The Organisation for Economic Co-operation and Development has cautioned that Malaysia’s rapid expansion of data centres is placing mounting pressure on national power and water supplies while generating fewer jobs than anticipated.
The assessment underscores a growing divergence between the sector’s capital intensity and its broader socioeconomic impact, raising questions about the sustainability of the current growth model.
S&P Global has previously noted that the country’s data centre sector is entering a phase of recalibration as funding and physical constraints begin to hinder further expansion.
The OECD’s findings align with earlier warnings from credit rating agencies regarding the physical limits of Malaysia’s infrastructure.
S&P Global has previously noted that the country’s data centre sector is entering a phase of recalibration as funding and physical constraints begin to hinder further expansion.
The new report adds a layer of policy scrutiny, suggesting that without significant upgrades to utility grids and water management systems, the sector’s contribution to economic growth may plateau.
For investors, the implications are twofold.