Digital infrastructure is no longer a background utility but a core strategic asset, as rising AI adoption, tighter regulation and growing ESG expectations redraw the global data centre landscape. According to Equinix Malaysia Managing Director Cheam Tat Inn, competitiveness in 2026 will increasingly be defined by power density, resilience, data sovereignty and sustainability.

Speaking on Equinix’s outlook for digital infrastructure, Cheam said enterprises and governments can no longer treat data centres as passive cost centres. As artificial intelligence workloads scale rapidly, and regulators place greater scrutiny on uptime, security and environmental performance, the physical foundations of the digital economy are becoming just as critical as software and cloud strategy.

AI pushes infrastructure to its limits

One of the most immediate pressures, Cheam noted, is power density. AI workloads, particularly in regulated sectors such as financial services, demand far higher rack densities and more advanced cooling solutions than traditional IT environments.

Without infrastructure that can support higher power per rack and technologies such as liquid cooling, even the most advanced AI models risk becoming operational bottlenecks. As Malaysian banks and enterprises accelerate AI deployment, existing data centre capacity limits are increasingly forcing near-term infrastructure upgrades rather than long-term planning.

Resilience becomes a regulatory baseline

Beyond capacity, operational resilience has shifted from a differentiator to a minimum requirement. Cheam highlighted that customer tolerance for downtime has fallen close to zero, while regulators are formalising expectations around continuity and uptime.

In Malaysia, guidelines from Bank Negara have embedded resilience into risk management and business continuity requirements, particularly for financial institutions. Similar expectations are now extending beyond banking into broader national digital and cybersecurity frameworks, raising the bar across multiple industries.

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Data sovereignty shapes AI deployment

Data sovereignty is emerging as another defining constraint, especially as AI use cases expand in healthcare, life sciences and other regulated fields. Cheam said governments increasingly require sensitive and AI-generated data to remain within national borders, even as organisations pursue global collaboration.

Equinix’s model, he explained, allows enterprises to host infrastructure locally in Malaysia while maintaining secure, private interconnections to global networks. This enables collaboration and insight-sharing without moving regulated data offshore, an increasingly critical balance as cross-border AI use grows.

From centralised training to distributed inference

Cheam also pointed to a structural shift in AI architecture. While large, centralised training models will remain important, more inference and decision-making is moving closer to where data is generated.

This trend supports distributed data centre deployment, with use cases ranging from smart cities and traffic optimisation to flood prediction and fraud detection. It also challenges concerns about overcapacity in markets such as Johor, positioning Malaysia as both a regional AI hub and a node in global digital ecosystems.

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Sustainability moves to the core

Sustainability has also moved from a reporting obligation to a strategic differentiator. Rising energy costs, climate risks and investor scrutiny mean data centres must now be designed for efficiency and resilience from the outset.

Cheam pointed to Malaysia’s policy direction under initiatives such as the National Energy Transition Roadmap and the Green Electricity Tariff as reinforcing this shift. Equinix has committed to achieving 100 percent renewable energy globally by 2030, a target that applies to its Malaysian operations as well.

Across Asia-Pacific, Equinix plans to double capacity by 2029, with Malaysia identified as a key growth market.

Infrastructure as a growth enabler

Looking ahead, Cheam said Malaysia’s ability to attract digital investment will depend on how effectively infrastructure strategies balance scale, resilience, sovereignty and sustainability.

“In 2026, resilience is the floor, not the ceiling,” he said. “The organisations and economies that get digital infrastructure right will shape the next phase of growth.”

The message is clear: as AI, regulation and ESG converge, digital infrastructure is no longer just about keeping systems online. It is becoming a central pillar of economic competitiveness and long-term resilience.

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