Economist: Google's US$2bil investment set to elevate Malaysia's appeal as data centre hub in region

KUALA LUMPUR: The latest significant investment of US$2 billion (RM9.4 billion) by technology giant Google in Malaysia will elevate the country's appeal as a data centre hub in the region, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the government should leverage on this opportunity to attract further investments that can enhance the complexity and diversity of the Malaysian economy.

"Google's entry is expected to significantly enhance Malaysia's appeal as a preferred destination for data centres. Malaysia offers extensive land, sustainable energy supply and a skilled workforce, creating an ideal ecosystem for companies looking to establish data centres," he told Bernama.

Google has announced its new investment of US$2 billion (RM9.4 billion) in Malaysia, including the development of its first data centre in the country and Google Cloud region to meet the growing demand for cloud services locally and around the world, as well as artificial intelligence (Al) literacy programmes for students and educators.

"This development will positively impact various industries including real estate and generate demand for power cables, substations, mechanical and engineering procurement, ventilation and air conditioning systems,” he added.

Mohd Afzanizam reiterated that the establishment of data centres will have a positive spillover effect on the economy, especially in fostering a stronger technological ecosystem, spur innovation and encourage local startups to collaborate with Google. "Collaboration between the government, educational institutions and industry players will be the key to ensure that the benefits of Google’s investment are fully realised, driving sustainable economic growth and technological advancement in Malaysia,” he said.

Meanwhile, the dean of Universiti Teknologi Malaysia’s (UTM) Faculty of Artificial Intelligence (FAI), associate professor Dr Mohd Naz'ri Mahrin, said Google's investment in Malaysia is poised to significantly enhance the country's AI capabilities, driving both innovation and economic growth.

"The establishment of advanced data centres will bolster Malaysia's cloud computing infrastructure, providing a solid foundation for AI development and deployment. This investment is expected to catalyse the creation of AI-driven services and products, boosting efficiency across various sectors and accelerating Malaysia's digital transformation,” he added.

The associate professor anticipates a thriving AI ecosystem, with startups and tech companies benefitting from Google's accelerator and incubator programmes. "This will foster a vibrant entrepreneurial environment, encouraging innovation and growth,” he said.

Mohd Naz'ri said enhanced AI infrastructure and a skilled talent pool will make Malaysia more attractive to global tech giants and investors, potentially improving its position in the Global Innovation Index. "Partnerships with academic institutions like UTM will further promote research and development in AI and machine learning, embedding these advancements into Malaysia's tech landscape,” he added. - Bernama