Australia’s NEXTDC Opens $720m AI Data Center in Malaysia

Australia’s NEXTDC has opened a $720 million data center in Malaysia, betting on rising demand for AI infrastructure and cloud services in Southeast Asia as governments and companies race to expand digital capacity.

The facility, known as KL1 Kuala Lumpur, marks NEXTDC’s first international expansion and comes as Malaysia emerges as one of Asia’s fastest-growing destinations for data center investments, driven by AI adoption, growing enterprise digitalization, and supportive government policies.

Located in Malaysia’s Klang Valley technology corridor, the facility is designed to support AI and high-performance computing workloads and will deliver 65 megawatts of IT capacity once fully operational, the company said.

The project also reflects intensifying competition among regional markets including Malaysia, Singapore, Thailand and Indonesia to attract investments tied to AI infrastructure, cloud computing and hyperscale data centers.

NEXTDC Chief Executive Craig Scroggie said the rapid growth of AI is reshaping how digital infrastructure is deployed globally, with companies increasingly seeking facilities that can support large-scale computing requirements while meeting local governance and compliance standards.

Malaysia has become a key beneficiary of the regional AI infrastructure boom as global technology firms and data center operators look for alternatives to Singapore, where land and power constraints have tightened supply.

The Malaysian government has positioned AI and digital infrastructure as central pillars of its economic strategy, with Digital Minister Gobind Singh Deo saying the investment would help strengthen the country’s ambition to become a regional digital hub.

Australian High Commissioner to Malaysia Danielle Heinecke said the project also strengthens digital and investment links between Australia and Southeast Asia.

NEXTDC said the facility was designed using Tier IV standards typically associated with high resiliency and uptime requirements for mission-critical infrastructure.