MBSB Research said Wednesday that it sees positive impacts of data center development to Malaysia economic growth and various sectors.
The research house said in a note that the building and setting up of data centers have been driving growth in the construction sector, particularly in the non-residential buildings.
As part of the setting up, strong imports of data center-related equipment (such as server racks) have also steadily supported a sustained rise in capital goods imports in recent years, although this has somewhat weakened in the recent months in line with the tighter rules for data center investments, it said.
It is noted that in 2024, in line with the upcycle in the global technology industry and increased investments in data centers, Malaysia’s capital goods imports grew by 29 percent.
The strong growth also persisted (growing by +29 percent) in 2025, where some of the imported data center equipment was also re-directed and shipped out to other markets.
In the first five months of 2026, however, capital goods imports declined by 8.6 percent year on year.
The amount of construction done also shows robust growth with the progress in completed construction for non-residential buildings increasing faster by 15.5 percent in 2024.
The momentum continued in 2025, growing by 16.3 percent in 2025, and even in the first quarter of 2026 (+12.7 percent year on year).
Moving into the operating phase, MBSB expects these data centers will offer opportunities for high-skilled jobs.
This is in line with the government aspiration to attract investments that will create high-paying high-skilled employment in Malaysia.
With total approved investment of MYR 144.4 billion ($34.91 billion) for 143 data center and cloud investment projects between 2021 and June 2025 as reported by the Malaysian Investment Development Authority (MIDA) , the industry could create around 30,000 to 40,000 jobs, both involved directly in the data center operations and indirectly involved in the digital economy-related
works.
“This could boost Malaysia’s employment by nearly +0.2 percent based on the recent size of total employment (first quarter of 2026: 16.73 million),” said MBSB.
In terms of overall impacts to the economy, Ministry of Investment, Trade and Industry (MITI) indicated that MYR 9.4 billion investment by Google could generate positive economic impacts valued at MYR 15.04 billion.
“Using the same multiplier, based on the total MYR 144.7 billion approved data center investment, this could provide a boost to Malaysia’s economy by around MYR 231.5 billion or 11.4 percent of nominal gross domestic product (GDP) (at current prices in 2025),
“The operation of data centers could also generate job opportunities in various sectors, including healthcare, education and finance,” said MBSB.
In another study, Malaysia Central Bank estimated that the data center boom could contribute positive impacts on investment, consumption and information and communications technology (ICT) services amounting to MYR 14.1 billion (or around +1 percent) to Malaysia’s real GDP in 2025.
In addition, from establishment and operation of data centers will generate significant spillover effects across the economy through both backward and forward linkages.
Upstream, they support construction, utilities, telecommunications and information technology (IT) equipment industries, while downstream they facilitate cloud services, ICT exports, digitalization, AI adoption and innovation.
“These multiplier effects can enhance productivity, attract foreign investment and strengthen Malaysia’s position as a regional digital hub，” said MBSB.
According to the research house, the surge in data center investments also brings about adverse impacts that are incoherent with the national push towards net-zero emissions by 2050.
It noted the operations of data centers tremendously boost energy demand given the large usage of electricity and water.
“Based on the approved investment, we could see a total of between 3,000-5,000MW of installed data-center capacity,” it added.
In line with this, Malaysia’s utility firm Tenaga Nasional Berhad (TNB) also targets to deliver 5,000MW for data center usage by 2035 (or about 18.5 percent of installed capacity in Peninsular Malaysia), to support Malaysia emerging as regional data center hub.
By early 2024, TNB reported to have received 74 supply applications from the data center consumers with total maximum demand already exceeding 11,000MW.
“From the big picture, this provides enormous growth opportunities for the domestic power industry,” said MBSB.
According to the research house, Malaysia has successfully secured a spot as a top ten global destination for data center projects.
“For Malaysia, the massive global capital of digital infrastructure positioning represents a significant transition from traditional manufacturing foreign direct investment (FDI) toward high-value, technology-intensive assets that directly support national digitalization and long-term capital formation,” said MBSB.
It is noted that Malaysia secured MYR 92.8 billion ($22.4 billion) in approved investments for the first quarter, underscoring strong economic resilience amid global geopolitical uncertainty.
Japan led as the top foreign investor, while domestic investments booked powerful year-on-year growth.
The services sector accounts for 65.5 percent of total approvals across 731 projects (expected to create 19,758 jobs).
Sector growths were propelled by the information and communications subsector, where massive global demand for AI and digital transformation saw data centers and cloud computing secure MYR 34.6 billion across 33 projects, representing 88.9 percent of the subsector’s total.
Reflecting the government’s shift toward high-quality, sustainable growth, the Malaysian Investment Development Authority (MIDA) Data Center Task Force is increasingly selective, prioritizing operators who align with national green standards and demonstrate long-term commitment over mere speed-to-market.
Malton partners NVIDIA cloud partner Ricloud for AI compute centers in Malaysia