MACQUARIE Research said that the data centre boom in Malaysia will continue but it’s unlikely to keep pace with surging demand.
It said that Thailand, meanwhile, will start to reap the benefits of the surging demand from data centres, a play on the artificial intelligence trend.
“We believe Thailand’s data centre rush is just beginning,” said Macquarie in a report sent on Tuesday.
Led by head of Asian sustainability research Charles Yonts, Macquarie analysts said in a report that Thailand would be a stand-out, as it has ample power. New investments from Amazon and Google in the country’s Eastern Economic Corridor would also fuel the rapidly-growing demand for digital services.
In particular, the analysts said Thailand will benefit from the shift to the so-called “site to power” model, where electricity-guzzling data centres are built where they can access power, rather than trying to get power to preferred sites.
“As the ‘site to power’ model becomes increasingly dominant, data-centre operators and investors will need to prioritise markets with robust power infrastructure to stay ahead in this competitive landscape,” they said in the Nov 29 report, noting Thailand’s advantageous power conditions and supportive regulations.
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To meet the demand for infrastructure and computing power to enable artificial intelligence (AI), global tech players are stepping up the building of data centres. These are large facilities that accommodate servers, data storage systems and networking equipment that support better internet services and telecommunications.
The AI craze is fueling demand for bigger data centres. The World Economic Forum estimates that generative AI systems might already use around 33 times more energy to complete a task, compared to task-specific software.
South-east Asia is benefiting from the rush, in particular Malaysia, after Singapore halted the building of data centres between 2019 and 2022. Multi-billion dollar investments such as those by Google to build data centres are expected to double Malaysia’s current capacity to around one gigawatt (GW) over the next two years. Data centre capacity is measured by the amount of electricity consumed, as defined by watts.
But there are signs that Malaysia may be straining under the power requirements of such investments. In November, the southern Malaysian state of Johor said it rejected almost 30 per cent of data centre applications in the past five months. That is as authorities try to focus on conserving resources and regulating the industry to ensure maximum benefits for the local economy.
