- 6 weeks ago
Malaysia’s data centre boom is making headlines. But beyond the billions being invested, what does it mean for Malaysians?
Where are the jobs? Which local businesses stand to benefit? How much power and water will these facilities need for the infrastructure that they support?
Tehmina Kaoosji speaks to Ken Siah, Principal, Global Infrastructure, Asia Pacific at Google, as Google develops its first Malaysian data centre at Elmina Business Park, Selangor.
NIAGA SPOTLIGHT looks beyond the investment announcements at the jobs, growth and resources shaping Malaysia’s data centre future.
Where are the jobs? Which local businesses stand to benefit? How much power and water will these facilities need for the infrastructure that they support?
Tehmina Kaoosji speaks to Ken Siah, Principal, Global Infrastructure, Asia Pacific at Google, as Google develops its first Malaysian data centre at Elmina Business Park, Selangor.
NIAGA SPOTLIGHT looks beyond the investment announcements at the jobs, growth and resources shaping Malaysia’s data centre future.
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NewsTranscript
00:07Hello, I'm Tamina Kaoschi and this is Nyaga Spotlight. Today on Future Affairs, our spotlight
00:12is on data centers, jobs, growth and resources. Malaysia has become one of Southeast Asia's
00:18fastest growing destinations for data centers. The investment figures make headlines, but they
00:23don't answer the questions many Malaysians are now asking. What exactly does a data center do?
00:28Where are the jobs? Which local businesses stand to benefit? And as more of these facilities
00:33are built, who pays for the electricity, water and infrastructure which they require?
00:39Today, we move beyond the investment announcement to examine what this industry means for Malaysia's
00:44economy, businesses and communities. Now, Google currently operates data centers across 11 countries
00:51worldwide and Malaysia is poised to become the 12th with Google's 2 billion USD investment
00:55to develop its first local data center in Elmina Business Park, Solangor. Joining me online
01:02for this timely discussion is Ken Sia, Principal Global Infrastructure Asia-Pacific at Google.
01:08A very good morning to you, Ken. Thank you for making time.
01:11Good morning. It's a pleasure to be here. Thank you for having me.
01:14Absolutely. So, Ken, let's get started. Now, Google already operates data centers in Singapore,
01:19Taiwan and Japan, among others, with also new sites being developed in Thailand and India.
01:24So, from this rich experience across Asia, tell us a little more from Google's perspectives about
01:30Malaysia's advantages as a place to build data centers and what are some of the key considerations
01:35as the industry is continuing to, of course, see a lot of potential growth globally.
01:42Glad to. You know, Google, we've been in the business of building data centers for over 20 years
01:47and we believe that we have a blueprint for responsible infrastructure development,
01:53which we implement before we decide where to put a data center into, regardless of location.
01:58I'll go through some of the location specifics we try to look out for now.
02:03The first, obviously, is whether there's demand for products and services,
02:07like are Google products and services being used by people in that area?
02:11And in Malaysia, especially, we're seeing great uptick in growth in use of digital tools and services and AI.
02:18Just a quick statistic here.
02:21A third-party survey found that three out of four Malaysian workers actually use AI at work
02:27to help improve their work processes.
02:30Beyond whether or not there is demand in a location, there are many other factors we look at.
02:35One is access to talent.
02:37In Malaysia, we've had no issues in hiring local talent for our data centers,
02:42and we are hiring at a very rapid rate here.
02:46Then we do very rigorous systematic studies on the health of two things,
02:52the watershed and the grid system.
02:56If these studies show that we cannot use either resource responsibly in the location,
03:02we will either decide not to build in that location,
03:04or we will come up with other solutions that allow us to add to the resources of that community.
03:11The last thing we want to do is to have the community burdened
03:16by what we are taking in terms of data center consumption.
03:19And I'm happy to go into more explanation around that later.
03:26Yeah, fantastic.
03:27Thanks very much for setting the ground for the conversation so forth as well, Ken.
03:31And now it's also very interesting to note that on the Malaysia side of things,
03:35Tanaga National Berhad or TNB, they've also announced this year also their Green Lane Pathway,
03:41which also helps to fast track electric capacity and accessibility,
03:46particularly for data center bills, reducing the time by three times
03:50in how quickly they can get you electrified if you're a data center.
03:54So lots of interesting things happening.
03:56But first, let's move into Google's also estimating that your 2 billion USD Malaysia investment
04:02could be generating more than 3.2 billion USD in economic impact
04:07and potentially create 26,500 or so jobs by 2030.
04:13Tell us a little more about what's behind those figures.
04:16And between now and 2030, how are we able to look and see
04:21and measure whether that impact is actually being realized on the ground?
04:27I can elaborate more on that.
04:29I'm happy to.
04:30So there are three ways that the economic investment that a data center brings
04:33is felt throughout the community.
04:36The first is a very highly capex investment.
04:40So during the construction and the fit-out of the data center,
04:43it will typically accrue to local companies that are involved in the construction
04:48as well as in the supply chain, which is producing equipment for items we use in the data centers,
04:55things like server racks, things like routers, things like fiber.
04:59And much of this equipment we actually source locally in Malaysia.
05:03We have more than 40 Malaysian companies currently in our supply chain.
05:08The other thing to bear in mind is that construction is a key part of the data center life cycle,
05:13but it only lasts for three to five years.
05:15So the economic impact from construction and from jobs tapers off after a while.
05:21But data centers themselves remain in operation for decades.
05:25Like our oldest data center in Google is more than 20 years old now.
05:29And it is a very long-term investment.
05:31When we start operations, we create hundreds of high-value permanent jobs within our data center.
05:38And besides the job creation inside this data center, the data center also needs to engage in recurring contracts
05:48with local businesses to make sure that the data center services keep running.
05:52So these are contracts, obviously, with renewable energy generation plants.
05:57It has contracts with service providers, consultancies, engineering consultants, legal services.
06:05And they are also contracts with equipment manufacturers because the data center is not static.
06:10We are constantly evolving the design of the data center as we adapt more advanced and efficient hardware inside the
06:18data center.
06:18And then this requires us to bring in more parts.
06:21And parts, obviously, as you know, will also need to be replaced as the data center grows in age.
06:27So all this is a very long-running investment in directing revenue from the data center towards local companies
06:35that are involved in the supply chain and in service provision as well as energy provision.
06:40And lastly, you know, the way we look at economic impact and job creation in Google is we are a
06:48little bit different from other data centers
06:52that the consumer may be familiar with.
06:55We are not a co-location provider.
06:56That means we do not lease space in our data center to third parties.
07:02We use the data center solely for our own digital services and products.
07:07And these are products that you would be familiar with.
07:10It's Google search.
07:11It's Google cloud.
07:12It's Gmail.
07:13So there is an economic multiplier effect from the productivity associated with use of those products.
07:20Many of these products are free.
07:21Google Maps, for instance, if you're a small business and you want to list yourself on Google Maps,
07:26you can list yourself there for free.
07:28It is a way of promoting your business and developing a business growth.
07:33And, you know, through the adoption of these digital tools, there is a efficiency and a productivity gain,
07:42which ultimately leads to a broader economic impact throughout the economy.
07:48Absolutely.
07:49When data move faster, of course, businesses do better and helps you scale all across the economic chain with innovation,
07:55too.
07:56Thanks a lot for that, Ken.
07:57Now, of course, which sectors are these jobs likely to be in?
08:02And you've mentioned a couple of them.
08:03But at the same time, how do actually Malaysian workers and even companies capture more of that opportunity in the
08:11years to come?
08:12Because it's important for them to already have that in mind now, even though the build is nowhere near done.
08:19It is incredibly important to us when we enter into a community that the local community benefits both from the
08:26economic impact and from the job creation of the data center.
08:30As I mentioned, there are various ways the job creation is experienced through the data center lifecycle.
08:37First, there is the construction phase.
08:39So that typically creates upwards of 4,000 jobs over a three to five year period.
08:45This involves, you know, design consultants, engineers, program managers.
08:51But this is a temporary phase.
08:53And this is not where the high value jobs are mostly coming in from.
08:58The really high value jobs, which are permanent, start when the data center begins operations.
09:04We would employ hundreds of such roles in the data center.
09:09It is a very, very varied ecosystem of roles that we have there.
09:13Obviously, we have roles which are very targeted at the primary operations of the data center.
09:19So these are roles like data center technicians who are responsible for maintaining the service.
09:25There are roles like network engineers who are responsible for making sure that the connectivity from the data center to
09:30the outside world is low latency.
09:32And working well.
09:34There are other roles like procurement managers and supply chain logistics managers that have to all coordinate and organize the
09:42equipment and the services we are dealing and contracting with locally.
09:48And finally, there are all these other roles which are ancillary to the primary operations of the data center, but
09:59still critical to them.
10:00So, for example, we will hire clean energy specialists to look into buying clean energy for the data center's use.
10:07We have community affairs development managers.
10:10We even employ cooks.
10:12You know, because we, a fun fact about Google data centers is that we have cafeterias in our Google data
10:18centers.
10:19They tend to be situated a little bit further away from densely populated areas.
10:24And because of the size of our workforce, it is not reasonable to expect them to commute every day to
10:30get a decent lunch.
10:31So, we have a full cafeteria and kitchen with cooks working in there to make sure that the data center
10:38staff get their meals there.
10:41So, plenty actually happening within the data center itself.
10:44Now, also, Google has already mentioned, Ken, that Elmina will use water cooling, which uses about 10% less energy
10:52than an air-cooled facility.
10:53Now, in Malaysia's hot, humid climate, what led to that specific choice?
10:58What about the fact that temperature, humidity, local water conditions, what role do they factor into the design?
11:06So, in our course of learning how to develop data centers over the last 20 years, we have developed a
11:12blueprint for what we consider to be responsible infrastructure development.
11:17And we believe this is the attitude that should be taken by any data center investor when they're entering into
11:22a new community.
11:24Like, the basic principle is really, it needs to be done in engagement with local community, understanding the local environmental
11:31context, and seeing what works in terms of a cooling technology for that particular area.
11:40We have a methodology called a water risk assessment, which we employ well in advance of any investment decision.
11:48So, this water risk assessment, it will look at data going back as far as 50 or 100 years in
11:55things like water level, occurrence of potential drought, rainfall, and it also projects those trends further out another 20 or
12:0730 years.
12:07So, we get a scientifically data-driven sense of what our water impact could be when we enter into a
12:17community.
12:18Now, to go back to your question on why we use water, typically, we prefer to use water where it
12:23is responsible to do so, because it uses a lot less power than air cooling.
12:32If we use air cooling, we generally have to use 10% more energy than if we use water cooling.
12:39But if our water risk assessment comes out to conclude that it is not a responsible method of cooling for
12:48us in that particular location, it's very simple.
12:51We will not use water, or we will find alternative means of cooling the data center, which is primarily air
12:59cooling, or we may be using advanced chips that use advanced methods of liquid cooling.
13:05And whatever water we do use, we have a commitment to replenish 120% of it by 2030.
13:14That means every drop of water we take out from the local watershed, we commit to putting that back plus
13:21an additional 20% of a drop.
13:23We do this through water replenishment projects that we conduct in the local watershed.
13:31Our data center in Malaysia hasn't started operations yet, so we're actually not using that much water, but we have
13:37already commenced our first project in water replenishment.
13:40That is in cooperation with the Global Environment Center and the Petaling Jaya City Council at Taman Aman Lake, where
13:50we are hoping to make the water cleaner as well as increase the water supply into the lake, thereby increasing
13:57the amount of fresh water in the lake for the residents to enjoy.
14:02Right. Thanks very much for those clarifications, Ken. We take a quick break now. Don't go anywhere. We'll be back
14:07with the rest of the conversation in a bit.
14:27Welcome back to Niagara Spotlight. Still with me, Tamina Kausji.
14:30And today's conversation is focusing around data centers, looking at jobs, growth and resources.
14:34And joining us online is Ken Sia of Asia Pacific with Google.
14:38So, Ken, continuing on with the conversation, also digging a little bit deeper into the water usage arena.
14:45Now, Malaysia's data center guidelines, they do encourage the use of reclaimed or reused water.
14:51Prospectively speaking, for the Elmina data center, what will the water source be?
14:57Where it is readily available, we actually prefer to use reclaimed or reused water.
15:03This is because the water level is of a higher purity, which means that we can run it through our
15:08cooling systems many more times before we need to top it up.
15:13And we are constantly on the lookout for ways to use more recycled or reclaimed water as our operations come
15:20online.
15:21And one thing I would like to elaborate on here is how water is actually used for cooling in the
15:28data center, because I think sometimes it may be seen as an arcane process.
15:34We use water for evaporative cooling. That means the water comes into the system.
15:39It is not changed. We do not add chemicals to it. It leaves as water.
15:45But what it does is it will be circulated several times around our cooling system and evaporated.
15:51And the water that we consider to be water that is consumed is actually water that is lost to the
15:56water cycle.
15:57So it ultimately comes back down as rain. However, as I mentioned earlier, even that water, we are committed to
16:03replacing 120% of it by 2030.
16:07So whatever fresh water we use, we consider ourselves accountable to replacing it.
16:13And this is why we are looking to do more water replenishment projects in the region.
16:17And we also want to remain transparent and accountable about our water use.
16:23Google publishes its annual water consumption by each data center site in its annual environmental report every year.
16:32And once the Almena data center has had a full year of operations, you would see this statistic starting to
16:39appear in the environmental report as well.
16:41So this is not just a claim. We have a process to make sure that we are accountable and that
16:48we are delivering to making sure that the watershed health remains healthy and is not affected by our use.
16:55That's fantastic. So there's a huge area of accountability as well as publishable data that will be available in the
17:02future.
17:02I also just wanted to take this opportunity to quickly mention that actually in August, which was sometime earlier this
17:08month, the Malaysian palm oil board, the MPOB, they did announce a major breakthrough, which is known as Sawit Ecotherm.
17:14So Sawit Ecotherm is basically a palm oil derived dielectric or non-conductive fluid, which can be actually used specifically
17:22for single phase immersion cooling in data centers.
17:25So hopefully if technology such as this actually becomes commercially viable within the next one to two years, they may
17:32actually be able to pair with data centers that are going to be soon operational in Malaysia, perhaps even Google
17:39yourselves and see whether this is a sustainable solution because that completely removes water out of the loop for cooling
17:46should it work well.
17:49Yeah. So from there, let's move on into Kent, looking at the fact that El Nino's impacts are also being
17:56felt globally.
17:57And now our metrological association to met Malaysia does expect El Nino to persist into early 2027, which can also
18:05bring hotter, drier conditions across the region and to Malaysia, too.
18:09Are there any plans on how Google is thinking around El Nino for periods when water conditions are a little
18:17less favorable than normal?
18:19Or what is the usual protocol that Google also uses globally at data centers, given, of course, that climate changes
18:25are continuing and fraught?
18:29So this goes back again to the need for a very rigorous data driven way of assessing the watershed health
18:37in a particular location.
18:38And this is why we try as best as possible to make sure we have data that goes back many,
18:44many years.
18:45Like the ideal situation for us is data that goes back 100 years.
18:49And then we also try to project that data over 30 years.
18:53So this long timeframe allows us to capture, you know, very unusual spikes or falls in the water supply in
19:01the watershed health.
19:02And before we come to an informed assessment about whether it is responsible to use water in that particular location.
19:12We also have safeguards in all of our data centers for periods of very unusual water stress.
19:18This includes water storage facilities and rainwater harvesting facilities, which are in place in El Mina.
19:26And we have emergency plans just in case there is very, very unusual water stress at a particular time, where
19:35we even look into getting water from regions which are less water stress and bringing them into a data center
19:43that is affected.
19:44What I want to stress here is that under no circumstances do we want to take away water from the
19:51community if the community needs it.
19:53We are very committed to paying our fair share for water and for power as well.
19:59You know, there are there are differentiated tariffs now for the data center industry.
20:06And we will always make sure that we pay our own way.
20:09We do not want any of our infrastructure upgrades to be transferred as costs to the ordinary consumer.
20:16And by paying our own way, let me elaborate a little bit here.
20:20It is not just about paying the tariff that we are being given, but it's also about making sure that
20:28any local infrastructure upgrades.
20:30So things like building of new water transmission lines, building of new electricity transmission lines or substations, we will finance
20:39so that these costs are not passed through in the form of higher bills to ordinary consumers or in fact
20:45other industry users.
20:46And the construction of this local infrastructure actually has a positive impact on ensuring the resilience of the overall utility
20:54system ultimately.
20:57And ultimately becoming a wider part of that ecosystem rather than just remaining purely external.
21:02Thank you, Ken.
21:03Now, Google, of course, refocusing on the issue, does have your global goal to replenish more fresh water than consumed
21:10on average across data centers and offices by 2030.
21:14You'd mentioned a little earlier that Google has already begun a water stewardship project at Tamanaman in Selangor.
21:21Work like this, how is it connecting to the water footprint of Elmina in the near future?
21:26And can Malaysians expect further conservation or replenishment projects as the data center comes closer to being complete?
21:36Yes, so the way we track and link our water replenishment and our water use is we do it transparently.
21:45So the annual environmental report will publish the water consumption of each of our data centers annually.
21:52And there will also be water replenishment figures which are published accordingly.
21:58So we can measure how we are keeping up with our 2030 goal and we hold ourselves accountable to that.
22:06So the project in Tamanaman is just a first step.
22:11But we are certainly looking for and acting on new partnerships that we hope that we can announce at a
22:19suitable time in the near future.
22:21Absolutely. And in 2025 as well, Google's already achieved roughly about 78% of your project targets for water replenishment
22:30as well.
22:31So moving along as we land the conversation, Ken, so let's say once Elmina is in operation,
22:38which numbers should Malaysians actually be looking at to understand whether the project is delivering what Google has already talked
22:46about,
22:47which is the jobs, local supply chains in particular?
22:52I think the first thing is really to look at Malaysia's own data.
22:56So Bank Negara reported on its second quarter statistics for GDP growth recently.
23:03It's shown that the economy is growing, has grown now to 6%.
23:08And that's driven very much by the manufacturing sector, which is obviously linked to data center and the semiconductor supply
23:16chain,
23:16which Malaysia has strengthened, as well as the ICT subservices sector,
23:22because there is pickup of digital services that data centers are providing.
23:27So I think that is the first port of call when you look at whether or not data center investments
23:33are benefiting the overall economy,
23:35that broad economic statistics.
23:37But in terms of Google's own goals for economic impact, we engage third parties to conduct retrospective studies
23:46on the impact that we are delivering to surrounding communities, both in jobs and in the local economy uplift.
23:59And this will similarly be done for Malaysia.
24:01And finally, for the sustainability related metrics such as power efficiency, water consumption and carbon free energy,
24:09all this is published at a very granular level in our annual environmental report.
24:18If not at the country level, then at the site level.
24:21So we were actually the first hyperscaler to start publishing metrics such as this.
24:28And we believe that this is a good practice that other players in the industry should adopt
24:33in order to make sure that they are accountable for proving that they are delivering the investment,
24:40the sustainability needs, as well as the community partnerships that they should be doing when they invest in a new
24:48country.
24:50Fantastic. Thank you, Ken, for the perspective so far.
24:52And clearly, of course, as you'd mentioned right at the top of the interview,
24:55there's also the need to take into cognition the value which data centers bring in,
25:00which is not necessarily acknowledged by just looking at PUE, power usage effectiveness,
25:06and WE, water usage effectiveness, et cetera.
25:09Well, that's all we have time for today.
25:11And overall, data centers are becoming part of Malaysia's economic future and current as well.
25:16The success will be measured not only by the investments that they are able to attract,
25:20but by the opportunities created, resources used, and value together in it.
25:25My thanks to Kensia, Principal Global Infrastructure, Asia Pacific at Google,
25:29for joining us on Nyaga Spotlight.
25:31I'm Tamina Kaosji, and for signing off for now.