China-based ByteDance, the parent company of the popular short video platform, TikTok plans to invest around $2.1 billion – or 10 billion ringgit – to set up an AI hub in Malaysia. This investment plan was announced by Malaysia's trade, investment, and industry minister, Tengku Zafrul Aziz – after his meeting with Helena Lersch, VP of TikTok.

Tengku Zafrul Aziz also posted this tweet on X:

“ByteDance intends to expand its data center facilities with an additional investment of RM1.5 billion ($317m)." He added, “This additional investment by ByteDance will undoubtedly help Malaysia achieve its target of growing the digital economy to 22.6 percent of Malaysia's gross domestic product by 2025.”

This announcement is part of growing investments by technology giants in Malaysia. Here are some of them:

• Google is planning a $2 billion investment into its first data center and Google Cloud region in Malaysia.
• Microsoft announced its plan to invest $2.2 billion in the country to grow its AI and cloud services.

In recent years, the data center market in the city of Johar, Malaysia has grown rapidly with the addition of the:

• 300MW facility by Yondr
• 360MW facility by UEM Sunrise and LogosAbout ByteDance

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TikTok’s parent company, ByteDance, is the anchor tenant of the Bridge Data Centers (BDC) MY06 hyperscale facility located in Johor’s Sedenak Technology Park. Launched in 2022, this is estimated to be Malaysia’s largest data center with a capacity of 110 MW. ByteDance is already running a data center in the Kulai region of Johor state.

Malaysia’s push towards a digital economy

Malaysia’s digital economy is among the country’s economic pillars – contributing 22.6 percent to its GDP. According to Malaysia’s Digital Economy Corporation’s CEO, Mahadhir Aziz, this percentage is set to grow to 25.5 percent by the year 2025.

As part of this digital initiative, the country launched Malaysia Digital to attract more companies and investments – while making Malaysia’s residents a part of this digital revolution.

A recent report by Cushman & Wakefield rated Malaysia at the top of the list of "fastest-growing data center market" in the Asia-Pacific region. This Southeast Asian economy has a development pipeline of 1.2GW – and can expect a 600 percent growth from its current operational capacity of 189MW over the next five years.

In December 2023, Kuala Lumpur-based YTL Power announced its agreement with the U.S.-based technology firm, NVIDIA. This partnership deal aims to build AI capabilities into its Johor-based data center. Similarly, in September, EdgeConneX announced its plans to enter Malaysia's technology industry with a 300MW data center in the Kuala Lumpur area. In partnership with a local IT firm in Malaysia, Singapore-based STT GDC is building a 20MW data center facility in the Cyberjava technology hub. 

Apart from data centers, Malaysia is set to become the next hub for AI development. Malaysia’s higher education ministry has recently launched the first AI-related course and faculty at the Universiti Teknologi Malaysia (UTM). Besides that, Prime Minister Datuk Seri Anwar Ibrahim announced the Malaysia Artificial Intelligence Consortium (MAIC) and its AI talent roadmap for 2024-2030.

Speaking at the consortium, Malaysia’s Higher Education Director-General, Professor Dr Azlinda Azman stressed on the importance of “Malaysia striving to leverage the existing AI technologies – and also innovating and developing their own AI solutions.” She added, “The primary challenge lies in motivating more students, particularly at the school level, to explore Science, Mathematics, Technology, and related fields.”

She also highlighted Malaysia’s ongoing efforts to collaborate with technology giants like Microsoft, Google, and Huawei to provide upskilling courses in AI-related fields. This consortium represented the collaboration of Malaysian government agencies with academic institutions to advance excellence and collaboration in AI technology. The initiative is also in line with Malaysia’s 2021-2025 AI roadmap to promote inclusive AI education to meet the growing AI talent demand in the country.

The decision by TikTok owners, ByteDance, to invest in Malaysia only strengthens its growing influence as a technology hub. The country is attracting billions of dollars as investments for its data centers – in the wake of rising demand for cloud and AI projects. The growing demand for AI-related services requires the presence of data centers to store massive volumes of data to train and deploy AI models.

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