Malaysia’s AI investment boom will tilt towards Sarawak as Johor struggles to secure power.

On 24 October, Malaysia’s prime minister said SoftBank had chosen Kuching and Peninsular Malaysia for its investments. However, SoftBank has yet to confirm the plan, and its 8 October agreement with Grab and PETROS does not commit either side to construction. Data centres need guaranteed electricity supplies before banks will finance them. With SoftBank expected to cover only part of the costs, investment will go first to locations that can secure power. Sarawak has an advantage. Sarawak Energy offers electricity contracts lasting 15–20 years at around RM0.40 per kilowatt-hour and plans to increase capacity from 5.9 to 10 gigawatts by 2030. Johor faces greater constraints. Its planned data-centre demand of 3.8 gigawatts already exceeds the state’s current total electricity demand of 2.6 gigawatts, while new substations are still needed. Across Malaysia, only 4.5 of the 8.3 gigawatts of contracted data-centre demand is connected to the grid. Sarawak is therefore likely to secure Malaysia’s largest new AI campus ahead of Johor because it can offer power sooner.