Negeri Sembilan, Malaysia, is positioning itself as a new hub for data centers, as Johor limits approvals due to resource consumption concerns.

Two data centers are under development in the state. One will be a green data center funded by US investors, while the other will be an AI data center by Malaysian firm Gamuda Bhd.

The state’s infrastructure capabilities and highway network have attracted these projects.

Gamuda will also build a water treatment plant with a capacity of 67 million liters per day to meet the data centers’ resource needs.

The state government plans to evaluate future proposals for similar facilities due to their high water requirements.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Malaysia’s data center migration follows resource constraint patterns

The shift of data centers from Johor to Negeri Sembilan represents a broader pattern of geographical redistribution driven by resource limitations that’s happening across Southeast Asia.

Malaysia’s Johor has been the region’s fastest-growing data center market, adding over 1.6 GW of supply recently, but is now actively slowing approvals due to sustainability concerns 1.

This follows a documented trend where data centers consume four to five times more electricity per square meter than traditional factories, straining local power grids and water supplies 2.

The Malaysian government has rejected a significant percentage of data center applications specifically due to water constraints, with less than 18% of water applications for data centers being approved 3.

Negeri Sembilan’s attractiveness stems from its infrastructure readiness and transportation networks, demonstrating how data center operators are strategically relocating to areas with fewer resource constraints while maintaining proximity to major urban centers.

2️⃣ Water management becoming critical to data center development

Gamuda’s commitment to construct a 67-million-liter daily capacity water treatment plant highlights how water infrastructure has become a non-negotiable prerequisite for new data center approvals.

A single data center facility can consume approximately 4.2 million liters of water daily just for cooling purposes, equivalent to the needs of a small city 3.