Malaysia has the potential to turn information technology into part of its mainstream economy, according to Communications and Digital Minister Fahmi Fadzil.

This is based on current developments that have seen data technology industry players being attracted to invest in the country, he said during a radio interview.

“In the past six, seven months, Malaysia has become an investment destination for data processing centers and this enables us to have a superhighway for data.

“The issue is when we have a superhighway for this data processing, what can we generate in terms of economy, what can companies in Malaysia do to spur economic growth?” he said when interviewed by Radio Emas host Zaharah Othman during the recent London Tech Week. 

Last week, NASDAQ-listed digital infrastructure company Equinix announced plans to open its data center in Kuala Lumpur in the first quarter of 2024, following its expansion announcement last year to enter Malaysia with a data center in Johor.

Equinix said that spurred by strong cloud growth and e-commerce adoption, as well as its continued investment in 5G, Malaysia is one of the fastest growing data center markets in the ASEAN region, with much of the development attributed to Johor and Kuala Lumpur.

It was reported last month that US-based hyperscale data centre provider Vantage Data Centers will double down its commitment in Cyberjaya with an additional $3 billion investment to build a second data center campus.

In a report published in April, RHB Investment Bank’s research analyst said Malaysia as an emerging data center hub in Asia, with supportive pro-business policies to attract and retain data center investors.

The analyst said that the unity government under Prime Minister Anwar Ibrahim is committed to further accelerating digital adoption in the country, which augurs well for the domestic data center industry.

According to the research house, the positive outlook of the data center sector is also supported by the New Investment Policy unveiled by the Ministry of International Trade and Industry (MITI) in Oct 2022, where the government is looking to boost economic complexity to spur high-value job opportunities.

Aside from Amazon Web Services (AWS) and Microsoft, which have committed to setting up cloud regions in the country, it said the likes of global data center names such as GDS, Equinix, and Yondr Group are also pouring in significant capital to construct their maiden facilities in the country.

Minister: country needs to be AI-ready

On a separate matter, Fahmi also said that Malaysia needs to be ready in terms of legal provisions and regulatory framework to ensure that artificial intelligence (AI) is safely used, as its use is growing more widespread.

“We must prepare ourselves, especially in the field of AI, (such as) what are the regulatory frameworks, what laws do we need to ensure AI is safe to use and beneficial (to us), so that it can help boost our productivity and economy,” he added.

Photo by: Yimie Yong

Analyst sees Malaysia emerging as data center in Asia