KUALA LUMPUR: Malaysia is taking the lead in digital infrastructure investments, with planned capacity at an above average of 2.8 gigawatt (GW).
The next closest market is Indonesia with just above 1.1 GW planned capacity.
Malaysia's current live capacity already slightly outperforms BMI sample average, while its planned capacity significantly surpasses the benchmark at 1.1GW.
The new 64 megawatt (MW) AI data centre campus will add to this figure.
Discounting this latest project, Malaysia's planned capacity stands at 2.8GW, whereas most other markets exhibit below average performance.
BMI - a Fitch Solutions company - said coupled with a wave of global tech firms (most notably Google, AWS and Microsoft) presenting a vested interest into Southeast Asia markets, Malaysia's economy is set to achieve its national ambitions through initiatives such as the Digital Economy BluePrint (MyDigital) and JENDELA.
"This momentum is bolstered by institutional investments from firms such as KKR, which owns a 20 per cent stake in SingTel's data centre unit and has previously invested US$2.21 billion in ST Telemedia Global Data Centres (STT)," BMI said in its note.
It said financial backing from alternative investment management firms provide the necessary support to sustain modern digital infrastructure deployments, most notably hyperscale data centres.
BMI said however that AI adoption will be contingent on the ability for AI-powered devices to connect to the Internet.
"Unfortunately, Malaysia demonstrates a relatively low 5G adoption rate compared to its Southeast Asian counterparts," it said.
As of 2023, the 5G penetration rate was estimated at 24.12 per cent of the total mobile base.
This will increase to 40.82 per cent by the end of 2024 and will eventually reach approximately 86 per cent by the end of 2033.
"This growth trajectory is modest compared to regional peers such as Singapore, which is forecasted to achieve a penetration rate of 141 per cent by 2033, up from 52 per cent in 2024, and Thailand, expected to rise from 45 per cent to 121 per cent within the same period."