Tengku Zafrul says AI advancements like DeepSeek a boon, not bane, to growing Malaysia’s data centre

KUALA LUMPUR, Feb 6 — The rise of new advancements in artificial intelligence (AI) platforms, such as China’s DeepSeek, won’t jeopardise Malaysia’s data centre industry, Investment, Trade, and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz said today.

Instead, such advancements could even boost demand for them locally, he said.

“Advancements in AI, such as DeepSeek and Qwen, can actually drive demand for data centres. DeepSeek, for instance, is seen as a disruptive player, offering high-capability AI models at lower costs while consuming less energy compared to current AI systems.

“Although more efficient AI reduces the need for large data centres, the lower cost of AI is expected to increase the widespread adoption of AI technology, which in turn will drive greater demand for data centre services,” he said during Question Time in the Dewan Rakyat.

Tengku Zafrul was responding to Tanjung Piai MP Datuk Seri Wee Jeck Seng who asked if more efficient AI systems, such as DeepSeek, could impact foreign investments in Malaysia’s data centre industry.

Malaysia is rapidly becoming one of the most sought-after destinations for data centres, with tech giants such as Google, Nvidia, and Microsoft investing billions into the country to establish cutting-edge digital infrastructure.

Last month, China’s DeepSeek launched its R1 chatbot, claiming it matches the capacity of artificial intelligence pace-setters in the US at a fraction of the cost. 

This has raised questions globally about the necessity of advanced semiconductors and expensive microchips.