KUALA LUMPUR (June 12): Singapore Telecommunications Ltd, commonly known as Singtel, is believed to be the latest international company to be setting up a data centre in Johor, Malaysia.

Singapore-listed Singtel, via its regional data centre business Nxera, is said to be in talks with Malaysian authorities to set up a data centre in Iskandar Puteri in the southern state, sources told The Edge.

According to its website, Nxera currently operates two data centres in its home country of Singapore, namely DC West and Kim Chuan 2. Another data centre, DC Tuas, is currently under construction and is expected to be operational in 2025.

Besides that, Nxera is also currently constructing a data centre in Thailand, and another one in Indonesia.

Interestingly, property developer UEM Sunrise Bhd (KL:UEMS) said on Tuesday that it is selling land for RM144.9 million cash for the development of a data centre in Johor.

Coincidentally, the two parcels of freehold land measuring about 11.7 hectares (28.9 acres) are also located in Iskandar Puteri.

UEM Sunrise did not disclose the identity of the buyer, merely referring to it as “a leading global data centre industry player”.

Notably, Malaysia has taken a somewhat liberal approach in welcoming companies from around the world to set up data centres in the country to boost its ambition to become a regional data centre hub.

From 2021 to 2023, Malaysia approved RM114.7 billion worth of investments in data centres and cloud services, creating 2,325 high-value jobs in specialised fields such as data scientists, data analysts, data engineers, cybersecurity analysts, and network engineers, according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The minister announced on Tuesday that his ministry is developing special incentives for AI data centres, as part of the government's show of commitment to accelerate the nation's digital transformation agenda across all sectors, while also facilitating the transition to a high-income economy.

Last month, Google announced that it has committed to investing US$2 billion (RM9.43 billion) in Malaysia to develop its first data centre and Google Cloud region in the country, which will be located in Sime Darby Property Bhd's (KL:SIMEPROP) Elmina Business Park in Selangor.

Earlier in May, Microsoft Corp unveiled its plan to invest US$2.2 billion (RM10.38 billion) over the next four years in cloud and AI infrastructure in Malaysia.

Bridge Data Centres, a firm backed by Chinese tech firm ByteDance, had also in February announced its expansion to Cyberjaya with the development of its third data centre, MY02.

Meanwhile, China-based GDS Holdings had in March announced that it has already invested RM14.33 billion in Johor with the opening of two data centres in Nusajaya Tech Park and Kempas Tech Park.

Back in 2023, Amazon Web Services said it planned to invest US$6 billion (RM28.16 billion) in Malaysia by 2037 to strengthen its cloud services infrastructure in the country.

In the same year, YTL Power International Bhd (KL:YTLPOWR) confirmed that it is collaborating with Nvidia Corp to build an AI infrastructure that will be powered by the US-based chip giant’s technology, with the first phase of the data centre expected to commence operations by the middle of this year.