For many years, Malaysia’s palm oil goliaths have shouldered a hefty load of disapproval and blame. They were held responsible for demolishing tropical rainforests, driving deadly fog, and forcing orangutans to the edge of annihilation. But according to a recent story from Bloomberg, these same companies are stepping into an entirely different arena—one that seems almost ironic: powering the nation’s booming AI and data center industry.
Firms like SD Guthrie, Kuala Lumpur Kepong (KLK), and IOI Corporation are trying to shed their old image, presenting themselves as providers of land and green energy to feed the digital revolution in Southeast Asia. They’re repurposing vast plantations into industrial parks dotted with solar farms and data centers, marrying the old world of agriculture with the high-tech world of AI.
The math is simple and compelling. Data centers consume enormous amounts of electricity and require sprawling plots of land. By 2035, Malaysia’s centers could demand five gigawatts of power—enough energy to light up a city the size of Miami. And since palm oil companies control more private land than anyone else in the country, they are uniquely positioned to step in.
Malaysia’s data center boom: A land and power race
Malaysia has become a magnet for data center investment. Last year, it recorded the fastest growth in the Asia-Pacific region, with around 40% of all planned capacity in Southeast Asia destined for its soil, according to DC Byte. Tech giants are betting big: Google has pledged $2 billion, Microsoft $2.2 billion, and Amazon a staggering $6.2 billion. The government’s goal? 81 data centers by 2035.
Much of this boom is a spillover from Singapore, where restrictions on new centers have pushed companies just across the causeway to Johor. Today, cranes and construction sites dominate the skyline, with server farms for Nvidia, ByteDance, and Singapore Telecommunications rising rapidly.
Yet, the rush is stretching the region’s infrastructure. At Sedenak Tech Park, for instance, potential tenants have been told to wait until late 2026 for promised water and electricity hookups. With vacancy rates hovering at just 1.1%, the imbalance between supply and demand is stark—creating a golden opportunity for palm oil companies to fill the gap.
Palm oil’s solar gamble
SD Guthrie, the world’s largest palm oil planter by acreage, is leading the charge into this new era. The company has earmarked 10,000 hectares to develop industrial parks and solar farms near data center hubs. Their ambitious target: one gigawatt of solar capacity within three years, enough to power up to ten hyperscale AI data centers. By the end of the decade, this venture could account for a third of the company’s profits.
Rivals are following suit. KLK has launched KLK TechPark, anchored by China’s electric car giant BYD, with plans for a second, even larger park in Johor. IOI Corporation is exploring solar projects on older or low-yield palm plots. Together, these three giants control nearly three-quarters of Malaysia’s private land banks—a unique combination of scale, location, and renewable energy potential. Analysts say solar ventures could yield more than 50 times the profit of traditional palm oil cultivation, making the move as financially smart as it is strategic.
Green hopes or greenwashing?
Malaysia’s tropical heat makes cooling data centers energy-intensive, and choosing the wrong location could turn sprawling parks into costly mistakes. Environmental groups remain wary, arguing that these solar projects, while helpful on paper, do little to fix the deeper problems of palm oil production—deforestation, peatland damage, and labor issues.
“True credibility comes from reforming core practices, not adding side projects,” says Greenpeace Malaysia. Analysts note that while renewable energy may shrink carbon footprints and generate profit, palm oil will remain central to these companies’ business models.
Still, executives like SD Guthrie’s Mohamad Helmy Othman Basha remain hopeful. According to Basha, palm oil has been demonized for the longest time. Now it can play a role in renewable energy. Whether this pivot marks a genuine green transformation—or a clever sidestep—remains to be seen.
