[KUALA LUMPUR] Google has committed to invest US$2 billion for the first Google data centre and Google Cloud region in Malaysia, said the Ministry of Investment, Trade and Industry on Thursday (May 30).
Ruth Porat, chief financial officer of Google’s parent company Alphabet, said that the investment marks the tech giant’s largest planned investment in the South-east Asia region.
“This investment builds on our partnership with the Malaysian government to advance its ‘Cloud First Policy’, including best-in-class cybersecurity standards. This collaboration will also create a supportive ecosystem for innovation and unlock the potential of digital transformation,” she added.
Minister of Investment, Trade and Industry Tengku Zafrul Abdul Aziz said that the investment will support 26,500 jobs across various sectors in the country, including in healthcare, education and finance, with an estimated economic impact valued at RM15 billion (S$4.3 billion).
The data centre will be located at Elmina Business Park in Selangor. Upon completion, it will power Google’s popular digital services, such as search, maps and workspace, as well as deliver the benefits of artificial intelligence (AI) to users across the country.
“When operational, Malaysia will join the 11 countries where Google has built and currently operates data centres to serve users around the world,” he added.
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Big Tech, such as Amazon, Microsoft and Nvidia, have ramped up their investments in South-east Asia recently, to expand their data centre footprints to meet the rising needs of AI development.
Early this month, US-based Microsoft announced an investment of US$2.2 billion in Malaysia for the next four years, in addition to similar pledges for Thailand and Indonesia.
Tan Aik Keong, president of Malaysia Mobile App Developers Association, said that the investment from tech giants will bolster the country’s ecosystem, accelerate infrastructure development, and create a pull factor attracting global AI companies to offer services and solutions in the nation.
“Potential opportunities brought by these investments include cloud modernisation, data lake and data warehouse developments, as well as renewable energy developments,” said Tan, who is also the chief executive of digital solutions company Agmo.
A report by MSCI’s Asia Pacific Capital Trends showed that the acquisitions of Asia-Pacific data assets totalled more than US$1.6 billion in the first quarter of 2024, surpassing investment volumes recorded in both the first and second halves of 2023.
While Japan remains a prime destination for investors, lauded for its robust development pipeline, low borrowing costs and robust connectivity, Malaysia is rapidly emerging as a strong competitor in the data centre industry, riding on its strategic geographical advantage – proximity to Singapore, said MSCI.
