Southeast Asia is fast emerging as a global hotspot for data centres, fuelled by surging demand from AI advancements and accelerated by diversification away from China. In just one week, two of the region’s largest data-centre operators secured their biggest-ever loans, with Malaysia standing out as a primary beneficiary of this digital infrastructure wave.
Multi-Billion Dollar Deals Signal Market Momentum
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Bridge Data Centres, backed by Bain Capital, obtained a US$2.8 billion facility for its Malaysian operations.
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DayOne (formerly GDS International) launched a US$3.4 billion-equivalent borrowing round.
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More deals are in the pipeline, including India’s Yotta Data Services targeting US$500 million and Singapore’s Firmus Technologies seeking US$120 million.
The shift reflects broader investor appetite. Traditionally bank-led, funding for data infrastructure is now coming from private credit and infrastructure funds, according to Morrison Foerster partner Yemi Tepe.
Malaysia, Thailand, and India Attracting Heavy Investment
With tech multinationals diversifying their supply chains and data storage strategies, towns across Southeast Asia are undergoing transformation:
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Johor, Malaysia, has 30 data-centre projects under way and 20 awaiting approval.
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Thailand recently approved US$5.9 billion in investments, including three large-scale data infrastructure projects.
The sector is expected to grow 32% annually through 2028, outpacing the US growth rate of 18%, according to Cushman & Wakefield.
Also read: CtrlS Opens ₹4,000 Cr Data Centre in Chennai
Risk Factors on the Horizon
However, the rapid growth comes with significant geopolitical and financial risks. Escalating US-China trade tensions and potential tariffs on Asian data centre supply chains – particularly semiconductors – could slow down the sector’s momentum.
Tepe warns that such developments could lead to higher financing costs, credit risk, and investor pullback, especially from projects with Chinese affiliations.
Strategic Realignment and Future Outlook
Despite uncertainties, the sector’s momentum is clear: the intersection of AI, cloud computing, and digital transformation is driving deep-pocketed investors to stake their claims in Southeast Asia’s data economy. As governments in the region accelerate approvals and offer incentives, data centre infrastructure is becoming the backbone of next-generation AI ecosystems.
But long-term resilience will depend on how well these markets navigate trade policies, supply chain dependencies, and the global regulatory environment shaping cross-border data flows.
