China’s DeepSeek has officially joined the AI chat scene, aiming to challenge the dominance of the US’s ChatGPT.
Even with the competition heating up, DeepSeek’s arrival has quietly sparked some concerns about the long-term viability of Malaysia’s data centre expansion.
However, these worries are now transforming into enthusiasm as the landscape becomes more defined.
Recent analysis from Kashif Ansari, Co-Founder and Group CEO of Juwai IQI, indicates that Malaysia’s data centre expansion is set to gain substantial momentum from the latest advancements in AI technology.
Mr. Ansari states, “DeepSeek shocked the world with a large language model that seems comparable to those offered by competitors like OpenAI—at a fraction of the cost.”
He then continues explaining that affordable AI solutions like DeepSeek’s are expected to greatly increase the demand for data centres in Malaysia.
The reduced costs associated with AI make it easier for businesses to adopt AI-driven tools, which were previously limited by high expenses. A survey conducted in late last year revealed that financial limitations were the primary obstacle for companies looking to embrace AI.
As LLMs become more affordable, the number of AI-driven applications is set to soar, leading to an unprecedented demand for data centres.
Supporting this perspective, Morgan Stanley anticipates a 4% rise in power demand across the Asia-Pacific region (excluding China) if tech firms increase their investments in response to AI’s lower energy requirements.
“For Malaysia’s real estate market, this means a consistent and possibly increasing demand for land suitable for data centre development.”
While not every data centre is prepared to meet the changing needs of AI, Malaysia is well-positioned with its strategic advantages.
“Data centres originally built for enterprise IT, cloud computing, and general-purpose workloads often lack the power, cooling, and networking infrastructure needed for AI,” Mr. Ansari noted.
“Malaysia, however, has billions of dollars in planned AI-ready data centres. Government initiatives and major investments from companies like Nvidia, ByteDance, Google, AWS, and Microsoft ensure this.”
Despite many believed Malaysia would need billions of dollars to develop its own language model. However, DeepSeek claims to have achieved this for under $10 million.
At that price, Malaysia could afford to develop its own language models, integrating AI into research, education, and the broader economy.
Malaysian consumers will also benefit as AI becomes an integral part of everyday services.
Juwai IQI was featured in The Exchange Today.
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