Ex-MP questions PM over govt freeze on approvals for non-AI data centres

Former Klang MP Charles Santiago has questioned the government's decision to freeze approvals for non-artificial intelligence (AI) data centres.

He argued that the policy raises serious questions about whether Malaysia is regulating actual resource consumption or merely making distinctions based on a label.

Charles pointed out that AI data centres are typically more power-dense and cooling-intensive than conventional ones, making the rationale behind the freeze difficult to justify on resource grounds alone.

"So are we regulating actual water and electricity use, or regulating based on the AI label?

"AI vs non-AI is not a resource metric. If resource strain is the real concern, approvals should be based on measurable efficiency metrics, such as water usage effectiveness, power usage effectiveness, renewable energy share, and the use of reclaimed versus potable water," he said in a statement yesterday.

Last week, Prime Minister Anwar Ibrahim told the Dewan Rakyat that the government has restricted approvals for new data centres unrelated to AI to manage rising energy and water consumption.

He said the move was introduced over the past one-and-a-half to two years as demand from data centres surged alongside rapid AI development.

Anwar said projections by the Energy Transition and Water Transformation Ministry indicate that Malaysia’s electricity capacity remains adequate to accommodate new data centre investments over the next one to two years.

He added that several regional and long-term energy initiatives are being pursued to ensure future supply security, including the Asean Energy Grid linking Vietnam, Peninsular Malaysia and Singapore.

State benefits

Charles, however, challenged the government to clearly articulate what the much-touted benefits of AI data centres actually mean for ordinary people.

"The government highlights ‘high-tech’ AI benefits, but what does that mean for Malaysians? Are we building local AI companies, creating skilled jobs, and developing our own technology, or mainly hosting foreign servers? The benefits need to be clearly explained.

"AI data centres should not be justified simply because they power AI tools. The real question is whether they deliver meaningful local innovation, technology transfer, and productivity gains, not just hosting generic AI workloads or content generation," he added.

KiniTV and Malaysiakini, as part of a collaborative project with 14 media outlets across 11 countries, last year produced a special report titled “Dark Side of the Boom” that sheds light on an influx of AI-related investments in Johor and their strain on the state’s energy supply.

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