On March 2, drone strikes had damaged AWS data centres in the UAE and Bahrain, disrupting cloud services across the region.1 Juwai IQI Co-Founder and Group CEO Kashif Ansari released this analysis today.
“When investors realise that billions of dollars of infrastructure could be at risk of being destroyed, they look to shift some of their investment to other locations. Most Gulf investment will proceed because it is driven by sovereign capital and long-term national strategies. But data centre operators are now looking to Malaysia and other locations to diversify and reduce risk.2
“For global operators, Malaysia is a route to diversify risk, lower costs, and stay close to Asian demand. Even if only a tiny, 0.23% share of data centre development is shifted from the Gulf to Malaysia, that would mean at least RM2.74 billion in new investment beyond the prewar baseline.”
https://www.cnbc.com/2026/03/03/iran-war-uae-drone-strikes-aws-data-centers.html 1 https://enkiai.com/data-center/data-center-risk-2026-survive-the-us-iran-kinetic-war/ 2
Image 1: Three New Malaysia data centre Market Scenarios (RM billions)
Billions of Ringgit of New Investment Is Coming
Mr Ansari said, “Malaysia’s offering of cost-effectiveness, established infrastructure, and geographic neutrality is why it was already one of the Asia-Pacific’s fastest growing data centre market before the events in the Gulf.
“Malaysia also offers supportive policy and high-quality infrastructure, such as fibre networks, a reliable national energy grid, rail, ports, and freeways. The country has some of the lowest data centre construction costs in Southeast Asia.
CHART 1: MALAYSIA DATA CENTRE MARKET INVESTMENT BOOST SCENARIOS (RM BILLIONS)
“There’s one final factor. The country’s infrastructure includes links to more than 20 international submarine cables. These enable data to travel rapidly and with low latency to users across Asia.”
“The general outlines of the likely impact are already clear. One analyst said that Malaysia is where you go when things are going badly elsewhere. Another explained that Malaysia is in a ‘sweet spot’.3
“Before the war in the Gulf, analysts were already forecasting that Malaysia’s data centre market would grow by 22.4% annually to RM54.8 billion (US$13.57 billion) by 2030. That is a rapid rate of growth and implies the market would nearly triple in 4 size in just six years. To quantify the potential impact of global events on this forecast, we modelled three scenarios.”
Three Forecast Scenarios
“We asked ourselves what happens to that forecast if Malaysia receives even a fraction of the investment that is now being reconsidered in the Gulf,” said Mr Ansari.
“Our scenarios show the market reaching between RM57.52 billion and RM68.46 billion by 2030, adding between RM2.74 billion and RM13.69 billion above the pre war forecast. Even the most optimistic of those represents just 1% of the capital currently at risk in the Gulf.
https://www.bloomberg.com/news/articles/2026-03-16/global-funds-look-to-malaysia-as- 3 iran-war-shakes-up-asian-assets
https://www.globenewswire.com/news-release/2025/01/28/3016199/28124/en/Malaysia- 4 Data-Center-Market-Analysis-2025-2030-New-Entrants-include-STACK-Infrastructure-Epoch Digital-EdgeConneX-and-Edgenex-Data-Centres-by-DAMAC.html
“I want to emphasise that these are reasonable and even conservative estimates. We conservatively forecast Malaysia capturing only a sliver of the more than RM1.2 trillion (US$300 billion) in planned spending in the Gulf, which the war has jeopardised.
“The current geopolitical disruption has only expanded Malaysia’s opportunities. You might ask yourself why it’s important that Malaysia become a global data centre hub.
“In answer, KPMG, a consulting firm, has estimated that by 2030 data centres in Malaysia could support about RM138 billion (US$34.2 billion) in economic output, RM47.6 billion (US$11.8 billion) in gross value added, and around 30,900 jobs. That is equivalent to roughly 4.1% of national economic output and 3.5% of GVA.”5
END
https://datacenternews.asia/story/malaysia-s-data-centre-sector-set-for-rapid-growth- 5 to-2030
Appendix: Detailed forecast scenarios for Malaysia’s data centre market
| Year | Pre-war Forecast of Market size (RM billions) | With +5% uplift (RM billions) | With +15% uplift (RM billions) | With +25% uplift (RM billions) |
| PRE-WAR FORECAST AND IQI’S INVESTMENT SCENARIOS | ||||
| 2026 | RM 24.42 | RM 25.64 | RM 28.08 | RM 30.53 |
| 2027 | RM 29.89 | RM 31.38 | RM 34.37 | RM 37.36 |
| 2028 | RM 36.58 | RM 38.41 | RM 42.07 | RM 45.72 |
| 2029 | RM 44.77 | RM 47.01 | RM 51.49 | RM 55.96 |
| 2030 | RM 54.78 | RM 57.52 | RM 63 | RM 68.47 |
| ADDITIONAL INVESTMENT VS. BASELINE AT 2030 | ||||
| 2030 increase | 2.74 | 8.22 | 13.69 | |
Sources: Scenarios from IQI analysis; Baseline data and CAGR from ResearchAndMarkets / Arizton. Exchange rate: 1 USD = 4.03654182 MYR (xe.com).
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