Malaysia has shut down entrepreneur Balaji Srinivasan’s Network School, ending a two-year project to build a global hub for entrepreneurs, developers, investors and digital innovators.
The project was to be located in Forest City, Johor, and was intended to be a residential campus where participants could live, learn and build startups while exploring the concept of a decentralized “network state.”
The closure comes after Malaysian authorities revoked the business licence of the project after regulatory and licensing violations. The Iskandar Puteri City Council said inspections showed that the organisation was operating beyond the scope of its approved licence and had failed to comply with some local advertising regulations.
The Network School was initiated in 2024 and attracted entrepreneurs and technology experts from all over the world. The idea was created by Balaji Srinivasan, an ex chief technology officer at Coinbase and author of The Network State, to bring education, entrepreneurship and community living into one place.
The project also generated new attention to Forest City, a massive mixed-use development in Johor and a project already in trouble with very low occupancy even though so much money has been poured into it.
The project was under increased scrutiny in July when social media claimed Israeli citizens were involved. The issue quickly drew political attention, as Malaysia does not have diplomatic ties with Israel and has strict entry policies for Israeli passport holders.
Malaysia's Immigration Department then launched an investigation into the allegations. The inspectors later confirmed that all of the people who were inspected had valid travel documents and no immigration violations were detected. But the Network School was in full compliance with local laws and licensing requirements too, the investigation also found.
According to Johor authorities who reviewed the project, they decided to revoke the licence, effectively ending the project’s operation in Malaysia.
The country welcomes international investment and technology-oriented activities but the government said all organizations must comply with Malaysian laws and regulations without exception.
Balaji Srinivasan has defended the project, saying that the Network School invested more than RM100 million in Forest City and brought entrepreneurs, investors and skilled professionals from all over the world to the city. He contended that the initiative stimulated jobs, supported the local economy and cooperated with government agencies throughout its work.
Despite these efforts, the project was unsuccessful in Malaysia. Srinivasan intends to relocate the Network School to Kazakhstan, where authorities have also been said to be interested in hosting the next phase of the initiative.
The closure is a serious blow for one of the world’s most closely watched experiments in the integration of technology, education and community-based living. It also underscores the need for regulatory compliance for innovative projects that are operating across borders.
The Network School has received international recognition for its unique vision but its experience in Malaysia shows ambitious ideas must be applied rigorously to the legal and administrative framework in the countries in which they operate.
