JAKARTA: The artificial intelligence boom is driving rapid expansion of digital infrastructure across Southeast Asia, raising questions about how to meet demand without increasing energy use and exacerbating environmental costs.
These issues were evident at Tech Week Singapore from Sept 29 to 30, where equipment suppliers drew crowds at exhibitions such as Data Center World Asia and Cloud and AI Infrastructure.
As AI systems become more complex, operators face mounting pressure to deliver greater computing capacity while curbing electricity and water consumption by the vast, stand-alone facilities being erected across the globe today.
“Data centres evolved from computer rooms used by governments, banks and large institutions during the 1950s and 1960s,” said Srini Rao, head of ecosystems at Novagate Cloud.
The scale of this infrastructure varies considerably across Southeast Asia. According to Pritesh Swamy, senior director at Cushman & Wakefield’s Asia Pacific Data Centre Group (DCG), Singapore had operational capacity of approximately 1,068 megawatts (MW) in 2026, with another 232 MW in development and 200 MW allocated under its second Data Centre Call for Application.
Indonesia has 468 MW of operational capacity and nearly 2,000 MW in development. Meanwhile, Malaysia leads the three markets with 1,318 MW of operational capacity and 5,438 MW in its development pipeline.
“Data centres evolved from computer rooms used by governments, banks and large institutions during the 1950s and 1960s,” said Rao.
AI servers generate considerable heat, requiring energy-intensive cooling systems to prevent equipment from overheating.
“The latest AI systems are using liquid cooling, which is a water-based coolant that circulates through the equipment to remove the heat,” Rao said.
“The coolant can operate at temperatures as high as 45 degrees centigrade. The advantage here is that we no longer need to spend as much electricity to make the cooling water very cold,” he explained.
Closed-loop systems also recirculate coolant rather than continually replacing it, potentially reducing water consumption.
“With modern liquid cooling and closed-loop systems, water consumption can be reduced to almost zero. The secret is that the same cooling liquid circulates continuously, releasing heat into the outside air rather than evaporating water,” Rao added.
However, achieving such savings is more difficult in tropical countries, including Indonesia, where high ambient temperatures can limit the effectiveness of air-based cooling.
“Therefore, it will be hard for these countries to achieve near-zero water consumption, as it would require additional cooling,” said Rao, though he added that substantial savings were still possible.
Data centres based in cooler climates have another advantage: outdoor air can help remove heat from facilities when temperatures are sufficiently low, reducing reliance on mechanical cooling.
The trade-off illustrates a broader challenge: reducing water consumption does not necessarily lower a facility’s overall environmental footprint if additional electricity is required.
Limited land and electricity have shaped the geography of data centre development in the region. Singapore imposed a moratorium on new developments in 2019, prompting operators to explore nearby Johor in Malaysia, which offered land, power and fibre connectivity while remaining close to Singapore’s business networks.
“While Johor started as a spillover location for Singapore, over time, Johor has become a market on its own and has begun serving the greater Southeast Asia region,” said Swamy.
Singapore lifted the moratorium in 2022 and introduced a capacity allocation process, initially offering 80 MW to four operators. The island state allocated another 200 MW in a second round this year.
The developments have strengthened interest in the wider SIJORI region, comprising Singapore, Johor and Indonesia’s Riau Islands.
The Johor-Singapore Special Economic Zone provides a framework for closer cross-border cooperation, while operators are increasingly assessing Batam, Bintan and Karimun in the Riau Islands as potential locations for future data centres.
“Jakarta is seeing extensive data centre developments and is growing as an independent market. However, the Riau Islands are still in the early stages of development and may benefit from leveraging connectivity with Singapore, similar to Johor,” Swamy said.
Indonesia’s expansion, however, faces infrastructure constraints, including electricity availability and grid distribution, as well as a shortage of experienced workers.
“Talent is also challenging, as it is very difficult to find an expert who can spearhead the construction or operation stage,” Swamy said.
Aside from energy and water, data centres face security threats that extend beyond the information they store.
During a panel discussion on AI-related risks at Tech Week Singapore, Kevin O’Leary, head of security and resiliency, network and edge at Kyndryl ASEAN, warned that attackers could target the supporting infrastructure.
“With everything run by the internet, the hackers won’t be attacking the data directly. They will be looking at what’s supporting it: the systems, the generators,” O’Leary said.
“Hackers could also attack the cooling system, which, if it fails, stops everything in a data centre.”
Ashish Thapar, vice-president and head of cybersecurity for Asia Pacific at NTT DATA, highlighted the vulnerability of remotely controlled systems and internet-connected devices.
“We need to protect the services the data centre facilitates, especially for hospitals and organisations that cannot live without an outage,” he said.
Vijay Vaidyanathan, regional vice-president of solutions engineering for Asia-Pacific and Japan at Claroty, cited research indicating that 23 per cent of 750,000 data centres examined had internet-connected assets with risky outbound access, particularly involving power and cooling equipment.
Such vulnerabilities underscore the importance of protecting operational technology alongside conventional cybersecurity.
For Indonesia, the growing development pipeline points to substantial potential, but expansion will depend on whether its power infrastructure, workforce and operational resilience can keep pace with investment. - Straits Times/ANN
