Southeast Asia data center investment surges as Malaysia, Indonesia lead

September 29, 2026 at 10:31 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Malaysia's cumulative foreign investment in information and communication reached $32.5 billion by Q1 2026, up from $11 billion in Q1 2023. Indonesia's information services investment rose to $3.4 billion in 2025 from $967 million in 2023. The growth is driven by demand from Singapore and supportive policies in both countries.

Key Facts

Malaysia's cumulative foreign investment in information and communication reached $32.5 billion by Q1 2026, up from $11 billion in Q1 2023.
Malaysia approved $96 billion worth of data center and cloud computing projects between 2021 and Q1 2026, including $24 billion in H1 2026.
Indonesia's information services investment rose to $3.4 billion in 2025 from $967 million in 2023.
Indonesia plans to grow data center capacity from 580 MW to 1.3 GW in the near-term.

Malaysia's Data Center Boom

Malaysia leads Southeast Asia's data center expansion, driven by clear policy guidance, developed infrastructure, and proximity to land-constrained Singapore. The Johor-Singapore Special Economic Zone has seen a flurry of activity, but the boom extends nationwide. The Department of Statistics recorded $11 billion in foreign investment in information and communication in Q1 2023, accounting for 5 percent of total foreign investment. By Q1 2026, that figure rose to $32.5 billion, equal to 12 percent of total inbound investment. The Malaysian Investment Development Authority approved $96 billion in data center and cloud computing projects between 2021 and Q1 2026, including $24 billion in H1 2026.

Indonesia's Data Center Growth

Indonesia is also seeing an uptick in data center investment, partly driven by demand from Singapore, especially around Batam. Nongsa Digital Park, a Special Economic Zone, offers tax and fiscal incentives, and Batam's strong subsea cable connectivity has fueled new construction. State-backed Telkom and private firms are developing large industrial-scale data centers in and around Jakarta. Antara News reports Indonesia's current data center capacity is around 580 MW, with plans to grow to 1.3 GW in the near-term. Government data shows investment in information services jumped from $967 million in 2023 to $3.4 billion in 2025.