As global tech giants turn their attention to Southeast Asia in search of new space for computing power growth, a less prominent but clearly targeted player has quietly fallen behind. Racks Central, headquartered in Singapore, recently announced that its first data center, RCJM 1, located in an AI park in Johor, Malaysia, has officially started construction and is scheduled to enter service in the fourth quarter of 2026.

This is not another isolated project. RCJM 1 is the grand blueprint planned by the company - the launch project for the development of a 500 to 700 MW AI ready data center cluster in the SIJORI (Singapore, Johor, Riau Batam) Economic Corridor. This action marks that professional regional developers are becoming a new force that cannot be ignored in the Southeast Asian computing power competition dominated by technology giants and Asian conglomerates.

From the backyard to the forefront of computing power

Racks Central's choice of Johor is not accidental. This Malaysian state, located just across the water from Singapore, is experiencing an explosive growth in data center investment due to its relatively abundant land resources, more competitive energy costs, and proximity to major financial and technology hubs in Asia.

According to the US-ASEAN Business Council, Johor has been identified as the fastest-growing data center market in Southeast Asia, with a planned investment commitment of up to RM147 billion. Recently, Singaporean company Empyrion Digital also announced the launch of a super large scale park construction exceeding 200 megawatts in Nusa, Johor, with the first phase aiming to be put into operation by the end of 2026. The joint venture between Singtel and Malaysia Telecom TM also plans to establish an AI data center in Johor that can scale up to 200 megawatts.

Behind this trend is the spillover effect of Singapore's land and energy bottlenecks. An executive from Nxera, a subsidiary of Singapore Telecom, bluntly stated that developing data centers near Singapore can effectively capture customers' overflow demands. Many newly built data centers in Johor will offer low latency cross-border connections with Singapore as their core selling point, thereby building themselves as strategic extensions of Singapore's digital ecosystem.

Strategic bets to meet future demands

Unlike previous data centers, Racks Central explicitly positions the new facility as an "AI ready infrastructure". This term reveals a key trend: Southeast Asia is accelerating its transformation from a traditional cloud service market to a hub that carries the demands of next-generation AI computing.

This transformation means higher demands are placed on the forefront of data center design. For example, Empyrion Digital's campus in Johor will adopt advanced liquid and air cooling technologies, and set an industry-leading power efficiency target of 1.3 to 1.4. At the same time, green energy is becoming a standard feature of projects, and many developers are responding to the growing sustainability requirements by signing long-term power purchase agreements and other means. The data center of Malaysian local giant Yang Zhongli Power has achieved a power utilization efficiency of 1.3, which is better than the industry average.

Opportunities and challenges under the influence of giants

The addition of Racks Central has intensified the competition in the already hot Johor computing arena. There are not only local conglomerates such as Yang Zhongli Power's $2.4 billion data center partnership with Nvidia, but also regional telecommunications giants such as Singapore Telecom's joint venture with TM, as well as professional operators like Empire Digital.

Behind fierce competition lies enormous market potential. According to analysis, by 2028, the demand for data centers in Southeast Asia is expected to climb rapidly at a compound annual growth rate of 20%, forming a considerable market worth up to $11 billion. Forbes' analysis also points out that global tech giants including Amazon, Google, and Microsoft are expected to invest $240 billion in the Asia Pacific region over the next five years to expand their large-scale businesses.

However, challenges cannot be ignored either. A stable and sufficient power supply is the lifeline of all data centers. The ultra-high power density brought by AI computing has put unprecedented pressure on the power grid and cooling system. In addition, the diversified regulatory environment, complex localization requirements, and persistent shortage of high-end technical talents in Southeast Asia are all obstacles that all market participants must overcome. Keywords: Southeast Asian Engineering Information Network

Racks Central pressing the start button for construction in Johor is not only a crucial step in its transformation into a regional development operator, but also a microcosm of Southeast Asia's evolution into an important node in the global AI computing power network. In the construction boom driven by technology giants and capital ambitions, this land is reshaping the global data flow and processing pattern. The construction of RCJM 1 is just the prologue. In the coming years, it will become the hottest testing ground for observing the trend of global computing power shifting eastward.Editor/Cheng Liting