Nokia's Strategic Expansion in Malaysia's AI-Driven Data Center Market

Nokia’s recent partnership with Extreme Broadband (EBB) and its subsidiary Open DC marks a pivotal step in the company’s global strategy to capitalize on the AI-driven data center boom. By deploying its IP network solution across six AI-optimized data centers in Malaysia—strategically located in Cyberjaya, Johor Bahru, Penang, and Kedah—Nokia is directly addressing the surging demand for secure, high-performance infrastructure in the banking and financial sectors [1]. This collaboration extends beyond traditional connectivity, with Nokia committing to co-develop quantum-safe networks and multi-cloud solutions, positioning Malaysia as a regional hub for next-generation digital infrastructure [3].

The long-term growth potential of this market is underscored by Malaysia’s aggressive digital economy policies. The National Cloud Computing Policy, coupled with the Twelfth Malaysia Plan, aims to attract $15 billion in investments for cloud computing and AI innovation by 2030 [4]. Hyperscale players like Microsoft and Currence Group are already accelerating this shift, with Microsoft launching its first hyperscale cloud region in Malaysia (Malaysia West) in Q2 2025 and Currence Group planning a 500MW AI data center in Johor [5]. These developments align with a projected market size expansion from $4.04 billion in 2024 to $13.57 billion by 2030, driven by a 22.38% compound annual growth rate (CAGR) [3].

Geopolitical tailwinds further bolster this trajectory. As global trade tensions and cybersecurity concerns intensify, Malaysia’s focus on locally controlled, secure infrastructure has become a strategic advantage. The Cyber Security Act 2024, which mandates stringent risk assessments and incident reporting for National Critical Information Infrastructure (NCII) sectors, has elevated the demand for solutions like Nokia’s Data Center Gateway and Event-Driven Automation (EDA) tools, which enhance scalability and resilience [6]. Additionally, Malaysia’s strategic location as a gateway to Southeast Asia—combined with its recent Johor-Singapore Special Economic Zone (JS-SEZ) offering a 5% corporate tax rate—has made it a magnet for cross-border investments [5].

However, challenges persist. Rising energy costs and water scarcity, particularly in Johor, threaten to disrupt operations. Data centers in the region require over 1,500 megawatts of capacity by 2025, straining existing water infrastructure [5]. To mitigate this, the government is pushing for sustainable practices, including desalination and reclaimed water usage, while Nokia’s energy-efficient cooling technologies and EDA tools are critical for maintaining operational viability [3].

For investors, Nokia’s deep integration into Malaysia’s AI ecosystem—through both technological innovation and policy alignment—presents a compelling case. The company’s focus on quantum-safe networks and multi-cloud solutions not only addresses immediate security demands but also future-proofs its offerings against evolving threats. Meanwhile, Malaysia’s regulatory framework, though still maturing, is rapidly adapting to support sustainable growth, as evidenced by the October 2025 data center framework and MIDA’s role in streamlining approvals [1].

In conclusion, Nokia’s strategic expansion in Malaysia is not merely a regional play but a calculated move to leverage a market poised for exponential growth. By aligning with Malaysia’s digital sovereignty ambitions and addressing sustainability challenges head-on, Nokia is well-positioned to capture a significant share of a market that could reach $13.57 billion by 2030. For stakeholders, this represents a rare intersection of technological leadership, geopolitical tailwinds, and policy-driven momentum.

Source:
[1] Nokia Partners With Extreme Broadband To Upgrade AI Data Centers Across Malaysia [https://www.nasdaq.com/articles/nokia-partners-extreme-broadband-upgrade-ai-data-centers-across-malaysia]
[2] Malaysia to Establish Data Centre Framework to Streamline Policies [https://www.reuters.com/markets/emerging/malaysia-establish-data-centre-framework-streamline-policies-2025-07-22/]
[3] Nokia Partners Extreme Broadband to Future-Proof Data Centers [https://www.crnasia.com/news/2025/data-center/nokia-partners-extreme-broadband-to-future-proof-data-center]
[4] Malaysia Data Center Market Analysis 2025-2030 [https://finance.yahoo.com/news/malaysia-data-center-market-analysis-110300214.html]
[5] Malaysia's $15B AI Revolution Powers Southeast Asian Future [https://introl.com/blog/malaysia-ai-infrastructure-15-billion-investments]
[6] Malaysia's Cyber Security Act 2024: Key Insights and Implications [https://dataclassification.fortra.com/blog/malaysias-cyber-security-act-2024-key-insights-and-implications-organizations]