An AI factory is a new class of digital infrastructure designed to industrialise artificial intelligence. Unlike traditional data centres built for general-purpose IT, AI factories are engineered to support large-scale GPU clusters, high-density power and cooling, and the continuous training, inference and deployment of AI models.
They combine resilient data centre design with cloud connectivity, sustainability controls and sovereign hosting, enabling organisations to move AI from experimentation into production at scale.
KL1 Kuala Lumpur has been conceived as precisely this kind of platform for Malaysia’s next phase of digital and AI-driven growth.
Malaysia is entering a decisive moment in its AI and data centre journey. Under the National AI Roadmap, the government aims to make AI a cornerstone of the economy by 2030, with AI projected to contribute around RM530 billion to national GDP by that date.¹ In parallel, Malaysia’s hyperscale data centre market is forecast to grow from USD 6.03 billion in 2025 to more than USD 40 billion by 2031, expanding at over 37 percent annually.²
This growth reflects a broader ambition to position Malaysia as a regional AI and digital hub. The Malaysian Investment Development Authority (MIDA) has identified AI as a central pillar of national digital and industrial strategies, and investment momentum is building accordingly. Recent analysis suggests Malaysia could attract up to RM169.2 billion in AI and data centre investments by 2030, driven by global hyperscalers and technology firms.³
At the same time, global AI adoption is reshaping infrastructure requirements. KPMG estimates that data centre power demand in Asia could rise by around 165 percent by 2030, largely driven by AI workloads and dense GPU deployments.⁴ For Malaysian CIOs and boards, the challenge is no longer whether AI-scale infrastructure will be required, but where it can be deployed securely, sustainably and at speed.
This is the context in which KL1 Kuala Lumpur has been developed.
KL1 Kuala Lumpur is NEXTDC’s first data centre outside Australia and its flagship facility in Southeast Asia. Located in Petaling Jaya, close to central Kuala Lumpur and the Klang Valley’s major business hubs, KL1 sits at the heart of Malaysia’s commercial and innovation corridor.
Key characteristics of KL1 include:
AI workloads place fundamentally different demands on infrastructure. Training clusters, large language models and real-time inference environments can drive rack densities from tens to hundreds of kilowatts, requiring new approaches to power delivery, cooling and resilience. Industry research suggests AI workloads could account for up to 70 percent of total data centre capacity demand by 2030.5
KL1 has been architected with these requirements in mind. Its design roadmap supports high-density GPU deployments across its 65 MW IT capacity, enabling organisations to scale AI workloads beyond traditional enterprise density limits. This allows AI initiatives to move from pilot to production without repeated infrastructure redesigns or capacity constraints.
Related reading: Scale Engineered for AI: NEXTDC KL1 Kuala Lumpur and Malaysia’s High-Density Data Centre Infrastructure
As AI-driven infrastructure expands, sustainability has become a central concern for regulators and policymakers. Malaysia has signalled greater scrutiny of data centre projects, particularly around energy and water use, with expectations that operators invest in efficient and environmentally responsible designs.6
KL1 addresses these expectations from the outset. It has received a Platinum Provisional Rating under Malaysia’s Green Building Index (GBI), the highest level under the national framework. This aligns KL1 with global sustainability benchmarks such as LEED and Green Star, and reflects best-practice performance across several dimensions:
For organisations under pressure to demonstrate that AI adoption aligns with sustainability commitments, KL1 Kuala Lumpur aims for offers a credible, certifiable infrastructure platform.
Related reading: Raising the Sustainability Benchmark for Data Centres in Malaysia
Once AI systems move beyond experimentation, the question of where they run becomes just as important as how they perform. For Malaysian enterprises, particularly in regulated and public-sector environments, data sovereignty is no longer a policy discussion. It is an infrastructure decision.
AI models, training datasets and inference pipelines increasingly need to remain within national jurisdiction, with clear control over data access, processing and operational accountability. This is shaping how organisations evaluate data centre locations, operating models and long-term platform partners.
Related reading: Sovereign Infrastructure for AI and Regulated Workloads in Malaysia
As AI systems move into regulated environments, security and resilience are no longer abstract principles. In Malaysia, frameworks such as Bank Negara Malaysia’s Risk Management in Technology (RMiT) have raised expectations around availability, operational control and accountability for critical systems.
High-density AI workloads leave little tolerance for failure. This shifts security and resilience into the infrastructure layer, where fault tolerance, disciplined operations and clear responsibility matter most. NEXTDC’s experience operating Tier IV environments for regulated workloads has shaped this approach, treating resilience and security as baseline conditions for production AI.
Related reading: Secure, Resilient AI Scale and High-Density Data Centre Growth in Malaysia
With sovereignty and resilience in place, the final constraint is often speed. Not technical speed, but organisational speed.
CIOs are under pressure to deliver AI and digital capabilities faster, while still satisfying boards, regulators and customers. When infrastructure lacks clarity or assurance, progress slows. Reviews multiply. Risk escalations follow.
KL1 is designed to reduce this friction. By embedding governance, resilience and security into the infrastructure layer, it enables organisations to move from decision to deployment with fewer blockers and less rework. Speed becomes sustainable, not risky.
Related reading: Building Trust at Speed. The Infrastructure Question Malaysian CIOs Can’t Ignore
Malaysia’s AI ambitions, infrastructure expansion and regulatory direction together create both opportunity and urgency:
Within this environment, KL1 stands out as one of Malaysia’s most advanced AI factory platforms. It brings together AI-ready power and cooling, Tier IV resilience, the highest sustainability standard, and sovereign, onshore hosting in Greater Kuala Lumpur.
For CIOs, digital leaders and cloud providers, KL1 offers a place where AI and high-density workloads can scale securely, sustainably and with long-term operational certainty.
KL1 is currently under development and positioned as a next-generation AI and digital infrastructure hub for Malaysia’s most dynamic enterprises and service providers.
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