Malaysia's Palm Oil Estates Are Turning Into Data Centers
An anonymous reader quotes a report from Bloomberg: Malaysia's palm oil giants, long-blamed for razing rainforests, fueling toxic haze and driving orangutans to the brink of extinction, are recasting themselves as unlikely champions in a different, potentially greener race: the quest to lure the world's AI data centers to the Southeast Asian country (source paywalled; alternative source). Palm oil companies are earmarking some of the vast tracts of land they own for industrial parks studded with data centers and solar panels, the latter meant to feed the insatiable energy appetites of the former. The logic is simple: data centers are power and land hogs. By 2035, they could demand at least five gigawatts of electricity in Malaysia -- almost 20% of the country's current generation capacity and roughly enough to power a major city like Miami. Malaysia also needs space to house server farms, and palm oil giants control more land than any other private entity in the country.
The country has been at the heart of a regional data center boom. Last year, it was the fastest-growing data center market in the Asia-Pacific region and roughly 40% of all planned capacity in Southeast Asia is now slated for Malaysia, according to industry consultant DC Byte. Over the past four years, $34 billion in data center investments has poured into the country -- Alphabet's Google committed $2 billion, Microsoft announced a $2.2 billion investment and Amazon is spending $6.2 billion, to name a few. The government aims for 81 data centers by 2035. The rush is partly a spillover from Singapore, where a years-long moratorium on new centers forced operators to look north. Johor, just across the causeway, is now a hive of construction cranes and server farms -- including for firms such as Singapore Telecommunications, Nvidia and ByteDance. But delivering on government promises of renewable power is proving harder.
The strains are already being felt in Malaysia's data center capital. Sedenak Tech Park, one of Johor's flagship sites, is telling potential tenants they'll need to wait until the fourth quarter of 2026 for promised water and power hookups under its second-phase expansion, according to DC Byte. The vacancy rate in Johor's live facilities is just 1.1%, according to real estate consultant Knight Frank. Despite its rapid growth, the market is nowhere near saturation, with six gigawatts of capacity expected to be built out over time, said Knight Frank's head of data centers for Asia Pacific, Fred Fitzalan Howard. That potential bottleneck has incentivized palm oil majors such as SD Guthrie Bhd. to pitch themselves as both landowners and green-power suppliers. The $8.9 billion palm oil producer, SD Guthrie, is the world's largest palm oil planter by acreage, with more than 340,000 hectares in Malaysia. "SD Guthrie is pivoting to solar farms and industrial parks, betting that tech giants hungry for server space will prefer sites with ready access to renewable energy," reports Bloomberg. "The company has reserved 10,000 hectares for such projects over the next decade, starting with clearing old rubber estates and low-yielding palm plots in areas near data center and semiconductor investment hubs."
"The company's calculation is based on this: one megawatt of solar requires about 1.5 hectares. Helmy said SD Guthrie wants one gigawatt in operation within three years, enough to power up to 10 hyperscale data centers used for AI computing. The new business is expected to make up about a third of its profits by the end of the decade."
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Malaysia
An anonymous reader quotes a report from Bloomberg: Malaysia
at Slashdot.
Malaysia
An anonymous reader quotes a report from Bloomberg: Malaysia
at Slashdot.
