Johor Bahru, 7 February 2026 – Malaysia’s fast-growing data centre industry has faced its first public protest, as residents in Johor voiced concerns over water usage and potential environmental pollution linked to a new hyperscale facility under construction.
More than 50 residents gathered near the data centre construction site in southern Johor, raising objections over the project’s proximity to residential areas and its potential impact on water resources and environmental safety. Protesters expressed fears that large-scale cooling requirements and industrial activity could strain local water supplies and affect the surrounding ecosystem.
Rising Tensions as Data Centre Boom Accelerates
Malaysia has rapidly emerged as a key regional hub for hyperscale data centres, driven by demand for artificial intelligence, cloud computing and digital infrastructure. The southern state of Johor, in particular, has attracted billions of dollars in investment due to its strategic location near Singapore, competitive operating costs and available land.
However, the rapid expansion has sparked growing concerns among residents and environmental experts, particularly over water consumption. Data centres require significant volumes of treated water for cooling systems to maintain optimal operating temperatures, increasing pressure on public water supplies.
Authorities have already taken precautionary measures, including tightening approvals for water-intensive facilities and requiring higher sustainability standards for new projects to manage resource constraints and environmental risks.
Balancing Digital Growth with Environmental Sustainability
The protest highlights the emerging challenge facing Malaysia as it balances economic growth driven by digital infrastructure with environmental sustainability and community concerns.
Experts warn that while data centres bring substantial investment, technological advancement and economic opportunities, their heavy consumption of water and energy can create long-term environmental pressures if not properly managed.
Malaysia’s tropical climate further increases cooling demands, making efficient water management a critical factor in sustaining the country’s ambitions to become a leading digital infrastructure hub in Southeast Asia.
Implications for Investors and Malaysia’s Digital Infrastructure Strategy
The protest underscores the importance of environmental governance and sustainable infrastructure planning as Malaysia continues to attract global tech investments. Regulatory scrutiny, community engagement and sustainable cooling technologies are likely to play an increasingly important role in shaping the future development of hyperscale data centres in the country.
While Malaysia remains a key destination for global data centre expansion, balancing economic benefits with environmental sustainability will be crucial to maintaining investor confidence and public support.
