Govt halts approvals for non-AI data centres over rising energy and water use, says PM Anwar, citing concerns over grid strain and tariffs.

PETALING JAYA: The government has halted approvals for new data centres not related to artificial intelligence (AI), citing rising concerns over energy and water consumption, Prime Minister Datuk Seri Anwar Ibrahim said.

He said projections from the Ministry of Energy Transition and Water Transformation (PETRA) indicate that supply capacity will remain sufficient for new AI-related facilities over the next one to two years.

“Energy and water consumption has risen significantly. About one-and-a-half to two years ago, the government limited approvals for new data centres not related to AI or high-value technology.

“New applications that merely take advantage of lower water and energy costs have been halted,” he said during Prime Minister’s Question Time in Parliament today.

The Prime Minister was responding to Besut MP Datuk Che Mohamad Zulkifly Jusoh, who raised concerns that rapid AI growth has increased electricity and water usage.

Che Mohamad cited statistics from the United States, where data centres consume around 4.4% of national electricity and millions of litres of water for server cooling.

Anwar said short-term energy needs can still be met, but potential strain on the national grid and the impact on electricity tariffs must be taken seriously.

Looking ahead, he noted that long-term initiatives such as the ASEAN Power Grid are underway, linking Vietnam to Peninsular Malaysia and Singapore, alongside plans to channel energy from Sarawak to Peninsular Malaysia and Singapore.

Although measures such as carbon footprint ceilings may not be directly included in the AI Governance Bill, he said they can be addressed through existing energy regulations and the relevant authorities.

 The Sun Malaysia