Google unveils $15 billion data centre investment in Malaysia

Google announced plans on Wednesday to invest $15 billion in Malaysia over the next two years to build data centres and other infrastructure as demand booms for artificial intelligence services.

The country is Southeast Asia's fastest growing hub for new data centres -- warehouse-like buildings crammed with servers that can train and run AI tools such as chatbots and image generators.

"Malaysia is one of Southeast Asia's most dynamic digital economies, driven by 99 percent internet penetration and rapid AI adoption across government agencies, businesses, and consumers," the US tech giant said in a statement.


It said the $15 billion investment will be made "over the next two years (2027 to 2028)", expanding on a $2 billion investment announced in 2024.

AI data centres require large amounts of electricity -- placing increased pressure on grids often still reliant on fossil fuels -- and, in many cases, water to cool down hot computing equipment.

A backlash is growing worldwide against their environmental impact, and there are also concerns over noise, pollution, their appearance and how many jobs the facilities actually create.

Google pledged Wednesday that its data centre campuses in Malaysian industrial zones would be "energy-efficient".

The company said it would work to "bolster local water security, and add more than one gigawatt of clean energy capacity" to the national grid.

"Once operational, the facilities are projected to sustain more than 9,000 local jobs per year, with wages averaging 45 percent above the national median," it added.

Malaysia accounts for more than half of under-construction data centre capacity among Southeast Asian countries, including Indonesia, Thailand, the Philippines and Vietnam, according to market intelligence firm DC Byte.

The International Monetary Fund forecasts that Malaysia's economy will grow by 5.2 percent in 2026, partly encouraged by data centre activity.

But by 2035, data centres are forecast to swallow up one-third of Malaysia's total energy consumption, the deputy prime minister told parliament in July.

The government said at that time it would only approve data centre projects after ensuring sufficient energy and water supply capacity.

In October, a Finnish authority ordered work on two of Google's data centre sites in the country halted until mandatory environmental impact assessments have been completed.