The Rising Costs of AI: Energy and Water Challenges in Malaysia's Data Centers
The rapid growth of artificial intelligence (AI) is reshaping the global data center landscape, particularly in Malaysia’s Johor state, which is emerging as a significant hub for data centers. With a planned capacity of 5,800 megawatts, Johor has attracted investments from major tech companies like Google and Microsoft. However, this boom comes with substantial challenges, particularly concerning energy and water resources, as the region grapples with the sustainability of its infrastructure amidst soaring demands.
As the demand for AI computing power escalates, Johor’s energy capacity is being stretched to its limits. Currently, the state has about 580 megawatts of operational capacity, but projections indicate that the total planned capacity could reach nearly 10 times that amount. This surge in energy needs raises concerns about the potential impact on Malaysia’s net-zero emissions goals, especially as the country plans to increase its reliance on gas-fired power.
Water usage is another critical issue, as data centers require vast amounts for cooling. The average 100 MW data center consumes approximately 4.2 million liters of water daily, which could strain Johor’s already limited water resources. The government is responding by implementing higher tariffs and encouraging the use of recycled water, but the question remains: can Johor balance its economic growth with sustainable resource management in the face of an AI-driven future?
Original source: https://www.cnbc.com/2025/08/18/an-asian-data-center-hub-is-quietly-grappling-with-ais-massive-costs.html