Kuala Lumpur. Google announced plans on Wednesday to invest $15 billion in Malaysia over the next two years to build data centers and related infrastructure, as demand for artificial intelligence services surges.

Malaysia has become Southeast Asia's fastest-growing data center hub, with warehouse-like facilities packed with servers used to train and run AI tools such as chatbots and image generators.

"Malaysia is one of Southeast Asia's most dynamic digital economies, driven by 99% internet penetration and rapid AI adoption across government agencies, businesses, and consumers," the US tech giant said in a statement.

The investment, which will be made between 2027 and 2028, builds on the $2 billion commitment Google announced in 2024.

AI data centers require large amounts of electricity, placing additional pressure on power grids that often remain reliant on fossil fuels. They also consume significant amounts of water to cool computing equipment.

Growing concerns over their environmental impact have fueled opposition to data center projects worldwide, with critics also raising questions about noise, pollution, visual impact, and the number of jobs the facilities create.

Google said on Wednesday that its data center campuses in Malaysian industrial zones would be designed to operate efficiently.

The company pledged to strengthen local water security and add more than one gigawatt of clean energy capacity to the national grid.

"Once operational, the facilities are projected to sustain more than 9,000 local jobs per year, with wages averaging 45% above the national median," Google said.

Malaysia accounts for more than half of the data center capacity under construction across Southeast Asia, including Indonesia, Thailand, the Philippines, and Vietnam, according to market intelligence firm DC Byte.

The International Monetary Fund forecasts Malaysia's economy will grow 5.2% in 2026, partly supported by data center-related activity.

However, data centers are projected to account for one-third of Malaysia's total energy consumption by 2035, Deputy Prime Minister Ahmad Zahid Hamidi told parliament in July.

The government said at the time that it would approve data center projects only after ensuring adequate energy and water supplies.

In October, a Finnish authority ordered work at two of Google's data center sites in the country to be halted until mandatory environmental impact assessments had been completed.

Add as a preferred source on Google +