Malaysia draws first data centre protest over pollution and water

KUALA LUMPUR - The rapid increase in data centres in Malaysia came under the microscope on Feb 7, with the artificial intelligence-driven buildout drawing its first public protest in the country.

More than 50 people gathered in front of a data centre construction site close to a residential area in the southern state of Johor, demanding an end to dust pollution and compensation for any negative impact that the project might have on their health. The protesters also expressed concern that the facility will impact their water supply.

Those gathered say they represent nearly 1,000 residents strewn across four housing estates in the Gelang Patah district. Located less than a kilometre from the closest homes, the project is being developed for China’s Zdata Technologies. The developers did not meet the protesters, who dispersed after 90 minutes under the watch of dozens of police personnel. 

Malaysia has emerged as South-east Asia’s main data centre hub, attracting companies from Oracle and Amazon.com to Alibaba Group Holding and ByteDance – all needing more storage and processing capacity as data-hungry AI services gain users. Tech giants are targeting the country for its relatively low cost and reliable infrastructure, as well as its close proximity to business centres such as Singapore.

Zdata and the project’s local developer, Tropicana Firstwide, a unit of Tropicana, did not respond to requests for a comment.

The Gelang Patah project is unusually close to a residential area. By contrast, a majority of completed facilities and ongoing data centre constructions are taking place in former plantations or dedicated industrial land, far from residential dwellings.

Johor has been the biggest beneficiary of Malaysia’s data centre boom since 2022, approving RM164.45 billion (S$53.1 billion) in data centre investments as of mid-2025. That has made it South-east Asia’s fastest-growing data centre hub.

Zdata broke ground on the project in early 2025. Problems started creeping up toward the end of 2025, with a two-week stop work order issued by local authorities for poor construction standards.

As the project progressed, local residents began to voice concerns about construction dust pollution disrupting their daily lives. 

“Every day I have to wash my car, every day I have to wash my porch and balcony, and I can’t get fresh air anymore in my own home,” said 42-year-old resident Venu Kannan Samraj, who participated in the protest. “I get back home, and I immediately close the living room door.”

Residents say they can’t dry laundry in their yards or balconies anymore, while air purifiers are signalling dangerously poor levels of air quality.

There are also lingering concerns about the water demands of the Zdata project. Johor in 2025 stopped approving Tier 1 and 2 data centres due to their high usage of water – up to 50 million litres of water a day. State officials have not disclosed what tier Zdata’s facility falls under. Its approval was granted before the new ban was instituted.

Relevant state officials overseeing the project did not respond to requests for comment.

Residents such as Venu are also concerned about what’s yet to come. Zdata is building its site on 38 acres of land it bought from Tropicana in 2024. Next to it sits a 27.5ha parcel that the same company sold to Japan’s NTT Data Group for another data centre. That construction hasn’t started.

Malaysia is emblematic of growing social unease with data centres worldwide, despite their crucial role in powering the internet and ChatGPT searches. In Michigan, residents are protesting a data centre campus for the Stargate Project – backed by OpenAI and Softbank Group among other tech giants – that spans more than 500 acres of farmland.

From the US to Ireland and Japan, concerns about soaring power bills, pollution, noise, and water use are overpowering promises from owners and developers of job creation and resource efficiency. Local activism has contributed to at least US$160 billion (S$203.4 billion) of projects getting blocked or delayed in the US in the last two years, according to Data Center Watch reports.

Zdata is a cloud and IT infrastructure provider headquartered in Beijing, serving an array of Chinese tech giants from Alibaba to Huawei Technologies and Tencent Holdings, according to the company’s website. It hosts several facilities across China, and Malaysia is its only overseas data centre location.

“In response to global environmental issues, Malaysian data centres are committed to sustainable development,” according to its website. “They utilise energy-saving technologies, reduce energy consumption, adopt renewable energy sources, decrease reliance on traditional energy, and actively promote carbon neutrality and environmental protection measures, providing green and sustainable data centre services for businesses.”

Equinix, a Zdata peer and one of the world’s largest data centre providers, engages with local communities – sometimes up to a year before construction begins – to avoid backlash, Mr Raouf Abdel, the company’s executive vice-president of global operations, said on Feb 3. 

Equinix already has data centres in Johor and Kuala Lumpur, and Mr Abdel said an upcoming Johor facility will use air cooling “because of the water stress and the water constraints”. BLOOMBERG