This article was first published in the forum, The Edge Malaysia Weekly, from 13 July 2026 to 19 July 2026.
In 1901, Kaiser Wilhelm II declared that Germany had “conquered the places in the sun for itself” despite its inferior fleet. This rhetoric fueled a highly competitive naval arms race aimed at securing colonial control. This pursuit ultimately dragged Europe into World War I and its manifold consequences. Now, Asean finds itself vying for a digital version of the same A Place in the Sun.
Malaysia has quickly become one of Southeast Asia’s leading data center hubs, leveraging its strategic geography, robust fiber connectivity, abundant and affordable industrial land, reliable power access, and deep-rooted semiconductor ecosystem. The economic promise is well known: modernization, job creation, global competitiveness, and unprecedented productivity. Digital infrastructure is as fundamental to modern economies as deep-sea ports were in the commercial era.
But before the next celebratory ribbon-cutting ceremony, we must pause. In the Anthropocene era, where human actions shape natural responses, unchecked infrastructure expansion poses significant economic, environmental, and extractive risks. To ensure that this boom produces sustainable human prosperity rather than building an “artificial intelligence (AI) bubble,” policymakers must address three key questions.
First, what is our blueprint? Have we misunderstood the strategies of major technology countries? History shows that successful countries did not achieve greatness because of AI or data centers. They succeeded because they established world-class universities, encouraged local entrepreneurship, invested heavily in basic research and development, and tapped into a rich meritocracy talent pool. China, Singapore and the Nordic countries have become economic powerhouses through decades of investment in manufacturing, communications, digital infrastructure and research institutions. AI is the child, not the parent, of these systems. Without this foundational investment in human capital, computing power becomes an empty commodity.
Second, what is the net return? Beyond the core investment dollar amount, is our trajectory built to be pro-worker, pro-environment, and pro-society? Without clear guardrails, we risk importing resource-intensive, low-employment infrastructure while failing to ask whether these tools are designed to actively grow local wages, protect our power grids and water security, and keep our children and students safe.
Job insecurity due to AI is at the forefront of the minds of many workers in ASEAN. A typical corporate narrative promises that AI will easily automate menial tasks, freeing us up for high-value creative tasks. But in developing countries, this change often means structural relocation without safety nets. Hyperscale data centers are known for having low employment rates once construction is complete. This means committing vast national resources to an industry that provides few long-term, well-paid local jobs. If our exposure to the light means only providing cheap labor for data annotation and outsourced content moderation under the guise of technology jobs, we have failed.
For AI to be truly pro-worker, industrial policy must mandate that technology enhances, rather than replaces, human capabilities. This means tying data center approvals to measurable national ramifications. Tax incentives related to wage increases as well as the number of employees. And beyond just physical maintenance, it also includes a pathway to integrate Malaysian engineers into core algorithm design.
As end users, we perceive AI as frictionless. Enter the prompt and the answer will appear immediately. A single query is simple and consumes about the same amount of energy as a few seconds of video streaming. The real issue is scale. AI systems process billions of prompts every day, each served by a vast infrastructure of servers, chips, and power systems that operate 24 hours a day. When multiplied together, these negligible individual costs add up to huge power and water demands that strain power grids and cooling systems, especially in hot climates.
Globally, data center power consumption is predicted to more than double from 448 terawatt hours in 2025 to 945 terawatt hours by 2030, exceeding Japan’s current total electricity usage, while generating 399 million tons of carbon dioxide, consuming 9.3 trillion liters of water, and occupying an area of more than 14,500 square kilometers. This crisis at the intersection of energy, water and industrial policy is most evident in Malaysia.
With digital investment of RM144.4 billion from 2021 to mid-2025, data center energy demand is expected to exceed 5,000mw by 2035, equivalent to almost 40% of Peninsular Malaysia’s current capacity, which has already imposed restrictions on non-AI facilities to ease pressure on the grid. Ultimately, the central challenge for Malaysia and the ASEAN region is meaningful policy change. That means deciding whether new computing infrastructure can only be approved if its overall impact on power, cooling, land, water, and emissions is fully measured, priced, and aligned with the Paris Agreement’s climate commitments.
Third, how do we ensure geopolitical alignment? How do we work with ASEAN countries and our neighbors in the global majority to prevent a race to the bottom and ensure that we define our digital future rather than simply hosting advanced digital extraction? History has warned us of the costs. In the late 19th century, Malayan geta-percha (latex) was aggressively extracted through painstaking manual labor to disrupt the British Empire’s telegraph networks, leaving ecological scars as trees were cut down for the physical systems that built Western wealth. Today, modern fiber-optic lines follow the same route as in colonial times, with around 98% of the world’s data traffic controlled by powerful Western technology conglomerates that connect private facilities.
A global majority of our peers are already rethinking their policies to protect data sovereignty. Singapore has ended data center expansion through a strict moratorium requiring tropical standards that force operators to operate efficiently at high temperatures to protect the national power grid. Morocco has re-established itself as a gateway to Africa by securing major AI investments in the Dakhla-Oued-Eddahab region under a sovereign wind and solar power-only supply agreement. Latin American countries have come together to fund the Latin American GPT, resisting Western epistemological bias with regional coalitions asserting indigenous data sovereignty and legal personhood in an overstressed basin.
By rushing to host these networks without similar regional coherence, we will find ourselves in a new era of extractivism. That means subsidizing a Westernized model and its embedded biases that erase local oral traditions, inheriting low-paying data labeling, and hiding environmental impacts behind opaque confidentiality agreements. True collaboration means treating our shared natural and digital assets as sovereign capital rather than cheap commodities.
Bottom line: Are data centers and AI worth it?
Yes, there are some caveats. The proliferation of data centers and AI will only be justified if it improves Malaysia’s national capacity, resilience and skills, while actively regenerating the ecological and social systems that sustain economic growth. Don’t treat computing as something to be mined and shipped. It must deliver benefits that people can see and share, delivering better public services, stronger local businesses and cities built for a hotter future.
Malaysia must push back against the “big tech” narrative of unlimited land, power and water and become a true custodian of the health of its people and planet. Without solid rules built on these values, this country risks an economic and environmental spiral out of control. As WB Yeats said, “The center cannot be maintained.”
To control this rapidly evolving chain of events, Malaysia can adopt “frugal AI,” a lean approach inspired by the French Institute for Standardization. The rules are simple. AI is only used when it has a better social and environmental impact than less power-intensive alternatives. All applications are audited and ranked based on their footprint. Wasteful use will be replaced with low-tech tools. Important but frequently used items, such as health and education, will be shared equitably. Only the lightest technology is available for free to everyone.
This “low little tech” approach transforms AI from a high-emission luxury to a highly regulated utility. Just as the green transition is driven by bicycles and extensive public transportation rather than sports cars, keeping AI on the right side of history means keeping it within the boundaries of the planet and respecting human rights.
Professor Tan Sri and experienced crisis leader Dr. Jemilah Mahmoud is Executive Director of the Sunway Planetary Health Center at Sunway University, Malaysia. She is the founder of MERCY Malaysia and has held international leadership roles with the United Nations and the Red Cross for the past ten years. She also serves on several corporate and non-profit boards worldwide and nationally. In 2019, she became the first Malaysian to win the ASEAN Award.
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