In recent months, Johor, the southernmost state of Malaysia, has emerged as a dynamic hotspot for data centre operations in Southeast Asia. Why are tech giants flocking to this region? The answer is simple: affordable energy, abundant water resources, and vast land are making Johor irresistibly appealing for data centre operators.

As the global demand for cloud-based services and artificial intelligence continues to skyrocket, Johor is reaping the rewards. The areas of Sedenak and Nusajaya have become bustling tech parks, with numerous data centres being constructed — essentially expansive warehouses filled with servers that power our digital lives.

Highly visible infrastructure developments, such as towering pylons and giant water tanks, now define the landscape as construction efforts ramp up. The establishment of a 1 gigawatt power station further signals Johor's commitment to slightly more than doubling its data centre capacity to 2 gigawatts in the coming years.

DATA CENTRE EXPLOSION

Currently, more than a dozen data centre facilities operate within Johor. Notably, Singapore-based Princeton Digital Group is a key player in this boom, having successfully launched the first phase of its groundbreaking 130-megawatt data centre within just one year.

According to Asher Ling, managing director and chief technology officer of Princeton Digital Group, the surge in e-commerce and AI-related activities has magnified Johor's appeal. "The proximity to Singapore and the Malaysian government's business-friendly policies make it an attractive option," he explained, praising the efficient support from local authorities that has facilitated such rapid development.

Princeton Digital Group has prepared for contingencies with two 130-megawatt substations ready to go. In a worst-case scenario where the entire Johor power grid fails, they are equipped with generators holding 48 hours’ worth of diesel fuel to maintain operations uninterrupted.

However, with the swift rise of data centres, there's a pressing need for qualified engineers. Initially, specialists were recruited from Singapore to help bolster the local workforce.

STRIKING A BALANCE FOR SUSTAINABLE GROWTH

Over 50 applications from major cloud service providers, also known as hyperscalers, have been received by Johor. Tengku Zafrul Tengku Abdul Aziz, Malaysia's Investment, Trade and Industry Minister, has highlighted that these firms seek to set up operations in Johor to leverage the computing power from the new data centres.

While Johor gears up to become the next data centre hub, ensuring that growth is sustainable remains a challenge. Environmental concerns are surfacing among locals regarding the resource-heavy operations of these facilities. Reports indicate that data centres contribute between 1% and 5% of global greenhouse gas emissions, leading to apprehensions about their heavy water consumption needed for cooling and potential noise pollution.

Samuel Tan, CEO of Olive Tree Property Consultants, has expressed the urgent need for operators to commit to green technology solutions. "Authorities must ensure that operators go beyond merely presenting proposals; they must implement environmentally friendly technologies to avoid harming local communities," he stated.

In response, the Malaysian government is developing comprehensive regulatory guidelines to ensure that data centres operate ethically and sustainably, balancing technological advancement with environmental stewardship. As Johor forges ahead in the data centre game, it will be fascinating to see if it can successfully navigate these challenges while meeting its ambitious growth objectives.

Stay tuned as Johor continues its standout journey to becoming a tech powerhouse in Southeast Asia!