MALAYSIA must match its ambition of becoming a regional artificial intelligence and data infrastructure hub with robust safeguards for its vital natural resources, Natural Resources and Environmental Sustainability Deputy Minister Syed Ibrahim Syed Noh has warned.
Addressing the physical toll of digital infrastructure—measured in rising consumption of land, water, and electricity—Syed Ibrahim stressed that technological advancement does not exempt the nation from its environmental and climate commitments.
He stated that the right balance is not about choosing between economic growth and environmental conservation, but about reducing the resource intensity of digital expansion.
The Deputy Minister noted that standards for energy and water consumption are already embedded within existing frameworks, such as the Ministry of Investment, Trade and Industry’s Guideline for Sustainable Development of Data Centre and the Ministry of Housing and Local Government’s 2024 Data Centre Planning Guidelines issued through PLANMalaysia.
He explained that project planning and execution are jointly coordinated by the Digital Ministry and Miti via the Data Centre Task Force to build a sustainable ecosystem that enhances local capabilities.
Through sustainable development guidelines, data-centre projects were encouraged to support local infrastructure and create opportunities for Malaysian suppliers in areas such as precision cooling, energy management and smart-city technologies, allowing more economic value generated by the sector to remain in Malaysia and be reinvested domestically.
Syed Ibrahim cautioned that environmental sustainability should serve as a long-term guardrail for economic growth, as infrastructure projects that compromise water security or grid reliability would ultimately become liabilities rather than economic assets.
Echoing these concerns, lawmaker Lee Chean Chung observed that public anxiety over data centres is understandable given their high fence lines and heavy resource footprints. He noted that their physical structures and stringent security measures could make them appear isolated from surrounding communities, resembling enclosed compounds or even prisons.
Lee urged operators setting up near populated urban areas like Petaling Jaya and Shah Alam to actively engage with local residents, noting that while current resource supplies remain adequate, long-term resource availability must be scrutinized if development continues unabated.
The lawmaker also questioned whether headline investment figures accurately reflect true domestic value, given that large-scale facilities yield relatively few direct jobs. He urged authorities to measure contributions through local content, workforce upskilling, and downstream economic activity.
He stated that decisions on further expansion should ultimately consider four key factors: economic returns, manpower and talent development, water availability and energy supply.
Lower utility tariffs and abundant land have made Malaysia—particularly Johor, due to its proximity to Singapore—an increasingly attractive destination for global operators. However, with global AI facilities requiring millions of litres of water daily and generating immense electricity demand, experts emphasize that stringent local oversight remains critical. - October 4, 2026
