Beyond Scale. Kuala Lumpur as the Centre of Malaysia’s Digital Infrastructure

Beyond Scale. Kuala Lumpur as the Centre of Malaysia’s Digital Infrastructure 

Malaysia’s data centre market is scaling quickly, with capacity projected to roughly double from about 1.26 GW in 2025 to 2.53 GW by 2030.¹ Johor, Penang, Sarawak and Kedah are all attracting major investments, but enterprise operating models are not spreading evenly.¹ 

For most enterprises, Kuala Lumpur remains the most strategic location for production workloads, interconnection and long-term digital infrastructure. Malaysia’s build-out is becoming more distributed, but the pattern is often consistent: Johor expands compute, Penang supports industry-linked edge, Sarawak offers a lower-carbon runway, and Greater KL remains the control point where enterprises connect, govern and run production systems.¹ ² 

Why Kuala Lumpur and Greater KL still matter 

Most of Malaysia’s banks, corporates, digital platforms and federal agencies operate across Kuala Lumpur, Petaling Jaya, Cyberjaya and the wider Klang Valley. Locating data centres close to these hubs supports lower latency, higher service reliability for mission-critical systems, and simpler governance through proximity to regulators and operations teams. 

When hyperscalers place a first in-country region, it typically aligns with the strongest mix of enterprise demand and connectivity. In Malaysia, Microsoft’s Malaysia West cloud region is strategically located in Greater Kuala Lumpur.³ The Greater KL and Cyberjaya corridor also hosts key interconnection infrastructure, including MyIX points of presence across Kuala Lumpur and multiple Cyberjaya data centres, reinforcing its role as a primary connectivity zone for production architectures.⁴ 

Malaysia’s deepest interconnection fabric 

Kuala Lumpur and Greater KL hosts Malaysia’s most mature network and interconnection ecosystem, including neutral internet exchange infrastructure and dense telco and fibre presence. MyIX, Malaysia’s neutral internet exchange, is designed to connect ISPs and content networks locally, reducing the need to hairpin traffic unnecessarily.⁴ 

Cyberjaya, in particular, is widely positioned as Malaysia’s core technology and data centre hub, rooted in the Multimedia Super Corridor (MSC) initiative and sustained by continued public and private investment.⁵ ⁶ This matters because cloud proximity is useful, but clean interconnection is what makes multi-cloud and hybrid architectures behave predictably at scale. 

No other region combines enterprise density, network concentration, cloud adjacency and operational proximity at the same level. Proximity is only half the story. The other half is the ability to interconnect across carriers and clouds without stitching everything together the hard way. 

Policy alignment and connectivity at scale 

National digital initiatives such as MyDIGITAL set a direction for cloud adoption, digital capability-building, and infrastructure readiness through to 2030.⁷ In parallel, Malaysia established the National AI Office (NAIO) on 12 December 2024 to coordinate AI strategy and governance, another signal that core digital infrastructure and oversight will remain anchored around national institutions and operating centres.⁸ 

While Johor is critical for Singapore-adjacent subsea routes and cross-border connectivity, Kuala Lumpur still functions as Malaysia’s primary aggregation point for enterprise operations. Connectivity developments, including additional cable landing capacity in Johor, reinforce Johor’s role as a connectivity growth zone.⁹ In practice, many organisations still align their operational control, security governance, and production dependencies around Greater KL’s enterprise and regulatory gravity. 

How other regions in Malaysia fit in 

Greater KL remains Malaysia’s core digital hub, but other regions are taking on increasingly specialised roles. 

Johor 

Johor has emerged as Malaysia’s primary hyperscale growth zone, driven by proximity to Singapore and a pipeline of large campus builds. Major developments in Sedenak Tech Park illustrate the scale of planned capacity, with published campus figures in the hundreds of megawatts.¹⁰ Johor has also been a key driver of Malaysia’s rapid operational capacity growth in recent market updates.² 

Johor is well suited to large-scale, compute-heavy and Singapore-adjacent workloads, including AI training, object storage and disaster recovery. However, many deployments still rely on connectivity back to Greater KL for enterprise integration, operational access, and broader governance. In practice, Johor often acts as the scale zone, while Greater KL remains where interconnect-rich architectures and enterprise operating models converge. 

Penang 

Penang plays a different role. Anchored by its semiconductor and advanced manufacturing ecosystem, particularly around Batu Kawan, it is increasingly relevant for industry-linked compute, analytics, and industrial edge use cases. Malaysia’s national push to move up the semiconductor value chain also reinforces Penang’s strategic weight in advanced manufacturing ecosystems.¹¹ 

Sarawak and other green-energy clusters 

Sarawak is positioning itself for long-term, energy-intensive workloads where electricity mix and decarbonisation pressures shape siting decisions. Sarawak Energy states its generation mix is predominantly renewable hydropower, supported by firm capacity expansion plans.¹² For organisations working towards emissions reductions, that energy profile can materially influence where future capacity is placed. 

Together, these regions complement Greater KL, forming a distributed but interconnected national data centre strategy aligned to workload type, scale and sustainability constraints. 

Malaysia’s data centre map at a glance 

Across all regions, selecting facilities that match required resilience outcomes remains essential. Uptime Institute’s Tier system distinguishes, for example, Tier III (concurrently maintainable) from Tier IV (fault tolerant) characteristics, which directly affects expected behaviour during failures and maintenance activities.¹³  

KL1 Kuala Lumpur. A strategic data centre for Kuala Lumpur 

Within this landscape, a facility like KL1 Kuala Lumpur in Petaling Jaya sits at the centre of Malaysia’s most critical digital corridor: 

• Located within the Klang Valley metro, close to enterprise headquarters, regulators and key networks 

• Engineered for high-tier resilience to support production and mission-critical workloads 

• Carrier and cloud neutral, designed to connect enterprises, cloud providers and network operators in an interconnect-rich ecosystem 

• Capacity designed to grow with Malaysia’s cloud, AI and digital-platform demand¹ ³ 

KL1 is positioned to act as a strategic control point in Malaysia’s infrastructure fabric, bridging business proximity in KL and Selangor, interconnection density across Cyberjaya and the Klang Valley, and regional reach into Johor, Penang and Borneo.