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Malaysia's data centre rush brings investment but strains water and power, OECD warns

Published July 28, 2026 at 8:32 AM UTC

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Malaysia has become one of Southeast Asia's fastest-growing hubs for data centres, attracting billions in investment from global tech companies. But the Organisation for Economic Co-operation and Development (OECD) warns that the boom is straining the country's electricity and water supplies while creating relatively few local jobs. The OECD's 2025 economic survey of Malaysia, released this week, said the rapid growth of data centres — which require massive amounts of energy and water for cooling — is adding pressure on utilities already serving residential and industrial users. Deputy Minister of Investment, Trade and Industry Liew Chin Tong confirmed that the government is studying new data centre projects more closely to assess their impact on power grids and water resources. In Kota Damansara, residents have submitted a memorandum to the Petaling Jaya City Council (MBPJ) complaining about noise and heat from a nearby data centre, reflecting growing local unease. The OECD noted that data centres often employ only a small number of high-skilled workers, limiting direct job creation for ordinary Malaysians. The government faces a difficult balancing act: leveraging the data centre boom to boost Malaysia's digital economy and foreign investment, while ensuring that infrastructure can cope and that local communities see tangible benefits.