PETALING JAYA: Malaysia remains an attractive proposition for global data centre (DC) hyperscalers, based on the projected pipeline of new DC projects totaling 1,313 megawatt (MW).
This was despite concerns over a shift in the US government’s AI chip policies and the emergence of DeepSeek.
“While we acknowledge that the sudden emergence of DeepSeek and further shifts in the US government’s AI chip policies may prompt a near-term review, Malaysia’s resource-rich status and balanced diplomatic stance ensure that the nation remains competitive as an emerging DC hub and a key enabler in the global AI race,” CIMB Securities Research said.
It believed that prospects for inbound DC infrastructure investments in Malaysia will remain intact, and should accelerate in the coming quarters.
The research house pointed out that it has not seen any tangible signs of a significant cutback in AI investments by leading technology companies despite the rapid emergence of low-cost AI technology providers such as DeepSeek and the rollout of the US government’s AI diffusion rules.
The four “Big Tech” companies - Meta, Microsoft, Google, and Amazon - were reported to spend a combined US$320bil on AI development and infrastructure this year.
Meanwhile, the Stargate Project, led by OpenAI and Japan’s SoftBank, will invest US$500bil over the next four years to develop new AI infrastructure in the US.
CIMB Research said the redirection of DC investments to the US actually increases the export quota for advanced graphic processing units, alleviating some of the supply caps on total computational power Tier-2 countries, such as Malaysia.
It estimated a pipeline of 1,313 MW DC projects could translate to US$5.3bil–US$6.6bil (RM23bil – RM29bil) in job opportunities over the next 10 years.
The research house’s top picks include Gamuda Bhd
, IJM Corp Bhd and Sunway Construction Group Bhd (SunCon).
It said SunCon has the largest exposure to DC projects, which account for RM3.2bil of its outstanding order book (42%) compared with 7% each for Gamuda (RM2.5bil) and IJM (RM800mil).
“As DC builds grow in scale and complexity, we believe that these three financially sound contractors stand to benefit the most given their proven track record and ownership of IBS, enabling efficient delivery of these time-sensitive projects,” it added.
In terms of downstream players, Econpile Holdings Bhd could be a strong contender for more DC-related substructures that utilise contiguous bored piles for a stronger foundation.
CIMB Research, which has a “buy” call on the counter with target price of 38 sen, said Econpile has submitted two bids for piling works worth a combined RM50mil in the Klang Valley, comprising about 5% of its current tender book worth RM1bil.
