Kuala Lumpur, 24 February 2026 – Malaysia’s government has imposed a moratorium on new data centres that are unrelated to artificial intelligence (AI) as part of efforts to alleviate pressure on the national electricity grid and water resources, Prime Minister Datuk Seri Anwar Ibrahim announced in Parliament.
Speaking during the Ministers’ Question Time session in the Dewan Rakyat, Anwar, who also serves as Finance Minister, said that the government has, for nearly two years, stopped approving applications for new data centres that do not directly support AI or related high-technology development. He explained the move is meant to ensure that rapid growth in data centre investment does not strain critical infrastructure or lead to higher electricity tariffs for domestic consumers.
“We have restricted the entry of new data centres that have nothing to do with AI. If there are benefits in terms of high-technology and AI development, approvals are easier. So, all new applications that are not related… have already been stopped,” the Prime Minister told lawmakers.
Strategic Infrastructure Planning and Regional Energy Links
Anwar acknowledged that existing data centre operations have driven an uptick in energy and water consumption, but reassured that Malaysia still has sufficient supply capacity in the near term. To support long-term sustainability, the government plans to explore regional energy connectivity solutions, including extending the ASEAN Power Grid and channeling power from Sarawak to Peninsular Malaysia and Singapore.
The ASEAN Power Grid initiative is a multilateral effort to interconnect electricity networks across Southeast Asia, potentially enhancing regional reliability and allowing surplus generation to be shared across borders when needed. Leveraging such infrastructure could be critical as digital and AI-driven industries scale and demand for stable power grows.
Emphasis on AI Governance and Ethical Frameworks
During the session, Anwar also addressed questions on the framing of Malaysia’s AI Governance Bill, which is being drafted by the Ministry of Digital Affairs. He said the Bill will prioritise ethical considerations, citizen rights and systemic risk management, in contrast to approaches in many Western jurisdictions that emphasise legal technicalities.
According to the Prime Minister, the proposed legislation will adopt an AI Risk and Classification Framework to ensure responsible use of technology, robust incident reporting and monitoring, and accountability for developers and deployers of AI systems throughout the full lifecycle of development, implementation and oversight. He stressed that existing laws such as the Copyright Act 1987 already provide protections for AI training data and outputs, but noted enforcement will be strengthened to address emerging challenges.
Source: Bernama
