DEEP SOURCE Launches 67 MW AI Data Center in Malaysia, Secures 10-Year Colocation Deal and $221 Million Construction Contract

DEEP SOURCE (00990) has announced significant progress in its artificial intelligence infrastructure business, unveiling a 67 MW AI data center project in Penang, Malaysia, alongside a ten-year colocation agreement and a US$221.1 million construction contract. The move marks a major milestone in the company's strategic transformation toward AI-driven digital infrastructure and underscores the accelerating momentum of Southeast Asia's computing capacity buildout.

The company disclosed that a subsidiary entered into a master data center colocation service agreement on October 2 with an independent third-party customer covering the project's full planned IT capacity of 67 MW. The agreement carries an initial term of ten years, commencing after the facility passes agreed acceptance and enters the service phase. Under the terms, the customer is required to pay the full monthly recurring service fee based on the agreed capacity regardless of actual usage, while electricity charges are settled separately based on metered consumption. Due to commercial confidentiality arrangements, the company did not disclose the customer's identity or the contract value. The structure of the agreement — with payment obligations tied to reserved capacity rather than actual consumption — signals strong mutual confidence in the durability of computing power demand across Southeast Asia.

In parallel with the demand-side contracting, construction planning is advancing rapidly. The company has entered into a letter of intent for construction works with Longmotive DC Solutions Pte. Ltd., a well-known data center engineering firm in Southeast Asia, appointing the contractor to handle the project's main building and mechanical and electrical engineering. The scope of works encompasses civil and structural engineering, mechanical and electrical systems, supply and installation of designated equipment, infrastructure works, testing and commissioning, as well as related construction design and coordination. The total lump-sum price for the listed scope is US$221.1 million. The letter of intent authorized Longmotive to commence preliminary and advance works — including site mobilization, construction planning, procurement, document submission for approval, and site preparation — from October 1.

According to the disclosed construction schedule, the 67 MW of planned IT capacity will be completed in phases. The first 26 MW portion is scheduled for completion by March 31, 2027, with a 15-day grace period, while the remaining 41 MW is targeted for completion by June 30, 2027.

The Penang project represents the culmination of a swift strategic pivot by DEEP SOURCE over the past six months. In May 2026, the company explicitly stated in an announcement that it would expand its business around AI infrastructure-related industrial applications. In its 2026 interim report, it further elaborated on its transformation plan and confirmed that planning and implementation work had commenced. On September 7, the company's first AI data center project received approval from Malaysia's Ministry of Investment, Trade and Industry. By early October, the company had finalized the Penang project site and secured both a long-term contract customer and a construction contractor.

The transformation reflects broader industry dynamics across Southeast Asia, where competition among Chinese and American technology giants is turning the region into a strategic high ground for AI and cloud computing. A McKinsey report titled "Artificial Intelligence in Southeast Asia: An Era of Opportunity," published in the first half of 2026, noted that Google, Amazon, and Microsoft alone have committed to invest more than US$10 billion in AI infrastructure-related amounts in Malaysia. Meanwhile, Cushman & Wakefield's recently released Asia-Pacific data center report shows that in Johor, one of Malaysia's largest data center clusters, operational capacity stands at approximately 897 MW, with a colocation vacancy rate of just 0.7% — a figure that underscores the acute supply-demand imbalance driving new capacity announcements across the region.