16/07/2026

BIZ & FINANCE THURSDAY | JULY 16, 2026

READ OUR

HERE

15

Malaysian Paper

/thesun

Digital curbs could cost Malaysia RM792m in VC

SSDU, EER Digital to explore green data centre KUALA LUMPUR: Smart Selangor Delivery Unit (SSDU Innovations Sdn Bhd) has inked a memorandum of collaboration (MoC) with EER Digital Sdn Bhd to explore a Sustainable Data Centre pilot project for Selangor to bolster the state’s push for sustainable artificial intelligence (AI) infrastructure. In a statement, SSDU said the MoC was signed on the sidelines of the AIBP Conference & Exhibition Malaysia 2026, held recently. The event gathered corporate, government and tech leaders to tackle digital transformation, AI adoption, cybersecurity, and innovations grounded in environmental, social, and governance (ESG) principles. The collaboration, SSDU added, also marks its first foray into high-density AI infrastructure, including graphics processing unit (GPU) immersion cooling technology. SSDU CEO Gaddafi Musli said the partnership represents Selangor’s first step to study how high-density AI infrastructure can be developed responsibly, with sustainability, governance and public value built in from the ground up. “SSDU’s role is to coordinate, assess, and bring together the right stakeholders so Selangor can make the best decisions moving forward,“ he said in the statement. According to the statement, both parties will use the MoC to examine the feasibility, technical requirements, sustainability metrics, and governance framework for the pilot project, which aims to support AI ready computing infrastructure while curbing the environmental footprint typically linked to high-density data centres. The pilot will assess how well immersion cooling technology can handle GPU intensive AI workloads, with particular attention to energy efficiency, water usage, space constraints, safety, operational readiness, cybersecurity, public sector applications and long-term scalability. A joint technical working group is expected to be set up to develop a project action plan. However, SSDU emphasised that the MoC is purely exploratory and does not signal any commitment to full-scale implementation or procurement awards. – Bernama

PETALING JAYA: Findings from a newly released Oxford Economics study, commissioned by Digital Prosperity Asia (DPA), reveal that digital regulations have increasingly become a structural force in Malaysia’s startup ecosystem, shaping how startups manage compliance, allocate talent, invest in innovation, and access capital. The study finds that Malaysia currently adopts a broadly enabling approach to digital regulation, with safeguards in higher-risk domains while preserving openness across the broader digital economy. However, regulatory design choices over the coming decade could have significant implications for Malaysia’s startup ecosystem. “The study highlights how regulations influence decisions across Malaysia’s startup ecosystem,” said Oxford Economics economic consulting managing director Henry Worthington. “Startups face immediate pressures as they navigate compliance across a broad range of digital regulations. Meeting these requirements often demands specialised talent and changes to operating models, diverting resources from innovation and growth. Investors also consider a startup’s ability to meet regulatory obligations when making investment decisions. The implication is not that safeguards should be weakened, but that regulatory design, proportionality, and predictability will be critical to sustaining Malaysia’s startup momentum.” For many Malaysian startups, compliance is no longer a one-off adjustment. It is becoming embedded in day-to-day operations, requiring startups to reorganise internal processes, invest in compliance capabilities, and shift resources away from other business priorities. Startups are making structural adjustments in response, with over two-thirds (68%) having taken active steps to respond to digital regulatory requirements. This includes building new compliance processes, shifting workloads to compliant cloud service providers, and engaging external legal and advisory services. Key insights include 88% of startups in Malaysia report operational constraints from digital regulations, with 23% describing the impact as major or severe; 81% of startups say

o Oxford Economics warns stricter regulations could threaten venture capital funding, while startups face rising compliance costs and delayed innovation

growth, and digital regulations are becoming an increasingly important consideration in investment decision-making in Malaysia. Expectations of tighter regulation may also dampen investment sentiment. Under a more restrictive regulatory scenario, the share of startups expecting increased investment falls from 47% to 27%. In response, investors are adopting more cautious approaches, including strengthening compliance requirements and incorporating regulatory risk assessments into their investment processes. Key insights include 63% of startups say digital regulations increase uncertainty in the market and make it more difficult to raise capital; 73% of VCs say digital regulations heighten uncertainty around returns from their investments; economic modelling shows that more restrictive regulations in Malaysia could reduce VC funding by 26% over 2026 to 2035 (~RM792 million/year less on average). Conversely, a shift to more enabling regulations would increase VC funding by 6% (~RM198 million/year more on average) over the same period. “Malaysia has made important progress in building a digital economy that supports innovation, and its relatively enabling regulatory approach is an important asset for startups,” said Koh Liang Wei from the DPA Secretariat. “As Malaysia’s rules on data, cybersecurity and AI continue to evolve, the priority should be to preserve that balance. For SMEs and startups, clear, coherent and consultative regulation is not just a policy preference. It shapes whether limited resources go into compliance, or into hiring, product development and regional expansion. DPA looks forward to supporting constructive dialogue between policymakers and the startup ecosystem to ensure regulations safeguard trust while enabling growth.”

digital regulations increase compliance-related costs. Slightly over eight in 10 startups allocate more than 5% of their operating costs to compliance, while 39% of these firms devote more than 15% of operating costs to compliance; 68% of startups have taken steps to respond to digital regulatory requirements including building new compliance processes, shifting workloads to compliant cloud service providers, and engaging external legal and advisory services. Digital regulations are significantly affecting how Malaysian startups allocate financial, technical, and human resources. Many startups report that compliance requirements are affecting workforce planning and increasing talent-related costs, particularly due to growing demand for expertise in compliance, cybersecurity, and data governance. These pressures are also affecting innovation activity. Startups indicate that digital regulations are influencing innovation efforts, with financial resources increasingly being directed towards compliance-related activities rather than research and development. As a result, some startups are experiencing slower innovation cycles, delays in product development, and longer time-to market. Key insights include 87% of startups in Malaysia report that digital regulations have affected workforce costs or management; 74% of startups report rising human capital costs, particularly for compliance, cybersecurity, and data governance expertise; 67% of startups indicate that financial resources are being diverted from R&D towards compliance, a trend also observed by 64% of both VCs and incubators and 57% of startups report delays in product development or longer time-to market, while 59% of VCs note a slowdown in innovation momentum. Access to capital remains critical for startup

PGB eyes RM127.3m Sedenak deal for JS-SEZ industrial park JOHOR BAHRU: Main Market-listed property developer Paragon Globe Bhd (PGB) has proposed an acquisition of undivided beneficial interests RM1.26 billion, delivering an estimated gross development profit of approximately RM430 million over the development period.

monetised selected land where the value and timing were right. We are now rebuilding our pipeline in another Johor growth corridor. The Sedenak acquisition gives us a substantial position within the Kulai-Sedenak JS SEZ zone. It allows us to evaluate a larger industrial development and phase it carefully, based on approvals and actual market demand. This is not an immediate profit exercise. It is about securing the right land, managing our capital carefully and preparing PGB for its next stage of growth.” The proposed acquisition will be funded through a strategic combination of bank borrowings and internally generated funds. The proposed acquisition remains subject to PGB shareholders’approval at an extraordinary general meeting to be convened, and subject to the satisfaction of all contractual conditions, completion is targeted for the second half of 2027.

Concurrently, the proposed workers’ hostel component will comprise 360 units with an estimated capacity of up to 5,400 workers. The proposed transaction will be undertaken by PGB Gardens Sdn Bhd, a wholly owned subsidiary of PGB, which has entered into 29 conditional sale and purchase agreements with 35 beneficial owners of the relevant interests. Separately, PGB Gardens completed an initial acquisition on July 8 involving beneficial interests representing about 980,100 sq ft for a cash consideration of RM13.86 million, fully funded through internally generated funds. Upon completion of both exercises, PGB will control an aggregate 841/1000 share of the total beneficial interests in the Sedenak master land. PGB executive chairman Datuk Seri Edwin Tan Pei Seng said: “We have

representing about 8.52 million sq ft within a 256.7 acres freehold master land in Sedenak, Kulai, Johor. The total cash consideration for the strategic stake stands at RM127.28 million. Subject to land conversion and applicable development approvals, PGB intends to transform the land areas attributable to its interests into a high yield industrial park comprising factory units, commercial components, and a workers’ hostel, with the project targeting GreenRE Gold certification as part of its commitment to sustainable development. Based on the group’s preliminary development concept, the industrial and commercial components are projected to carry an estimated GDV of about RM1.69 billion against estimated Gross Development Costs (GDC) of

The proposed development will feature industrial factories, commercial components and a 5,400-worker hostel, with the project targeting GreenRE Gold certification. – PGB WEBSITE