Johor data centres could grow even faster
Upcoming U.S. policies could speed up Malaysia's data centre growth.
Will Donald Trump's win negatively impact Johor's data centre development? I don't think so. In fact, it might grow even faster. Let me explain.
One concern with Trump being U.S. president is how he could impose more protectionism measures on China. And that this will impact Johor data centres with Chinese customers.
However, I think Johor data centres could grow even faster. Here's why.
Data centre growth to surge
As I previously noted, GPU clusters used by the likes of Anthropic, Meta and OpenAI to train AI are tripling with each generation.
- Current AI models trained on 100K GPUs.
- Next-gen GPU clusters will need 300K GPUs.
- What of the next, next-gen AI? One million GPUs?
An AI cluster with a million GPUs isn't a far-fetched idea.
Meta already has plans to scale its GPUs to a million H100 equivalents, and Microsoft is scrambling to make AI training using multiple data centre campuses a reality.
The main barrier today is power, which is why so many tech giants are seriously evaluating nuclear power. Well, energy should be less of an issue with Trump.
He's known to favour:
- Relaxed environmental regulations, oversight.
- Supporter Elon Musk is also building AI data centres.
I predict faster U.S. data centre growth as energy production ramps up - they'll likely come from delaying the decommissioning of coal plants or new fossil fuel plants though.
Johor is a hub by itself
As U.S. data centres surge, expect this growth to be mirrored in other parts of the world - including Johor. Because nobody can afford to be left behind in the AI race.
It's also worth noting that Johor has grown into a data centre hub of its own, not just serving Chinese customers.
- NTT, Equinix have/will have Johor data centres.
- Internet exchanges are being set up in Johor.
- Not being in Johor is becoming a liability.
As recently as mid-last year, I've publicly expressed doubts about whether Johor's meteoric trajectory is sustainable. Today, I do not doubt that its growth will continue to soar.
Managing surplus capacity
But what of overcapacity? After all, demand must plateau at some point, right?
It's worth noting that data centre operators have various strategies to deal with this.
- Some have tremendous financial holding power.
- Others have strategies that go beyond Johor.
- Building in phases with delays in between.
- Acquired land but not building yet.
So yes, supply will eventually exceed demand. It's not happening yet, but you can bet every data centre operator is preparing for that eventuality.
What are your thoughts about the Johor data centre market?
