DPS Energy – a subsidiary of Malaysian investment holding company DPS Resources – and Hangzhou Xinfengwei Network – an affiliate of Chinese tech giant Alibaba – may develop data centers in Melaka, Malaysia.

The pair announced last Wednesday that they had signed a memorandum of understanding to explore the feasibility of such a project, which could offer between 150MW and 180MW of capacity at an estimated development cost of $7.5 million per megawatt.

According to these estimates, the data center could cost between $1.1bn and $1.35bn.

DPS Energy would be in charge of managing the data center, as well as providing land, power, and supporting infrastructure. Hangzhou Xinfengwei would undertake day-to-day operations and business management.

Memoranda of understanding are not legally binding commitments.

DPS Resources is a Malaysian conglomerate with wide-ranging interests in construction, manufacturing of building materials, property development, hotel management, and more. DPS Energy is one of its subsidiaries, with interests in energy production, battery storage, and more.

Hangzhou Xinfengwei Network is a joint venture between Alibaba and Xinfengwei, the latter of which is an AI cloud provider.

Melaka, also known as Malacca, is a coastal state in the southwestern peninsula of Malaysia. Most of Malaysia’s data centers are clustered around Kuala Lumpur – the country’s capital – and Johor, its southernmost peninsular state.