approving such investments, particularly with regard to sustainability and energy efficiency requirements.
“We recognise the need for greater selectivity in investments such as data centres. Energy efficiency is of paramount importance, so we have developed various approaches and conditions,” he said.
He added that operators of data centres should not only adopt green and sustainable energy practices but also play a role in strengthening Malaysia’s wider AI and digital infrastructure ecosystem.
“The entire supply chain behind AI infrastructure must follow. They should drive that,” he said.
On local participation, he said the government is encouraging greater involvement of Malaysian companies in data centre development projects, with a target of up to 40 per cent local participation.
“We are encouraging local participation and have set a target of up to 40% local participation,” he said.
Tengku Zafrul also said nuclear energy should remain part of Malaysia’s long-term energy considerations as the country pursues its net-zero emissions target and prepares for rising electricity demand driven by digital growth.
“If you look at our neighbours, Singapore, Vietnam, Thailand, Indonesia, they are all on the same path, namely that nuclear energy is one of the energy sources needed to achieve the net zero target,” he said.
“For me, the sooner the better,” he added.
His remarks come amid increasing regional competition for data centre investments, as Southeast Asian economies race to position themselves as hubs for AI infrastructure, digital services and high-performance computing. - June 4, 2026
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