DPS Resources and Alibaba Affiliate Explore Data Center Development in Malaysia's Melaka
May 5, 2026
DPS Resources and Alibaba Affiliate Explore Data Center Development in Malaysia's Melaka
A Malaysian investment holding company and an affiliate of Chinese tech giant Alibaba have signed a preliminary agreement to explore the development of large-scale data centers in Melaka, a coastal state on Malaysia's southwestern peninsula. The move signals growing interest in expanding the country's digital infrastructure beyond its traditional hubs.
DPS Energy, a subsidiary of DPS Resources, and Hangzhou Xinfengwei Network, an Alibaba-linked joint venture, announced last Wednesday that they had signed a memorandum of understanding to assess the feasibility of building data centers in the region. According to the companies, the proposed project could deliver between 150 megawatts and 180 megawatts of capacity, with an estimated development cost of $7.5 million per megawatt. Based on these figures, the total investment could range from approximately $1.1 billion to $1.35 billion.
Under the terms of the MoU, DPS Energy would be responsible for managing the data center and providing land, power, and supporting infrastructure, while Hangzhou Xinfengwei would handle day-to-day operations and business management. It is important to note that memoranda of understanding are not legally binding commitments and typically serve as a framework for further negotiation.
DPS Resources is a diversified Malaysian conglomerate with interests spanning construction, building materials manufacturing, property development, and hotel management. Its subsidiary DPS Energy focuses on energy production and battery storage. Hangzhou Xinfengwei Network, on the other hand, is a joint venture between Alibaba and Xinfengwei, an AI cloud provider, positioning the partnership at the intersection of cloud computing and energy infrastructure.
The potential development in Melaka is notable because most of Malaysia's data center capacity is currently concentrated around Kuala Lumpur, the capital, and Johor, the country's southernmost peninsular state. Expanding into Melaka could help diversify the geographic distribution of data centers in Malaysia, potentially easing pressure on existing infrastructure and opening new opportunities for regional economic growth. As demand for cloud services and AI-driven applications continues to surge across Southeast Asia, such projects are increasingly seen as critical to supporting digital transformation in the region.
Source: datacenterdynamics
