A generation ago, airports were largely viewed as transport assets. Success was measured by the number of flights they handled and passengers they moved.
Today, that view feels incomplete.
The world’s leading airports are understood as economic ecosystems. Their success and value depend not only on runways and terminals, but also on the transportation networks, power systems, logistics infrastructure, workforce availability, and commercial activity that intrinsically support and surround them.
The same is becoming true of data centres.
Across Southeast Asia, governments are racing to attract digital infrastructure investment as demand for cloud services and AI continues to surge. New capacity announcements are accelerating across Malaysia, Indonesia, Thailand, and Vietnam, positioning the region as one of the world’s fastest-growing data centre markets.
Yet while data centres are becoming increasingly important to economic competitiveness, many continue to be planned and evaluated as standalone development projects rather than as strategic infrastructure assets.
The challenge facing Southeast Asia is not whether it can attract investment, but whether the infrastructure systems surrounding that investment can keep pace.
Power and water: The twin constraint
Across both Southeast Asia and the wider Asia-Pacific region, reliable and affordable power and water access has become one of the defining challenges facing data centre development.
For years, data centre planning has largely followed a familiar pattern. Developers secure land, source power, arrange water supply, establish digital connectivity, and navigate approvals. Each requirement is assessed individually, often by different stakeholders and agencies.
This approach, whilst fragmented, worked when facilities were smaller and growth was more gradual.
It doesn’t hold at the scale at which AI infrastructure is now being demanded. Power tends to dominate the conversation around expansion because grid constraints are the more visible pressure point, but water is under the same strain and moving on the same trajectory: As AI workloads intensify, cooling demands rise in step with electricity demand, and a facility’s viability depends as much on secure water access as on secure power generation.
Planning solely around today’s capacity requirements risks creating tomorrow’s constraints. The real challenge isn’t securing enough resources in isolation; it’s siting facilities alongside a resilient mix of power generation (renewable and firm capacity) and water systems built to withstand the same climate pressures already reshaping supply across the region’s fastest-growing urban centres.
Power and water are two sides of the same competitiveness question: Just as energy security shapes a market’s economic competitiveness, water resilience is fast becoming just as decisive a factor in its digital competitiveness.
Malaysia: growth outpacing the grid and straining resources
Malaysia offers one of the clearest examples of demand outpacing what current systems can support. The country has emerged as a major destination for data centre investment, particularly in Johor.
Capacity is set to more than double to 2,055 MW by the end of 2026, at a compound annual growth rate of 70% since 2020. Yet as development accelerates, power infrastructure is increasingly under pressure. Grid connection timelines have become longer, and infrastructure upgrades are being asked to support rapid growth.
This challenge is further complicated by the fact that energy systems across Southeast Asia are simultaneously being asked to decarbonise, electrify, and support growing day-to-day demand.
That growth’s impact on water is already measurable. In a recent consultation report published by the ASEAN+3 Macroeconomic Research Office, a single 100-megawatt data centre can consume over four million litres of water a day for cooling, and Johor, now home to roughly 80% of Malaysia’s operational data centre capacity, is experiencing pressure on local water infrastructure as demand for data centres accelerates.
These challenges should not be interpreted as a sign of failure. They are better understood as an early indication of what happens when digital infrastructure scales faster than the systems supporting it.
Singapore: Planning ahead of the constraint
Singapore provides a different but equally important lesson.
Its temporary moratorium on new data centres is sometimes interpreted as a brake on growth. However, it also reflects an earlier recognition of the same problem Malaysia is now encountering: that digital infrastructure can no longer be planned independently from national energy, water sustainability, and land-use objectives.
The decision signalled a shift in thinking, from maximising data centre growth to optimising how that growth aligns with wider infrastructure priorities.
Both examples point to the same conclusion: Energy, water, and digital infrastructure are now a singular planning problem.
These examples offer lessons for neighbouring countries such as Indonesia, Vietnam, and Thailand as investment accelerates.
From project-level to system-level planning
Who is responsible for getting this right?
While data centres may be the most visible symbol of the digital economy, their success depends on a far less visible network of enabling infrastructure. This infrastructure requires coordination between regulators, planners, and developers in advance, before constraints start to surface.
For governments, that means integrating digital infrastructure more closely into broader infrastructure strategies, including energy, water, and transportation planning. It means identifying growth corridors where multiple systems can scale together rather than treating each project as a standalone approval process.
It’s also worth addressing the realities that we face. Power affordability and water stress are both live, sensitive issues across Southeast Asia today, as households and industry compete for supply amid global supply disruption, rising costs, and climate pressures. Leaders and policymakers need to keep in mind that powering and cooling digital infrastructure can’t be framed as separate from the region’s residential and industrial needs. It must be planned as part of strengthening the same energy and water systems everyday life depends on.
For developers, it means assessing long-term ecosystem readiness: grid capacity, alternative energy generation mixes, water supply and treatment capacity, connection timelines, and site readiness. A location’s future competitiveness will increasingly depend on the resilience of the infrastructure around it, not simply the availability of land within it.
This is why the next phase of data centre development cannot be approached solely as a real estate exercise. Governments and developers alike need to move beyond project-level planning towards system-level planning.
Airports became engines of economic growth exactly because governments learned to plan the systems that supported them, not just the assets themselves.
Data centres are reaching a similar moment.
The conversation typically begins with a familiar question: Where should the next data centre be built? But perhaps that is no longer the most important question.
A better one might be: What needs to be built around it?
