Why new GPU restrictions won't kill Malaysia's data centre boom
There's a lot more than AI going on.
Will new AI regulations from the US kill the data centre boom in Malaysia? I don't think so and here's why.
A report on Bloomberg last week highlighted new attempts by the US to further limit the export of AI chips with a new two-tier (Country, Company) system.
Even if it happens - which is not a given, I don't believe this will hurt the growth of Malaysia's data centres in the short term.
More than GPUs
I've written frequently about the rapid growth of the Malaysia data centre market in recent months, especially Johor, just across the Causeway from Singapore.
While the common refrain from data centre announcements is "AI", it is highly implausible that AI even makes up a significant amount of their workloads.
Moreover, not every data centre operator going into Malaysia is rolling out large AI deployments today, even if they all mention it in their releases.
Offerings might range from:
- Colocation.
- Public cloud.
- Network hub.
- Disaster recovery.
- Secure data storage.
tldr: there's a lot more than AI.
Too big to ignore
In the meantime, Malaysia has evolved rapidly into a data centre hub that top players simply cannot afford to ignore.
Even NTT Data, with its cautious, steady, growth strategy, announced a 290MW data centre in Johor last month that will eclipse all its existing data centres.
Investors also hedge their bets by acquiring land first and building in phases - and this won't stop. Some of these players have extraordinary holding powers, though I expect some to fail.
Targets the whole world
Finally, if you look closely at the Bloomberg illustration, you will see that there are few countries with unfretted access. In short, the proposed rules are targeted at everyone.
(Blue) The usual allies with unfretted access:
- The EU.
- Canada.
- Australia.
- New Zealand.
- Japan.
- Korea.
- Taiwan.
(Red) These are the adversaries with no access.
(Orange) The rest of the world gets painted over in orange, which includes the Middle East and Southeast Asia.
In summary, I see this as an effort by the US government to exert greater control over sales of GPUs and to shift more GPUs back to its soil.
There's too much for me to cover here, but I plan to explore this further on my Clearly Techππ¦π€π© Substack next week. You can sign up for it here.
