The pipeline of data centre projects in Malaysia is unlikely to be impacted by recent reports alleging that Chinese firms are using servers equipped with Nvidia chips to train artificial intelligence (AI) models, according to media reports, quoting MIDF Research. “There is no sign of any slowdown or delays in ongoing developments with industry players and contractors still actively involved in new tenders,” the research house said in a note.
Ongoing projects include the ongoing sale of 389 acres in Port Dickson by Gamuda Bhd to Google-linked Pearl Computing and securing a RM1.01 billion contract for data centre infrastructure works. Sunway Construction Group Bhd had also secured a RM1.16 billion job from a US tech giant, while Microsoft reaffirmed its RM10.5 billion investment in cloud and AI infrastructure, including hyperscale data centres in the Klang Valley.
The research house noted that not all data centres are built specifically for AI, even though many are AI-ready. For example, YTL Power International Bhd had set aside 100MW for AI at its 500MW Kulai facility, but 80MW was later converted into colocation space due to rising demand.
The Wall Street Journal recently reported that Chinese engineers had in March travelled to Malaysia with suitcases of hard drives to train AI models at data centres using Nvidia chips in an effort to circumvent US restrictions on China’s access to advanced chips for AI. In response, Malaysia’s Ministry of Investment, Trade and Industry (Miti) said it is still verifying the news reports. Miti said that servers using Nvidia and AI chips are not classified as controlled goods in Malaysia, and businesses — including data centres — operating in Malaysia are free to make their own commercial decisions as long as they comply with Malaysian laws and regulations.
However, the ministry emphasized that Malaysia would stand firm against any individual or company that attempts to circumvent export controls or engage in illicit trade activities, and that the government is prepared to cooperate with any country that seeks assistance in monitoring sensitive exports under their respective control regimes.
Malaysia, which has been China’s largest trading partner in Southeast Asia for over a decade, is becoming a hub for data centre investments. So far, nearly 5GW of data centre capacity have been announced in the country, driven by growing demand for cloud computing and AI.