How much is Malaysia in demand for artificial intelligence servers?

KUALA LUMPUR: The Growth of the Data Centre Industry which will see its power needs balloon from 990 megawatts (MW) to 1,4000 MW by 2029, enormous strain on the national grid and Water supplies, provided in Johor, according to Public Investment Bank Bhd (PublicInvest).

This is especially when Tenaga Nasional Bhd (TNB) has already received applications for potential energy demand of 2,000 MW from 10 data centres.

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The report said that data center electricity demand will reach 14,000 MW by 2029. Then we can roughly estimate how many AI servers will be needed in these five years.

Assumptions:

1) AI data centers account for 60% of electricity demand, while traditional data centers account for the remaining 40%.

2) AI servers consume 80% of the total electricity requirements of each AI data center.

3) Using the Nvidia HGX H100 8GPU AI server as standard, each AI server requires 5.6 kW.

So the number of potential AI servers in five years would be 14,000,000 x 60% x 80%/5.60 = 1050,000

Let's say Natgate again:

1) I only got the one1%order.

2) Each one is sold for MYR1 million. (The current retail price on the market is about MYR1.5 million)

3) Net profit 10%.

So the potential average annual net profit = 1,050,000/5 x 1% x 1,000,000 x 10% = RM210,000,000

You read that right! My most conservative estimate is that just an AI server order from China alone can earn an average annual net profit of RM200mil!

Assuming that there is no growth in other businesses such as optical modules and Bitcoin mining machines that need to be used in data centers, resulting in a net profit of only RM100 mil, then the total annual net profit is also about 300 mil. If the valuation is only PE=30, then the company's market value is 9,000 miles. In other words, with today's market capitalization of 4770 mils, there is at least room to double!!

It's rare that global technology stocks are currently experiencing a small stock market crisis. Friends who haven't gotten on the bus should seize the opportunity if they want to get on the bus. Hands are quick, hands are slow...