The datacentre arms race hits pause in south-east Asia
Summary
South-east Asia has become a major destination for datacentre construction as demand for artificial intelligence services grows, with Malaysia and Thailand leading much of the region’s planned capacity. But concerns about regulation, permits, environmental reviews, and pressure on power supplies have led authorities in Thailand and Indonesia to pause some projects.Key Facts
- Thailand paused construction on 49 datacentre projects and delayed approval decisions on 117 more in September 2026.
- In Indonesia, West Java’s governor halted construction on a datacentre over missing permits and an incomplete environmental assessment.
- South-east Asia accounts for about half of Asia Pacific’s under-construction datacentre capacity, according to a 2026 Cushman and Wakefield report.
- Singapore added 95MW of operational datacentre capacity from 2023 to 2026, after limiting approvals because of land and sustainability constraints.
- Johor’s operational datacentre capacity rose from 94MW in 2023 to 1,110MW in 2026, with another 3,088MW planned or under construction.
- Johor has attracted $40bn in datacentre investment as of 2026, according to the state’s chief minister.
- Greater Jakarta has a datacentre development pipeline of 1,699MW, while Bangkok’s pipeline stands at 2,084MW.
- Wood Mackenzie estimates datacentres use 24% of Johor’s power today, a share that could rise to 40% by 2035.
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