Malaysia Is Investigating a Silicon Valley "Startup Society" Built on a Reclaimed Island in Johor

Startup
23 Jul 2026 • 12:30 PM MYT
Ronny M
Ronny M

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If you have never heard of Network School, here is the short version. It is a co-living, co-working community founded by former Coinbase CTO Balaji Srinivasan, operating out of a hotel-turned-campus in Forest City, the once-empty megaproject on a reclaimed island in Johor. The idea is that a self-selected group of technologists, founders and researchers can live and build together as a kind of prototype for what Srinivasan calls a "network state," a society organised around shared purpose rather than geography.

For a while, Malaysian authorities largely let it be, treating it as an unusual but low-risk experiment bringing global attention to an underused development. That changed in July, after allegations spread on Threads claiming some Network School participants were Israeli nationals entering Malaysia on second passports, prompting Johor Chief Minister Onn Hafiz Ghazi to order multiple federal agencies, including immigration, to investigate. Malaysia does not maintain diplomatic relations with Israel and does not permit entry to Israeli passport holders.

The allegations themselves have not been independently verified, and Network School has denied any wrongdoing, but the investigation itself signals how quickly public trust can shift once a national sensitivity like this gets raised. Beyond the immigration question, there are broader critiques worth understanding. Attendees have described the campus as overwhelmingly male, with no on-island hospital or pharmacy, and an early curriculum that included no Malay language instruction and no Malaysian food on the buffet, despite operating inside Malaysia. Some of that has reportedly started to change, with informal Malay classes and cultural sessions now being organised by members themselves.

There is a genuine economic case for tolerating projects like this. Forest City has struggled for years to shake its "ghost town" reputation, and by April 2026 it was reporting roughly 20,000 residents and over RM790 million in cumulative tax contributions, numbers Johor's government is understandably keen to keep growing. Whether Network School helps or complicates that story now depends heavily on what the immigration probe finds.

One returning member wrote publicly that he estimated roughly a third of participants in his cohort were Indian, with the remainder spread across the South Asian diaspora, the United States, Europe, East Asia and Africa, describing a community that felt genuinely international rather than dominated by any single nationality. Whether that description matches what investigators eventually find remains to be seen, but it does suggest the immigration questions being raised now are narrower and more specific than a wholesale challenge to who the community serves.

My Opinion

Innovation hubs are genuinely good for a country when they actually integrate with it. A community that has operated in Johor for nearly two years without teaching a single class in Malay or serving a single local dish says something about how seriously it has taken being a guest here, immigration questions aside.


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