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Southeast Asian Datacenter Boom Slows Amid Regulatory and Environmental Concerns
Key points
- Thailand paused 49 datacenter projects and delayed 117 more in September 2026.
- Indonesia halted a datacenter project due to lack of permits and environmental assessment.
- Southeast Asia holds 50% of Asia Pacific's under-construction datacenter capacity.
- Malaysia's Johor state became the largest regional hub, attracting $40bn investment.
Thailand Halts Datacenter Expansion
In September 2026, Thailand paused construction on 49 datacenter projects and deferred approval decisions for an additional 117 projects. This action stems from growing concerns regarding the lack of sufficient regulatory and monitoring details for these developments. Earlier in 2026, the country had approved significant datacenter investments from TikTok, Skyline, and Bridge Datacentres, totaling $27 billion.
Indonesia Follows Suit with Project Halt
Thailand is not the only nation in the region reconsidering datacenter developments. In Indonesia, the governor of West Java, the country's most populous province, halted construction on a datacenter. The reasons cited were a lack of necessary permits and an incomplete environmental assessment process.
Southeast Asia's Role in Global Datacenter Growth
The global increase in AI usage has fueled a surge in datacenter demand, positioning Southeast Asia as a primary growth center in the Asia Pacific region. A 2026 report by Cushman and Wakefield indicates that Southeast Asia accounts for approximately 50% of the total under-construction datacenter capacity in Asia Pacific, with Malaysia and Thailand contributing significantly to this share.
Shift from Singapore to Malaysia
Singapore, previously the leading datacenter hub in Southeast Asia, implemented a moratorium on new datacenters from 2019 to 2022 due to high water and electricity consumption. Since then, approvals have been selective, with only 95MW of operational capacity added between 2023 and 2026. This shift has benefited Malaysia, particularly the state of Johor, which saw its operational capacity grow from 94MW in 2023 to 1110MW in 2026, with an additional 3088MW under construction or planned. Johor has attracted $40 billion in datacenter investment by 2026, becoming the largest datacenter hub in the region.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Thailand paused 49 datacenter construction projects and delayed decisions on 117 more due to insufficient regulatory details, while Indonesia halted a project over permits and environmental assessments. This slowdown occurs as Southeast Asia leads the Asia Pacific region in under-construction datacenter capacity, driven by global AI demand.