In a Facebook post, the former three-term Klang MP questioned whether the government was regulating data centres based on their actual water and electricity use.
“If resource strain is the real concern, approvals should be based on measurable efficiency metrics, such as water usage effectiveness (WUE), power usage effectiveness (PUE), renewable energy share, and use of reclaimed versus potable water – not just whether the project carries an AI label,” he said.
“’AI vs non-AI’ is not a resource metric.”
His remarks come in the wake of Prime Minister Anwar Ibrahim’s announcement in the Dewan Rakyat on Tuesday that Malaysia has frozen new data centre investments unrelated to AI.
Anwar said the move was intended to safeguard electricity and water capacity amid a surge of data centre developments in the country, reported The Edge Malaysia.
AI data centres are typically more energy- and water-intensive compared with conventional data centres
The prime minister was reported to have said that AI-driven data centres are approved if they provide “high-tech” benefits, while non-AI centres that rely on cheaper utilities without technological advancement have been stopped.
Anwar stressed that current energy and water capacity is sufficient for the next one to two years, with longer-term energy solutions – including regional energy connectivity initiatives – being explored to ensure the sustainable growth of AI infrastructure.
In his Facebook post, Santiago questioned whether AI data centres benefit Malaysians by fostering local AI companies, creating skilled jobs, and developing domestic technology.
“The real question is whether these centres deliver meaningful local innovation, technology transfer, and productivity gains – not just hosting generic AI workloads or content generation,” he said.
“AI data centres should not be justified solely on the basis that they power AI workloads.”
Last February, then-SPAN chairman Santiago said less than 18% of local data centres’ applications for water were approved last year because of concerns over insufficient resources.
Santiago said the 72 data centres in Johor, 27 in Selangor, and two in Negeri Sembilan had requested 808 million litres per day (MLD), but only 142.06 MLD were approved.