Johor’s data centre boom raises fears over mounting water strain amid rapid tech expansion

JOHOR BAHRU: Johor’s explosive growth as a regional data centre powerhouse is sending ripples of concern across the Causeway, as questions start to rise whether Malaysia’s massive tech buildout could deepen the fragility of a water system that the nation depends on.

What’s unfolding in Johor isn’t a typical industrial push. According to South China Morning Post (SCMP), global giants like Microsoft, Nvidia, and ByteDance are pumping billions into new hyperscale data centres across the state, turning Johor into one of Southeast Asia’s fastest-growing digital hubs. For Malaysia, this is an economic windfall. For many Johoreans, however, it’s becoming a daily worry.

Residents feel the squeeze as water disruptions rise

Muhammad Azrien Mohammad Ali, a resident of Iskandar Puteri, told SCMP that he has already endured “three water disruptions” this year. Even when water does flow, he says the pressure is weaker than before. This is a worrying signal, especially since he lives in a state already known for drought and water shortages.

Earlier this month, nearly one million people were hit by sudden water cuts after pollution forced several treatment plants along the Johor River to shut down, another incident in a long pattern of water instability. And with warmer weather and rising industrial demand, the strain is only intensifying.

Data centres, which run around the clock, are extremely thirsty facilities. The machines that power global AI, cloud computing and social media services generate huge amounts of heat. Consequently, cooling them requires staggering volumes of water to keep up with the demand.

Johor now has 47 data centres built or under construction. Government estimates cited by SCMP suggest these facilities already require about 675 million litres of water every day, equivalent to 270 Olympic-sized swimming pools.

Read related: Nearly 800,000 affected by major water disruption in Johor after sand mining pond burst pollutes Sungai Johor

Singapore’s link to Johor’s digital surge

This boom is not happening in isolation. Part of Johor’s rapid expansion stems from Singapore’s decision in 2019 to freeze new data centre construction due to concerns over land use, electricity consumption and water demand.

Although the moratorium was lifted in 2022, strict sustainability controls mean many Singapore-based companies have shifted their expansion plans across the border. ST Telemedia, for instance, now operates a campus just 15 km from Singapore, according to SCMP.

For Singaporeans, this shift raises a larger question: if Johor’s water resources become overstretched, could it affect regional water security, including Singapore’s long-standing water agreements with Malaysia?

A booming tech economy with risky trade-offs

The economic upsides for Johor are undoubtedly immense. Over the past five years, tech investments have created more than 2,300 high-value jobs. Major deals include Nvidia’s US$4.3 billion (S$5.59 billion) partnership with YTL, Microsoft’s US$2.2 billion investment in digital infrastructure, and Google’s US$2 billion commitment to establishing its first Malaysian data centre region.

ByteDance, too, is expanding its footprint in Kulai with projects worth over US$2.2 billion.

Johor’s total data centre capacity has surged a hundredfold in just five years, reaching more than 1,500 megawatts — triple that of Indonesia, according to DCByte figures reported by SCMP.

However, environmentalists warn that the infrastructure supporting this boom may be buckling under the pressure.

Muhammad Shaqib bin Shahrilnizam, a conservation finance analyst from Johor Bahru, was quoted by SCMP that transparency remains a major concern. “We often hear about new projects, but not about their environmental impact or water footprint,” he said. He argues that uncontrolled growth risks squeezing residents and smaller industries that depend on the same sources.

Malaysia’s National Water Services Commission has already warned that the country’s infrastructure can only support a fraction of the water demand proposed by new data centres. Out of 808 million litres requested daily across three states, regulators say only 142 million litres can realistically be supplied.

Johor alone accounted for 90% of the water demand that regulators deemed unsustainable.

Efforts to balance progress and sustainability

Microsoft has pledged to use water-efficient cooling systems and renewable energy at its new Johor facility, alongside environmental initiatives like mangrove restoration. But scepticism on the ground persists.

“What I am afraid of is whether the state government and the water authorities can cater to both the consumption of data centres and the consumers,” Abu Bilal, a cloud engineer in Johor, told SCMP.

Authorities say new guidelines now require operators to tap recycled, rain, or desalinated water, not potable supplies, for cooling. However, enforcement and transparency remain unclear.

Read related: Johor’s data centre boom set to drive 18-fold surge in water demand, pushing shift to reclaimed wastewater

Why Singaporeans should care

Singapore’s economic future is deeply intertwined with Malaysia’s stability, especially in Johor. From cross-border supply chains and retail flows to the decades-old water agreements that remain vital for Singapore’s water security, Johor’s environmental resilience is highly intertwined with Singapore’s.

If the state’s water systems buckle under the weight of unchecked development, the consequences are unlikely to stop at its borders.

Progress means little if we drain the well dry

Johor’s data centre boom is a symbol of Southeast Asia’s digital rise. It is ambitious, global, and fast. But as the world’s tech giants build their empires just across the Causeway, the warning signs are becoming impossible to ignore.

Water shortages, river pollution, and mounting public anxiety all point to a painful truth: growth without safeguards is not progress, but self-inflicted decline. In the end, the digital future means nothing if the taps run dry. Progress is useless if nature is destroyed out of greed.

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