Malaysia's data centre surge drives gas‑fired power growth, challenging clean‑energy target

Malaysia is positioning itself as Southeast Asia’s data‑centre hub, with 54 operational facilities by the end of 2024 and a plan to reach 81 by 2035. Investments approved by the Malaysian Investment Development Authority total about 144.4 billion ringgit (US$36.3 billion), backed by AI hyperscalers such as Microsoft, Google and Amazon Web Services. The energy needed for these centres is increasingly supplied by gas‑fired turbines; gas‑power generation rose 50.5 % year‑on‑year in April, hitting a record 5.54 terawatt‑hours, while electricity demand on the peninsula jumped 11.5 %.

At the same time, Malaysia pledged to slash fossil‑fuel use by 2050. The Malaysia Digital Economy Corporation highlighted an AI‑sovereignty agenda at the Energy Transition Conference 2026, urging the development of resilient digital infrastructure, talent, data governance and sustainable energy to support a sovereign AI ecosystem. Panelists stressed the need for ASEAN collaboration, strategic autonomy, and trusted international partnerships to balance rapid digital growth with environmental goals.