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SHAH ALAM - What began as a Silicon Valley entrepreneur’s ambitious experiment to create a technology-driven global community in Johor has evolved into a national debate involving immigration, sovereignty, geopolitics and Malaysia’s position on foreign investment.
The Network School, founded by former Coinbase chief technology officer Balaji Srinivasan at Forest City, attracted international tech workers and investors but later came under scrutiny after allegations involving Israeli nationals, regulatory compliance and its wider “network state” philosophy.
Here is the timeline of how the controversy unfolded.
What Is The Network School?
The Network School is a private co-living and co-learning technology community established at Forest City, Johor, designed for startup founders, software engineers, digital entrepreneurs and technology builders.
Unlike traditional educational institutions, it is not a government-recognised university and does not offer academic degrees. Instead, it operates as a real-world experiment based on Srinivasan’s idea of a “network state”, a concept outlined in his 2022 book The Network State.
Srinivasan argues that future communities could first form online around shared values before developing physical locations and eventually seeking recognition as new forms of society.
The Johor project became the first major physical representation of that idea, using Forest City’s existing residential and commercial infrastructure as a base.
Who Is Balaji Srinivasan?
Srinivasan, 46, is an American technology entrepreneur, investor and academic known for his work in cryptocurrency, biotechnology and venture capital.
He previously served as the first chief technology officer of cryptocurrency exchange Coinbase and was a general partner at Silicon Valley investment firm Andreessen Horowitz.
He also co-founded Earn.com, which was later acquired by Coinbase and Counsyl, a genetic testing company acquired by Myriad Genetics.
Srinivasan has invested in several technology companies, including artificial intelligence (AI) search platform Perplexity, cloud computing company DigitalOcean and software development platform Replit.
His supporters describe him as a technology visionary, while critics have questioned some of his ideas on governance, decentralisation and alternative societies.
August 2024: The Beginning Of The Experiment
Srinivasan announced the launch of the Network School in August 2024 through his Substack and social media platforms.
At the time, he described the initiative as a physical gathering space for “techno-optimists” located on an island near Singapore, although the exact location was initially kept private.
Applicants were required to place deposits before knowing the full details of the location.
September 2024: First Cohort Begins In Forest City
The Network School officially began operations at Forest City on Sept 23, 2024.
The first phase was designed as a 90-day experimental programme involving about 128 participants from different countries.
The trial focused on testing whether a physical community built around online networks, technology and entrepreneurship could operate successfully.
Residents followed a structured lifestyle based on four principles, “Learn, Burn, Earn and Fun”.
“Learn” focused on technology discussions, coding sessions and talks from industry figures, while “Burn” involved fitness programmes and healthy meals.
“Earn” encouraged participants to develop technology projects, while “Fun” focused on community activities and social events.
Monthly fees reportedly ranged between US$1,500 (about RM6,117) and US$3,000 (about RM12,234).
March 2025: Expansion Into A Permanent Community
After the initial experiment ended, the Network School reopened on March 1, 2025, with a larger capacity.
The second phase shifted from a temporary retreat into a longer-term technology community, increasing participation to around 256 members.
The objective also changed towards developing “social builders”, people who would create startups and technology projects within the community.
May 2025: Network School Becomes Long-Term Hub
By May 2025, the project moved away from its temporary pop-up model and launched a permanent programme.
The community continued attracting global technology workers, entrepreneurs and investors, eventually hosting hundreds of participants at Forest City.
The project promoted itself as a place where founders, developers and researchers could live together while building businesses.
April 2026: Malaysian Government Interest
The Network School gained wider attention after Digital Minister Gobind Singh Deo visited the campus on April 17, 2026.
The visit explored possible cooperation involving AI development, digital economy opportunities and technology talent.
However, the visit also drew criticism online from some who questioned government engagement with a project linked to Srinivasan’s ideas about alternative communities and governance.
July 2026: Controversy Erupts Over Security Concerns
The issue escalated in July after allegations circulated on social media claiming Israeli nationals had participated in the programme by entering Malaysia using second-country passports.
The allegations raised concerns because Malaysia does not have diplomatic relations with Israel and generally prohibits Israeli passport holders from entering the country without approval from the Home Ministry.
Some online claims also alleged that prospective participants were asked questions involving Israel, military technology and politics during the selection process.
The Johor government subsequently ordered a comprehensive investigation involving several agencies, including the Home Ministry, Immigration Department, Customs Department, police and regulatory authorities.
Johor Menteri Besar Datuk Onn Hafiz Ghazi said the state would not allow Johor to become a platform for activities that violate Malaysian laws or national interests.
"The Johor government will not allow any party to make this state a platform to bring in ideologies or movements that are contrary to the laws, sovereignty and interests of Johor and Malaysia."
The investigation examined participants’ identities, nationalities, travel documents, immigration passes and whether the project complied with licensing and land regulations.
July 15: Anwar Warns Of Deportation
Prime Minister Datuk Seri Anwar Ibrahim said any Israeli nationals found to have entered Malaysia through the programme would face immediate deportation.
“If any wrongdoing is found, action must be taken. If there are Israeli nationals involved, they will be deported immediately because Malaysia does not recognise Israel,” he said.
He stressed that Malaysia would not compromise on its immigration policies.
July 17: Network School Ordered To Stop Operations
Onn Hafiz announced that a cessation of business notice had been issued after local authorities found one of the premises linked to Network School was operating without a valid business licence.
He said inspections found the company operated from two premises, but only one had a valid licence for administrative purposes. The second premises was found to be operating without an Iskandar Puteri City Council (MBIP) business licence.
Authorities also found that an approved office space had allegedly been used as classrooms and for promotional activities without proper approval.
Onn Hafiz said enforcement action would continue if further breaches were discovered.
July 17: RM500 Million Expansion Put On Hold
Following the controversy, Srinivasan announced that Network School had suspended plans for a planned RM500 million expansion in Malaysia.
He said the company would not continue further investment without assurances that similar issues would not happen again.
"At this point, all further investment we were planning to make in Malaysia is on hold until we get sufficient assurance that such issues will not recur,” he said.
Srinivasan said the company had already invested more than RM100 million in Forest City without government funding and attracted thousands of engineers, investors and entrepreneurs from more than 70 countries.
He also requested a meeting with Anwar to discuss a memorandum of understanding with the Malaysian government.
"We are not asking for any money, just a meeting, to help restore confidence in Malaysia as an investable jurisdiction,” he mentioned.
July 18: Johor Continues Probe
Johor Regent Tunku Ismail Sultan Ibrahim said the state government and local authorities would continue investigating the matter.
He said any action would depend on investigation findings and compliance with Malaysian laws.
"Should any violations of the law, licensing conditions or regulations be found, firm action will be taken, including the revocation of the company's operating licence or permit in Johor,” he said.
The Network School controversy has since transformed from a technology investment discussion into a wider debate over innovation, foreign participation, immigration control and national sovereignty.
While supporters see it as an opportunity to position Malaysia as a global technology hub, critics argue that any international initiative must operate within the country’s legal and regulatory framework.
