MILAN, April 27 (Reuters) - The owners of Italian telecommunications companies FiberCop and Open Fiber are discussing the terms of a possible commercial deal to complete the country's high-speed broadband rollout, three sources close to the matter said.
PETALING JAYA: Malaysia has become a more attractive destination for data centre investments following the outbreak of hostilities in the Middle East. This is because the conflict has shifted the DC narrative from a race for graphic processing units to one focused on securing land and power to ensure greenfield capacity can come online.
The conflict is prompting some operators to rebalance DC portfolios away from the Middle East toward regions like Asean, with Malaysia a frontrunner owing to its geographical advantage and cost-friendly environment. Apart from that, industry insiders said there has also been an increase in DC capacity uptake in the region.
“There are two elements to it, one is the distribution of demand out of the Middle East to all regions, including the Asean region. Malaysia is the beneficiary of this alongside Indonesia and Thailand,” said Gary Goh, chief executive officer of Sprint DC Consulting.
“The second parameter is the amount of capacity and how sustainable that is. There is a limit to how much additional capacity Asean can take on, and the war has meant a re-evaluation of assumptions, but not ruling out the entire Middle East digital infrastructure growth story,” he told StarBiz. While there could be short-term rebalancing of near-term capacity growth, Goh warned that are other regions, such as India, have much larger grids.
“There is indeed some spillover to Malaysia, but we will not know how much and how long-lasting it will be, given that some of the growth is driven by organic artificial intelligence demand, combined with the Middle East push factor. ” Goh expects hypercaler capital expenditure on AI to remain a mega trend unless there are limitations or doubts about AI monetisation.
Tradeview Capital fund manager Neoh Jia Man said while the Middle East has historically been attractive due to relatively lower energy costs, heightened geopolitical risk is now an additional factor in site selection decisions.
“That said, we do not expect a major pullout by investors from the region. Instead, it is more likely to accelerate the adoption of multi-region deployment strategies to diversify geographical risks.
“Malaysia’s geopolitical neutrality, cost competitiveness, and increasingly established DC ecosystem position it well to benefit from such diversification,” he said. Kevin Khaw of iFAST Capital Research added that Malaysia’s regulated electricity tariffs remain among the most competitive in the region, with minimal exposure to fuel cost fluctuations in the Middle East. The country also leads Asean’s upcoming DC pipeline with over 6GW in development, signalling that investor conviction in Malaysian greenfield projects remains intact.
More importantly, he believes any changes in hyperscaler capex spending are likely to be transitory.
“While some hyperscalers briefly paused Asia-Pacific DC rollout in early 2025 following DeepSeek’s launch and US tariff shocks, confidence rapidly returned and activity exceeded all expectations in the second half of the year. “We believe even this round has a similar issue , with AI workload demand structurally unrelenting.
Any plant-up pause is tactical, not directional,” Khaw said.and other Bursa Malaysia-listed firms in the past couple of months suggests sustained demand from hyperscalers and colocation providers, resulting in limited changes to planned capex and investments despite the global energy shock. Major players such as Microsoft, Amazon Web Services and Google have already operationalised or are aggressively expanding their cloud regions in the country.
RHB Research, in a thematic report, projects the Malaysian DC market value to hit US$16bil by 2031, fuelled by the transition of AI from an “explosive training” phase to a more disciplined “inference” phase. This expansion translates into a staggering RM90bil in construction value for local contractors through 2030, it forecast. Malaysia’s attractiveness is underpinned by superior economics in a world of rising costs.
The research house said despite the ongoing global energy crisis, Malaysia maintains a 30% power reserve margin and some of the most competitive electricity tariffs in the region. Also, the “Green Lane Pathway” initiative now fast-tracks power connectivity for DCs to within 12 months, drastically reducing the traditional 24-36 month timeline. Although Malaysia has remained supportive of DC investments, Tradeview’s Neoh sees it becoming more selective due to constraints around power availability, water usage and infrastructure capacity, particularly in Johor.
“This has already prompted tighter requirements, including greater emphasis on energy efficiency and sustainable water management. These measures are not prohibitive, in our view, but instead reflect a necessary shift towards more sustainable development.
“Over time, we expect a gradual spillover of DC developments into other states with more available capacity,” he said.
Datacentres Malaysia Aigrowth Cloudcomputing Digitalinfrastructure Hyperscalers ASEAN
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