Govt restricting non-AI data centres amid energy concerns, says PM

 

PARLIAMENT | The government has restricted approvals for new data centres unrelated to artificial intelligence (AI) to manage rising energy and water consumption, Prime Minister Anwar Ibrahim told the Dewan Rakyat today.

He said the move was introduced over the past one-and-a-half to two years as demand from data centres surged alongside rapid AI development.

“I believe this is already being taken into consideration because energy and water usage have indeed increased sharply,” Anwar said when responding to Che Zulkifly Jusoh (PN-Besut) during Minister’s Question Time.

According to Anwar, applications for data centres that do not involve high-technology or AI components - and are established mainly to benefit from Malaysia’s lower electricity and water costs - have been halted.

“All new applications that are unrelated, meaning data centres set up merely to utilise cheaper water facilities and lower energy prices, have already been stopped,” he said.

Anwar said projections by the Energy Transition and Water Transformation Ministry indicate that Malaysia’s electricity capacity remains adequate to accommodate new data centre investments over the next one to two years.

He added that several regional and long-term energy initiatives are being pursued to ensure future supply security, including the Asean Energy Grid linking Vietnam, Peninsular Malaysia and Singapore.

Plans are also underway to transmit electricity from Sarawak to Peninsular Malaysia and Singapore to meet longer-term demand, he said.

“God willing, these efforts will fulfil future requirements,” he added.

Concerns raised

Earlier, Zulkifly raised concerns that discussions on a proposed AI Governance Bill have focused largely on copyright and intellectual property issues, while overlooking environmental and energy governance.

Citing United States data showing that data centres consume about 4.4 percent of the national electricity supply, he warned that rapid AI expansion could significantly increase electricity and water usage, including millions of litres for server cooling.

He asked whether the proposed bill would introduce energy efficiency standards or a “carbon footprint ceiling” for technology firms planning to build AI data centres in Malaysia.

The PAS MP also questioned how the government would prevent large-scale investments in AI data centres from overloading the national grid, potentially triggering electricity tariff hikes or supply disruptions affecting households and small and medium enterprises.

Besut MP Che Zulkifly Jusoh

In response, Anwar acknowledged the concerns and said they warrant serious consideration, although such measures may not fall directly under the proposed legislation.

Instead, the premier suggested improvements could be made through existing energy laws or regulatory frameworks overseen by relevant authorities, including Tenaga Nasional Bhd.

“The concerns raised by Besut are certainly matters that we must give serious attention to,” he said.

KiniTV and Malaysiakini, as part of a collaborative project with 14 media outlets across 11 countries, produced last year the “Dark Side of the Boom” special report that sheds light on an influx of AI-related investments in Johor and their strain on the state’s energy supply. - Mkini