After the public backlash due to the implementation of the public domain name system (DNS) redirection over the weekend, Communications Minister Fahmi Fadzil decided to make a U-turn by asking MCMC to call it off for the time being. While the internet rejoiced, it may have had a domino effect in Malaysia.
According to an industry source, Malaysiakini reported that the initiative by the government might have caused global technology companies to reconsider their approach and plans to invest further in Malaysia. This is due to the recent U-turn by the government, which indicated "instability and a lack of coherent direction in the government’s decision-making".
The source also added that some companies are already thinking of contingency plans for future investments in Malaysia. This includes redirecting their data centre investment out of Malaysia and may choose Thailand or Indonesia instead. In addition, affected companies are also reviewing their workforce, just in case they aren't required anymore if the redirect investments happen.
In case you didn't know, Johor is a hotspot as 14 data centres are in operation. One of the centres belongs to TikTok, through ByteDance System Sdn Bhd, in Sedenak Tech Park in Kulai. And just this year, Google announced it will invest around ~RM9.4 billion in its first-ever Google Data Centre and Google Cloud Region, whereas Microsoft will invest ~RM10.5 billion into cloud and AI in Malaysia.
For now, the affected companies are keeping it cool in honouring their existing commitments. But should something like the DNS redirection debacle happen again, these companies could redirect their investments elsewhere.
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