Reported by The Guardian
Power and water constraints are pressuring what seemed like a juggernaut of growth for the region just months ago
I n early 2026, Thailand’s datacentre industry was on a roll. The country’s board of investment had recently announced approval of datacentre projects from Tiktok, a UAE-based Skyline datacentre and Singapore’s Bridge datacentres, totalling a planned investment of $27bn.
As the year has passed, however, what once seemed like a new industrial juggernaut has ground to a halt. Thailand paused construction on 49 projects and approval decisions on 117 more in September 2026, amidst growing concern about the lack of sufficient details for regulation and monitoring. It is not alone in reconsidering datacentre projects. In neighbouring Indonesia, the governor of the country’s most populous province of West Java halted construction on a datacentre due to lack of permits and an incomplete environmental assessment process.
More from the original report
With the global rise of AI usage driving an increased demand for datacentres, south-east Asia has emerged as a surprise centre of growth in the Asia Pacific region. While China has the largest operational datacentre capacity in the region, a 2026 report by real estate firm Cushman and Wakefield shows that south-east Asia has the largest share of under-construction datacentre capacity in Asia Pacific, about 50% of the total. Malaysia and Thailand comprise a large portion of that capacity.
Through the 2010s, Singapore was south-east Asia’s leading datacentre hub, with companies like Alibaba and Facebook opening facilities there. However, the city-state implemented a moratorium on new datacentres from 2019 to 2022 because they were “intensive users of water and electricity”, as described in a press release from the Ministry of Energy, Trade and Industry. Since then, approval has been selective amidst land constraints and sustainability requirements, with just 95MW of operational capacity added between 2023 and 2026, per Cushman and Wakefield .
With the advent of LLMs and rise in usage of AI, associated datacentre demand has surged in the last half decade, and desperate companies looked beyond Singapore to build datacentres. Malaysia has been a major beneficiary, with operational capacity in the southern state of Johor…