Countries / Asia-Pacific and Middle East
Malaysia (Johor)
Malaysia has frozen new data centres that are not AI-related, and Johor has stopped approving basic-tier facilities, while AI-linked builds continue.
The Prime Minister told Parliament in February 2026 that new data centre applications not related to AI have been stopped for about two years because of power and water concerns, and that AI-related ones are easier to approve. Johor, the Singapore-border hub, said in November 2025 it would stop approving Tier 1 and Tier 2 data centres and had approved 51 projects worth RM182.96 billion. A national AI Governance Bill is in consultation, and a National AI Action Plan 2026-2030 was being prepared. For someone seeking compute, AI-oriented capacity in Johor is operating or being built; generic colocation is harder to start.
AI policy and activity
The National AI Office under the Ministry of Digital coordinates policy. The government's stated aim is an AI-driven nation by 2030 and ASEAN data centre hub status, projected by the Digital Minister to hold two-thirds of regional capacity by 2035. Budget 2026 allocated RM5.9 billion to the AI sector, according to the minister quoted in press.
Power and grid
Reported. The Prime Minister said supply is enough for the next one or two years, with future supply possibly from the ASEAN Power Grid or Sarawak hydro and solar. DC Byte, quoted by AFP, puts Malaysia at over half of data centre capacity under construction in five Southeast Asian countries. The Edge (2024) quotes the water regulator on extra Johor data centre water demand of about 26 million litres a day each year to 2036.
Data centres and compute
| Site | Where | Status | Notes and source |
|---|---|---|---|
| YTL Green Data Center Park and YTL AI Cloud YTL Power International with Nvidia | Kulai, Johor | Operating | Reported. EdgeProp (October 2025) says the first Nvidia-powered AI data centre at the 600MW park is complete and YTL AI Cloud is operational. (source) |
| Sedenak Tech Park West gigawatt campus YTL Power unit SIPP Power with JLand Group | Sedenak, Johor | Planned | Reported. EdgeProp and The Edge (19 to 20 August 2026): plan for a gigawatt campus on 145 acres with an option on up to 400 more; transaction details not disclosed. (source) |
Rules and programmes
| Instrument | Kind | Status | What it does |
|---|---|---|---|
| Restriction on new non-AI data centre approvals | Policy | In force | Reported. Prime Minister Anwar Ibrahim's reply in Parliament on 24 February 2026, as carried by AFP and Bernama; an AFP clip is also at https://www.tnb.com.my/assets/newsclip/25022026d3.pdf. No written rule or start date was read. |
| Johor halt on Tier 1 and Tier 2 data centre approvals | Planning | In force | Reported. Bloomberg report of a Johor state assembly answer (26 November 2025): lower tiers can use up to 50 million litres of water a day; all data centres to meet stricter efficiency standards. The formal state instrument was not read. |
| AI Governance Bill | Law | Consultation | Primary. Ministry of Digital release: first horizontal, risk-based AI law, not directly regulating AI output; engagement series, then a public consultation on the Unified Public Consultation portal expected to start 10 July 2026. We did not confirm that the consultation opened. |
| National AI Action Plan 2026-2030 | Policy | Proposed | Primary for the July 2025 consultation. Bernama (6 October 2025, https://www.bernama.com/en/news.php?id=2475414) reported it would be tabled in December 2025; we did not confirm it was adopted. |
Checked on 2 October 2026 and due for review by 1 January 2027. Many sources are trade press or law-firm summaries rather than official texts, and statuses such as reported or unconfirmed are shown as the source gives them. This is a summary, not legal advice. If something is wrong or out of date, tell us.