Comparing the trajectory of data centre growth in the United States and Malaysia helps trace the shift from established Western digital hegemony to the rapid infrastructure scaling in emerging Asian markets. This comparison outlines how differing regulatory environments, energy constraints, and geographical advantages are reshaping the global digital economy.
In the past few years, the global data centre landscape has slowly shifted from a North American-centric model to a more fragmented, multi-polar ecosystem. While the US remains the primary anchor of global capacity, Malaysia has emerged as one of the most significant markets in the APAC region.
On one hand, the US market has moved from early-stage cloud expansion to a phase of hyperscale consolidation. In 2016, US data centres consumed approximately 2 per cent of the nation’s electricity. By 2023, that figure reached 4.4 per cent, with projections from the Lawrence Berkeley National Laboratory suggesting a rise to 6.7-12 per cent by 2030.
Growth in the US is currently characterised by grid limitations. Traditional Tier 1 hubs, such as Northern Virginia, are facing severe power constraints, forcing operators to pivot toward Tier 2 markets to secure the large-scale power required for generative AI training and inference.
On the other hand, Malaysia’s trajectory began as a domestic-focused market but shifted radically following Singapore’s 2019 data centre moratorium which imposed a temporary, three-year pause on new, large-scale data centre developments to address critical shortages in land, water, and energy. This regulatory shift transformed Malaysia, particularly the Johor and Klang Valley regions, into a primary beneficiary of “spillover” demand.
Central to this surge was a series of targeted domestic policies designed to reduce friction for foreign investors. The Green Lane Pathway, introduced by the national utility provider (TNB), effectively reduced electricity connection timelines from 36–48 months to just 12 months for data centre projects. Furthermore, the Digital Ecosystem Acceleration (DESAC) scheme and the Malaysia Digital (MD) Status provided 100% investment tax allowances on capital expenditure, significantly lowering the barrier to entry for hyperscalers.
By the end of 2024, Malaysia surpassed regional peers to become the leading digital hub in the region, securing approximately USD 23.3 billion in investment from North American hyperscalers like AWS, Google, and Microsoft in a single year. While the US data centre market grows at a steady 10–15 per cent CAGR, Malaysia is experiencing an explosive 32 per cent CAGR in planned capacity through 2028.
Note that the Indian data centre market is also projected to grow at 32 per cent CAGR between 2024-28.
The divergence between these two markets is clear: the US is now solving for efficiency and power sustainability within a saturated environment, whereas Malaysia is rapidly scaling infrastructure. Multiple states in the US, including New York, are moving to introduce legislation for at least a three-year moratorium on new data centre construction. Similar, or even stricter, bans are being considered in other areas, including Georgia and a recently proposed two-year moratorium on tax incentives in Illinois. As the US finds itself on a similar trajectory as Singapore in 2019, we can expect spillover demand resulting in multiple data centre hubs across the world, if they play their cards correctly.