Anwar, You Can “Jimat Air” or Have an “AI Nation” but You Can’t Have Both

By: Dylan Lim Jingyao

A YTL data centre’s water storage facilities. (Credit: Paul Mah)

In December of 2025, the Ministry of Digital’s National AI Office (NAIO) published Malaysia’s “National AI Action Plan”, outlining Malaysia’s “aspiration to be an AI nation by 2030”.

In it, NAIO outlined targets for Malaysia by 2030 to create 300,000 new jobs, along with 1.2% percentage points of incremental GDP growth all attributable to AI. Nothing in the National AI Action Plan, however, outlined a specific strategy or intent for the sustainable implementation of data centres with regard to the potential strain they could mount on domestic water infrastructure.

Ever since the “AI boom” of 2025, new data centres have been taking a toll on the municipal water supplies and existing electrical grids of Cyberjaya and Johor, among other key places in Malaysia.

An interview on BFM in September of this year with BIMB Securities’s Head of Research, Mohd Redza Abdul Rahman, further contextualises the data centre landscape:

“The narrative is shifting from promises to physical execution. Between 2021 and 2025, [the] market was heavily focused on Phase 1, which is driven by land acquisition, [unclear] announcement, and analytical construction — but this year onwards, we enter Phase 2, which is [an] operational brief phase where the primary benchmark is shifting from an announced megawatt capacity to operational capacity, meaning that the focus now is on GFA size, network connectivity, onboarding tenants, and also generating actual value.”

As clients like Google, Microsoft, Amazon, and Oracle begin to shift more computing to facilities like those in Johor, computationally intensive tasks like training new AI models will only serve to consume more water and electricity on a large scale.

Despite this, publicly available information surrounding the actual quantitative data on the water and electrical consumption of these data centres has been hazy. In November of last year, South China Morning Post (SCMP) reported an estimated 178.3 billion gallons of water used every day by data centres in Johor alone. That’s the equivalent of 269,975 Olympic-sized swimming pools, the annual water consumption of a theoretical 8 million Malaysian citizens, and almost 30 times the water usage of the United Kingdom.

Data from the Food and Agriculture Organisation puts total annual freshwater withdrawal for the United Kingdom at 8.42 billion cubic metres. The South China Morning Post’s reported figure at an annual rate would be 246.35 billion cubic metres.

These figures don’t necessarily add up, and the South China Morning Post’s estimation doesn’t seem entirely accurate. Last year, Google reported that its total water consumption worldwide climbed 34% to 10.9 billion gallons annually; a minuscule fraction of the claim SCMP put forward.

2025 data from BIMB Securities cited in The Star, on the other hand, put Johor’s data centre water consumption more in the range of 20 million litres a day, with estimates painting it to balloon to 368 million litres every day by 2030. While it’s not 30 times the water usage of the UK, 20 million litres a day is still a lot, being equivalent to the same amount of water the population of Madrid (3.3 million people) drinks in three days.

Most data centres rely on municipal drinking water; the same high-grade treated water seen in household taps and faucets — and while the facts and figures of how much water exactly is being consumed may be vague, the impact that the consumption has had on local communities is crystal clear.

Muhammad Azrien Mohammad Ali, a local resident of Iskandar Puteri, told SCMP that their community had already endured “three water disruptions” in 2025. As rising demand for water both from data centres and industrial needs mounts, water instability— especially in Johor— is being pushed to new levels. In September of 2025, nearly 800,000 were hit by sudden water cuts after pollution in Sungai Johor caused several water treatment plants to be affected.

In August of 2025, Johor MB Datuk Onn Hafiz Ghazi outlined the claims that Johor lacked the significant electricity and water supply capacity to support data centre investments as “slander and falsehoods”, stating that investors could be confident that electricity and water supply would be more than adequate.

If you want to go fast, go alone. If you want to go far, go together. And if you want to go fast and far, go with Johor.

— Onn Hafiz Ghazi, Menteri Besar Johor (August 2025)

Three months later, Johor authorities would officially ask data centres to postpone all water-cooled expansion projects for at least 18 months.

In May of this year, the Johor government had to escalate water security measures in direct response to prolonged dry weather and forecasted risk of meteorological drought.

The State Works, Transportation, Infrastructure, and Communications Committee chairman Fazli Salleh told the Johor State Legislative Assembly the following:

“Certain parts of Johor are expected to experience significant rainfall deficits of up to 60% below normal levels, especially in July and August. This poses a direct risk to the raw water supply.”

And water’s not the only resource being seized by the growth of more data centres. According to global research and consultancy firm Wood Mackenzie, data centres could account for around 40% of Johor’s end-user electrical consumption by 2035, up from the 24% it totals today.

In July of this year, NAIO was replaced by AI Malaysia Berhad, and Prime Minister Datuk Seri Anwar Ibrahim’s speech upon the officiation of the new, formally institutionalised entity outlined his pride in Malaysia moving forward at a faster and more convincing pace despite problems and constraints. He spoke on AI sovereignty and overhauling the education system to provide access to AI, along with new programs to subsidise AI subscriptions for 100,000 young adults. Digital Minister Gobind Singh Deo said AI Malaysia would act as the institutional structure required to coordinate the implementation of Malaysia’s AI Nation ambition. According to him, AI Malaysia has less than 60 months to fulfil the vision of AI Malaysia 2030.

The question left up in the air, then, is whether that deadline has room to fit AI policies conducted not just from educational and safety perspectives; but from environmental and resource-aware considerations.

No country can build what is called an AI Nation at the old pace. The changes are unprecedented and require a speed that we have never achieved before.

— Anwar Ibrahim, Prime Minister of Malaysia (July 2026)

What citizens of Johor can only hope, then, is that their local communities aren’t left behind in the process.

For sources click here.