Malaysia’s capital Kuala Lumpur and Jakarta, Indonesia’s capital, are emerging as key data center markets in Southeast Asia, driven by hyperscale cloud expansion and surging AI infrastructure demand, according to new research from Structure Research, an independent research firm. The growth represents a strategic shift as both cities capitalize on regional spillover effects from Singapore and position themselves as critical hubs for the next wave of digital infrastructure deployment.
What you should know: Both markets are experiencing explosive growth trajectories, with Kuala Lumpur leading the charge in percentage terms while Jakarta offers larger absolute market value.
- Kuala Lumpur’s data center colocation market is projected to surge from $300 million in 2025 to $1.1 billion by 2030, representing a remarkable 31% compound annual growth rate.
- Jakarta’s market is forecast to grow from $507.2 million in 2025 to $856 million by 2030, expanding at an 11% five-year CAGR.
- The growth is fueled by hyperscale cloud deployments, AI-driven workloads, and strategic geographic positioning near Singapore and Johor.
The big picture: Southeast Asia is entering a transformative infrastructure buildout phase, with these cities becoming central to regional digital expansion strategies.
- Major hyperscale providers including Alibaba Cloud, AWS, Microsoft, and Google are expanding in Kuala Lumpur through a mix of colocation, built-to-suit, and self-build projects.
- Jakarta is set to bring over 65MW of hyperscale colocation capacity online in 2025, with overall supply projected to double by 2030.
- Chinese cloud providers are re-engaging with new investments in Jakarta alongside U.S. hyperscalers and AI-focused platforms.
Why this matters: The emergence of these alternative data center hubs addresses critical capacity constraints and provides regional diversification options for global enterprises.
- Both cities are well-positioned to support new demand patterns, regional redundancy, and diverse workloads as traditional hubs like Singapore face capacity limitations.
- Jakarta is seeing rising interest in interconnection services, particularly from global operators and enterprises seeking regional diversification beyond established markets.
What they’re saying: Industry experts view this growth as part of a broader regional transformation.
- “Southeast Asia is entering a transformative phase of infrastructure buildout, and both Kuala Lumpur and Jakarta are becoming central to the next wave of growth,” said Philbert Shih, managing director of Structure Research.
- “Hyperscale and AI infrastructure platforms are reshaping deployment models, and these markets are well-positioned to support new demand patterns, regional redundancy, and diverse workloads.”
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