The AI-driven infrastructure boom in Malaysia has hit its first major hurdle as local residents push back. According to Bloomberg, the country witnessed its first public protest against the data centre industry as residents in Johor gathered to voice grievances over environmental and health concerns.
The protest took place in the Gelang Patah district, where more than 50 demonstrators convened outside a construction site, the report said. The facility is being developed for China’s Zdata Technologies Co and is situated less than a kilometer from residential homes.
Pollution And Health Concerns
According to a report by Bloomberg, the project has become a source of daily frustration for locals who claim that construction dust has made it impossible to maintain their homes or breathe fresh air. Residents described a reality where air purifiers signal dangerously poor air quality and laundry can no longer be dried outdoors.
The project has already faced regulatory scrutiny; local authorities reportedly issued a two-week stop-work order in late 2025 due to poor construction standards. However, as work resumed, so did the tension between the developers and the community.
There are also significant fears regarding water security. Johor has previously halted approvals for Tier 1 and 2 data centres due to their massive water consumption, which sometimes reaches 50 million liters a day. While Zdata received its approval before this ban, state officials have not clarified the facility’s tier or its projected water usage, leaving residents worried about the impact on their local supply.
New Rules For Johor Data Centres
As of mid-2025, Johor had approved RM164.45 billion in related investments, with global tech giants including Amazon, Oracle, and ByteDance all seeking to capitalise on Malaysia’s proximity to Singapore. However, according to Bloomberg, the promise of job creation and digital progress in countries such as Ireland and Japan are increasingly being weighed against the realities of soaring power bills, noise pollution, and resource depletion.
The backlash in Gelang Patah follows a significant shift in how Johor manages its digital infrastructure. In 2025, the state government had moved away from a “blanket approval” approach to data centres, implementing much stricter guidelines to protect local resources. The new framework prioritises “green” data centres that utilise sustainable cooling technologies and renewable energy sources.
Under these revised regulations, the state now requires developers to prove their projects will provide high-value jobs and significant economic spillover for the local community. This policy shift was prompted by the sheer volume of investment, which raised concerns that the rapid buildout could outpace the state’s ability to provide sufficient water and electricity to its citizens.
(Source: Bloomberg, via The Edge Malaysia)
