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View all search resultsThe extractivist logic haunts the AI data center rush in Indonesia, Malaysia
Behind the promise of Southeast Asia’s AI revolution lies a destructive reality: an old-school scramble for power, land and minerals that is reviving fossil fuels and pushing fragile ecosystems to the brink.
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Residents of Nongsa district in Batam, Riau Islands, block access to Nongsa Digital Park during a protest on Oct. 5, 2026, over months of water shortages in their community, while water supplies to data centres in the park remain uninterrupted.
(Jakarta Post/Fadli)
S
outheast Asia is hurtling into an artificial intelligence data center boom. Yet while neighbors like Singapore and Thailand pause to reassess runaway expansion, Indonesia and Malaysia are welcoming the influx with open arms.
The race between Jakarta and Putrajaya to crown themselves the "regional AI hub", however, has been far from seamless. In Indonesia, proposed facilities in Batam and Jatiluhur have sparked fierce community resistance and prompted government-mandated suspensions over severe ecological risks.
Across the Malacca Strait, a parallel reckoning is unfolding. Penang’s Silicon Island—a massive land reclamation project designed to anchor the semiconductor supply chain amid soaring AI infrastructure demand, proceeds despite civil society challenges over its social and environmental fallout, even as Deloitte projects 1.1 trillion ringgits (US$269 billion) in economic output by 2050.
Compounding this contradiction, Malaysian Prime Minister Anwar Ibrahim acknowledged the immense strain data centers exert on national water and power grids, only to restrict projects unrelated to AI. What masquerades as a prudent moratorium is, in practice, a carve-out that selectively accelerates AI-driven expansion.
Faced with mounting backlash, mainstream commentary often frames this boom as an unavoidable tide, arguing that governments merely need stronger guardrails rather than a halt. This logic was recently captured in an opinion piece in The Jakarta Post arguing that "Indonesia’s AI data center ambition needs a resource rule book".
While robust technical standards are undeniably necessary to curb localized devastation, regulatory tinkering evades the fundamental question: should the region embrace this digital gold rush in the first place?
This skepticism is not a reflexive rejection of technological progress. Rather, it confronts a reality obscured by tech evangelism: at its core, AI development is an old story of raw material extractivism.
