For the past several years, Malaysia has run one of the most successful economic development plays in Southeast Asia. 

Take cheap land, cheap power, and a welcoming regulatory posture, and turn it into a magnet for the world’s hyperscalers. It worked. Johor, in particular, absorbed a huge share of the capacity that fled Singapore during that city state’s building freeze earlier this decade, and the state is now positioning itself for a massive multiplication of its data center footprint in the years ahead.

But a strategy built on being the easy, low-friction option was always going to have a shelf life. That shelf life appears to be ending now, and the industry has only itself to blame.

From “build it” to “prove it”

The shift in tone is unmistakable. Where the pitch to hyperscalers used to begin and end with cost and speed, officials and executives on the ground now describe a more demanding conversation, one about where the electricity comes from, whether it’s renewable, and whether growth is sustainable rather than merely fast. 

That’s a healthy evolution, not an obstacle. It reflects a lesson that Ireland, the Netherlands, and Singapore have already learned the hard way. Unchecked data center expansion eventually collides with the basic resource needs of the people who live nearby, and when it does, the political backlash can be swift.

Malaysia is now living that collision. In southern Johor, residents in Iskandar Puteri turned out to protest a data center complex over fears about water pressure and supply, reportedly the first protests of their kind in the country. 

Construction dust prompted a developer to fund free car washes for neighbors. And more than one resident has voiced a complaint that no amount of renewable energy financing can fully answer: the disappearance of the very greenery and landscape that made an area livable in the first place.

The numbers explain why the anxiety is rational rather than reflexive. A single 50 megawatt facility can draw as much water as roughly 2,200 households and as much power as 22,000, according to Malaysia’s central bank, and Johor alone is on track for an eightfold jump in planned capacity in the years ahead. Multiply that kind of draw across dozens of campuses in a single state, and it becomes obvious why “how will you use power” has replaced “how fast can you build” as the operative question for regulators.

The industry’s response is right, but it’s also self-interested

Give credit where it’s due. Operators building in Johor are not ignoring the pressure. Some are shifting to treated wastewater and closed-loop cooling instead of drawing on municipal supply, others are structuring renewable power agreements with the national utility, and at least one operator says solar already covers more than half its energy use at its local sites. 

Selangor, meanwhile, is pushing a more interesting idea: requiring meaningful local content in areas like chip design and cooling systems, on the theory that a state shouldn’t host capital-intensive infrastructure that delivers little economic spillover to the people living around it.

That’s the right instinct, but it’s worth being honest about why it’s happening now rather than three years ago. Developers are responding to political risk, not moral clarity. Global real estate advisers have found that community objections, alongside grid bottlenecks and equipment shortages, contributed to delays on more than half of data center projects worldwide last year. Sustainability commitments in Johor are, in no small part, a hedge against becoming the next stalled project.

Don’t let the boom simply move next door

The risk now is that stricter vetting in Malaysia doesn’t fix the underlying problem so much as export it. Industry advisers already report rising interest in alternative sites such as southern Thailand, where large campuses are reportedly moving forward with less scrutiny. 

If the region’s response to community pushback is simply to relocate the same resource-intensive model to wherever oversight is thinnest, nothing has actually improved. It’s just been outsourced to whichever government hasn’t caught up yet.

The better outcome is for stricter standards to become the regional norm rather than a Malaysia-specific speed bump: real water use limits, enforceable renewable energy requirements, and genuine local economic participation, applied consistently enough that operators can’t simply shop around for the loosest jurisdiction. 

Johor still holds real advantages, reliable infrastructure, government support, and available land, which a well-designed regulatory framework wouldn’t erase. What it would erase is the assumption, on the part of hyperscalers, that growth and community consent are separate line items rather than the same project.

The AI boom needs power, land, and water in enormous quantities, and Southeast Asia has all three to offer. But the region gets to decide the terms, and the pushback in Johor and Selangor suggests it’s finally starting to.

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Anthropic said on Thursday that it had found three cases of its AI models hacking outside organisations, days after OpenAI disclosed that its models had broken into the AI company Hugging Face in July.

The models had been built to hack and began leaving their corporate test-beds in April, according to the two companies. Neither firm noticed until last week, when OpenAI made its disclosure. Anthropic then checked its own logs. Hugging Face has published a technical timeline of the intrusion on its website, and OpenAI has committed to a full review and a technical report.

“This is the first security incident that I have felt very viscerally. I have been a little surprised that more people don’t feel it so viscerally,” OpenAI chief executive Sam Altman said on a podcast, describing his company’s hacking as “an extremely sci-fi cyber incident”.

Jeffrey Ladish, executive director of Palisade Research, a nonprofit AI lab that studies AI capabilities, said the incidents matched what safety researchers had predicted. Ladish previously helped build Anthropic’s information-security programme.

“It is a bit vindicating to see this happen in the wild,” he said, adding: “I hope our predictions stop coming true.”

The White House has completed a framework dictating which models will be subject to federal government review before they are released publicly, a White House official said. Discussions with companies about how to proceed with the voluntary testing are continuing, the official said.

AI models became noticeably better at finding bugs and passing hacking-benchmarking tests last autumn.

“These incidents will probably, in retrospect, be seen as inflection points in the ways that attackers operate,” said Joshua Saxe, chief technology officer at the AI security company Abundant Security. “It’s a really dangerous situation; these incidents really show that.”

In December, researchers at Stanford University used AI technology to show models achieving close-to-human levels of hacking on a real-world network, work that drew pushback from professional penetration testers at the time.

“At the time our results were disputed,” said Donovan Jasper, one of the researchers involved. “People said they could do better.” Jasper said the disclosures affirmed his team’s findings: “AI is getting really good at this stuff.”

Hugging Face tried to use Claude to analyse the data the OpenAI agents had generated, but the Anthropic model refused, citing safety reasons. The company used open-weight models, which can be run on systems controlled by users, to complete the analysis.

Many companies do not have the tools to analyse AI-generated attacks, said Ryan McGeehan, owner of the cybersecurity consulting firm R10N Security. “Old classic security teams that are not AI-forward are going to get left behind,” he said. Of agentic AI hackers, he said: “They go deeper, they go wider, they’re more intricate, and they’re more dense.”

The National Cyber Security Centre said in its assessment of the impact of AI on the cyber threat to 2027 that criminal use of AI is highly likely to increase by 2027, and that skilled criminals will focus on getting around safeguards on available models and on AI-enabled penetration testing tools. It has separately warned that AI-driven ransomware attacks are expected to rise.

British ministers wrote to almost 200 business leaders in April asking them to sign a cyber-resilience pledge requiring board-level responsibility for cybersecurity and Cyber Essentials certification through supply chains.

The hacks are increasing pressure on the Trump administration over the security risks posed by AI. “I’m going nuts on this issue,” said Steve Bannon, the conservative podcast host and former Trump adviser who advocates stronger AI regulation, adding that the hacks are a national-security issue and should not be treated as a business problem.

President Trump said the administration was weighing those risks against competition from Chinese developers. “We have to be careful in both ways. We don’t want to restrict them when all of a sudden we come in second to China,” he said in the Oval Office this week.

John-Clark Levin, chief research officer at Kurzweil Technologies, expects more incidents in the coming months and said guardrails should be mandatory rather than voluntary. “We don’t want to be in a situation where we depend on companies doing the right thing out of the goodness of their hearts,” he said.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

Meghan Markle rang in her 45th birthday Tuesday with a playful splash, sharing a series of black-and-white photos and a video on Instagram that showed the Duchess of Sussex leaping into a pool surrounded by birthday balloons.

The As Ever founder turned 45 on Aug. 4, marking the occasion with a carousel post that captured both the jump and its aftermath. In the images, Meghan is seen mid-air in a black one-piece swimsuit and sunglasses, arms raised as a cluster of balloons floats behind her, followed by a second shot showing the splash as she crashed into the water.

A multi-part celebration

Beyond the pool photos, Meghan’s birthday post included several additional glimpses into her celebration. One slide featured an arrangement of her signature As Ever jams alongside a candle and a bucket chilling a bottle of Champagne. Another offered a personal touch, a throwback childhood photo showing a young Meghan sitting cross-legged in what appeared to be her childhood bedroom, wearing a white turtleneck, a multicolored striped skirt and her hair styled in pigtail braids. The final slide of the post carried the caption, “A birthday worth celebrating.”

Alongside the photos, Meghan also shared a video showing her dancing during the festivities. In the caption accompanying her post, she offered a simple message of gratitude to fans. “Thank you for the birthday love,” Meghan wrote, adding a red balloon emoji.

A birthday following a notable family trip

Meghan’s birthday celebration comes just about a week after she shared a separate series of photos documenting her family’s recent trip to England, a visit that drew significant attention among royal watchers. The trip included a reunion between King Charles III and his grandchildren, Prince Archie and Princess Lilibet, whom the king reportedly had not seen in person in several years.

For that earlier post, captioned “Summer Holiday,” Meghan opened with a black-and-white photo of herself and Prince Harry sitting at a dining table, laughing over glasses of wine, with Harry’s arm resting behind her chair as she covered her face mid-laugh. The rest of the carousel showed the family’s time together during the trip, including beach days and sunset walks through grassy fields with Archie and Lilibet. One particularly striking image captured Harry tossing Lilibet into a pool, with water droplets frozen mid-air as she flipped into the water.

A relatively quiet public presence

Despite the family’s reunion with King Charles during their England trip, Meghan did not make any public appearances during that visit, keeping the reunion largely private aside from the photos she later chose to share. Her latest birthday post follows that same pattern of offering fans curated glimpses into her personal life through social media rather than public events, a approach that has become increasingly characteristic of how the Duchess of Sussex shares moments from her life with the public.

A recent turn in front of the camera Down Under

Meghan’s 45th birthday also comes during a period of increased public visibility in other areas of her career. Earlier this year, she made her debut appearance as a guest judge on MasterChef Australia, filling in for regular judge Andy Allen while he was on paternity leave. During that appearance, Meghan described her visit to the country as a “full circle” moment, having previously traveled to Australia with Harry nearly eight years earlier during the same trip when the couple announced their pregnancy with Archie.

A birthday tradition that has evolved over the years

Meghan’s approach to marking her birthday publicly has shifted noticeably over the past several years. Last year, for her 44th birthday, she shared a more intimate glimpse of a private dinner celebration at Funke, an upscale pasta restaurant in Beverly Hills helmed by chef Evan Funke, describing the meal as among the top five of her life. That post also included messages of gratitude to her husband, friends and family, along with a photo of her blowing out candles on a flower-topped birthday cake.

That earlier celebration also drew tributes from friends within Meghan’s circle, including former “Suits” co-star Abigail Spencer, who shares the same birthday and posted an effusive tribute crediting Meghan with having a significant, positive impact on her life.

A milestone year for the Duchess

Turning 45 marks another milestone for Meghan, whose public profile has continued to evolve since she and Harry stepped back from their roles as senior working royals in 2020. In the years since, she has built out a business focused on lifestyle products through her As Ever brand, taken on new media and entertainment opportunities including her MasterChef Australia appearance, and continued to share curated updates about her family life with Harry, Archie and Lilibet through social media.

With her birthday celebrations now shared publicly, attention is likely to remain on how Meghan continues to balance her public-facing business ventures with the more private, family-focused glimpses she has increasingly chosen to share with followers. Her latest post, much like the family photos shared following the England trip, offered fans a warm, personal look at her life without straying into the more heavily scrutinized territory of formal royal engagements, continuing a pattern that has come to define how the Duchess of Sussex presents herself publicly in the years since leaving royal life.

SYDNEY — Australian shares pushed to a fresh all-time high Wednesday, with the S&P/ASX 200 climbing 70.9 points, or 0.78%, to 9,216.7 by 3:15 p.m. AEST, extending a rally that has now stretched across three consecutive sessions and pushed the benchmark firmly past its previous record.

The advance builds directly on Tuesday’s strong session, when the index surged 126.5 points, or 1.40%, to close at 9,145.80, its highest closing level since early March and just short of the intraday all-time high of 9,202.90 set in late February. Wednesday’s move pushed the index decisively above that prior peak, confirming a new record for Australian equities.

A rally fueled by Wall Street and easing Iran tensions

Much of the momentum behind this week’s gains has come from offshore. U.S. stocks closed at fresh record highs overnight, with the S&P 500 and Nasdaq both extending their own rallies amid growing optimism that the United States and Iran could reach a deal to reopen the Strait of Hormuz, a critical global oil shipping corridor. That optimism has helped ease the risk-off sentiment that had weighed on markets in the weeks following renewed U.S.-Iran tensions earlier this year.

IG market analyst Tony Sycamore attributed the local rally to a combination of factors, describing it as reflecting a solid night on Wall Street, cleaner positioning following last week’s technology sector selloff, and softer Middle East headlines after President Donald Trump paused planned strikes on Iran. Sycamore also pointed to stronger-than-expected Australian household spending data as a factor helping offset broader concerns about subdued consumer confidence and a cooling housing market, even though the data is unlikely to shift expectations that the Reserve Bank of Australia will leave interest rates unchanged at its meeting next week.

Broad-based gains across sectors

Tuesday’s advance was notable for its breadth, with advancers outnumbering decliners by a dominant 238 to 47 across the broader S&P/ASX 300, and only the defensive utilities and consumer staples sectors finishing in the red. Information technology led the charge with a 3.9% gain, buoyed by overnight strength on the Nasdaq tied to renewed enthusiasm around AI infrastructure and semiconductor stocks. That enthusiasm flowed directly into local tech names, with Life360 surging 11.4% for its best session in months, followed by gains of around 6% for Appen and Catapult Sports, and a 5.7% rise for Megaport.

Australia’s big four banks also contributed meaningfully to Tuesday’s rally, climbing between 1.7% and 2.7% after Morgan Stanley flagged the sector as poised for strong upcoming earnings. The financials sector went on to close at a record high of its own on Tuesday.

A more mixed session Wednesday

Despite the index pushing to fresh record territory Wednesday, trading beneath the surface looked somewhat more mixed than Tuesday’s broad-based advance. The financials sector, which closed at a record high just a day earlier, was trading roughly 1.1% lower by mid-morning, with Commonwealth Bank down 2.4% in what analysts characterized as likely profit-taking following the prior session’s strength. Meanwhile, the materials sector caught a strong bid, rising 2.3%, with mining giant BHP up 2.4%, suggesting a rotation of capital away from banks and toward resources stocks.

Other notable movers Wednesday included South32, up 3.5%, Northern Star Resources, up 2.8%, Qantas Airways, up 2.6%, and Evolution Mining, up 2%. Most major banks remained subdued and energy names lagged behind the broader market’s advance.

Domestic data adds support

Local economic data released this week has provided additional support for the rally. Australia’s July services sector activity posted its strongest growth in six months, with the index revised upward from its initial flash reading. June household spending rose 0.8% month-over-month, comfortably beating consensus expectations of 0.2% growth, while July ANZ job advertisements climbed 0.8%, also topping forecasts. Together, the data pointed to a more resilient domestic economy than some analysts had anticipated, even as July industry conditions data showed continued weakness in manufacturing and construction.

With money markets now pricing in almost no chance of an RBA rate hike at next week’s meeting, and only around 14 basis points of additional tightening expected across the remainder of 2026, investors have increasingly focused on corporate earnings as the next major catalyst for the market.

Bank earnings season looms large

Investors are now turning their attention to the upcoming reporting season for Australia’s major banks, with results from Commonwealth Bank and mining giant BHP, which together make up more than 20% of the ASX 200’s weighting, closely watched in the days ahead. eToro’s lead analyst for the Asia-Pacific region, Josh Gilbert, characterized the current rally as broad-based rather than concentrated in any single sector or trade. “Money is moving across the market rather than one crowded trade,” Gilbert said, describing the nature of this week’s gains.

Financial sector shares climbed 5.84% in July, while energy sector stocks gained nearly 10% over the same period, reflecting the kind of sector rotation that has characterized the broader market’s climb back to record levels.

With the ASX 200 now trading at fresh record highs and the Reserve Bank of Australia’s policy decision due next week, investors are bracing for a busy stretch that could bring further volatility even as the market’s overall trajectory remains firmly upward. Attention in the coming days is expected to center on trade data from both Australia and China, its largest trading partner, along with the start of major bank earnings, all of which could shape whether this week’s record-breaking run continues or gives way to a period of consolidation after such a rapid climb.

The Advertising Standards Authority has banned a marketing email sent by fashion brand Jaded London, ruling on 5 August that an image of a model holding a lit cigarette irresponsibly glamorised smoking.

The regulator upheld a single complaint about the email, which was sent on 27 May and showed a model standing by a scooter next to a body of water, wearing a pink backless mini dress with her back to the camera.

In its ruling, the ASA said the ad depicted “a young woman in fashionable clothing and accessories standing in front of a scooter next to a body of water, which the ASA considered evoked an aspirational holiday lifestyle”.

“She was holding a slim cigarette with visible ash at the tip, and we considered that suggested it was lit,” the watchdog said.

It added that the image was “heavily stylised and presented the model in a fashionable and attractive manner”. By associating that image with smoking, the ASA said, the ad “had the effect of portraying smoking as appealing and therefore irresponsibly glamorised it”.

The ad breached rule 1.3 of the CAP Code, which requires marketing communications to be prepared with a sense of responsibility to consumers and to society.

The ASA told Jaded London the ad must not appear again in the form complained about, and told the company to ensure future marketing communications were socially responsible and did not glamorise smoking.

Responding to the watchdog, Jaded London said it was not clear whether the model was holding a cigarette because it appeared slimmer than a typical cigarette and no smoke was visible in the image. It said that if viewers understood the object to be a cigarette, it did not appear to be lit.

The company also said the cigarette was not the focus of the ad because it was “less prominent than other elements of the image, such as the model’s clothing and accessories”.

Jaded London told the ASA it understood why it was best to avoid images of models holding cigarettes, and confirmed it would not use smoking content in future ads. The ASA said it welcomed that assurance but concluded the ad was irresponsible and breached the code.

Jaded London was founded in 2013 by siblings Jade Camber and Grant Goulden. Its clothes have been worn by Beyoncé and Kylie Jenner and are stocked in shops including Selfridges and Urban Outfitters. The brand has 1.5 million Instagram followers and recorded £51m of sales in the year to June 2025.

It is the second complaint the ASA has upheld against the company. In December 2024, the regulator banned an Instagram post promoting a footwear collaboration, ruling that images of women positioned between motorbike wheels objectified and sexualised them and were likely to cause serious offence.

The watchdog has taken a similar line with other clothing retailers over image-led marketing. In February 2022 it ruled that a Boohoo promotion featuring a model in a T-shirt and bikini bottoms was staged in a “sexually suggestive” way and told the retailer to prepare future ads with a sense of responsibility to consumers and society. In May this year the regulator banned two adverts for British beef and milk after concluding the carbon footprint claims they carried could not be substantiated.

At the time of writing, Jaded London’s Instagram feed contained several other images of people smoking while wearing its clothes.

A spokesperson for the ASA told Business Matters it was unable to comment on whether the other posts broke the rules without them going through its formal process.

“We’d always encourage anyone who has a concern about an ad they’ve seen to report it to us,” they added.

Jaded London was approached for comment.