Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad said global tech companies must pay a premium to access electricity and water supplies for data centers in Malaysia in an interview with the Financial Times. The growing demand for data centers and artificial intelligence (AI) in Malaysia is putting pressure on existing resources.
Malaysia has attracted more than $16 billion in investment commitments from companies such as Amazon, Nvidia, Google, Microsoft, and ByteDance for data center development over the past two years. According to Nik Nazmi, the government has become more selective in accepting new data centers due to the pressure on the country’s energy and water resources.
Johor currently has 22 data centers with 8 more under construction. To support this energy demand, Johor will double its power generation to 2.7 gigawatts by 2027 to support up to 90 data centers in the future.
The announcement of the data center construction received negative reactions in Malaysia, especially from environmental groups after seeing the impact in the United States. In addition to high resource consumption, noise pollution from cooling systems is also an emerging issue.
Among the solutions taken by Amazon, and Google is investing in developing modular nuclear power stations. Microsoft is also starting to build data centers with cooling systems that use a closed cycle of recycled water.