2024 is predicted to witness the explosion of Data Centers (TTDL) to meet the demand for artificial intelligence (AI) development. The shift of technology giants to Asia, especially Southeast Asia, is starting to become evident.
Singapore is leading the region in the number of tourism centers, but limitations in area, electricity and water are major obstacles for this island nation. Malaysia, Indonesia, Thailand and the Philippines are speeding up the race, making the "pie" in Southeast Asia increasingly smaller.
GROWING DEMAND
Data centers are at the key of the AI revolution, providing massive processing power and storing vast amounts of data critical to AI development. Bound by low-emissions commitments and cost-maximization goals, tech giants are flocking to Asia-Pacific.
Google recently created a tool to find clean electricity in places with large wind and solar surplus potential, then boost data center operations there.
Google believes doing so can cut carbon and costs, and so do other tech companies. They’re betting on demand for data centers across Southeast Asia, a region that’s seeing a surge in digital transformation strongly.
Recently, chipmaker Nvidia from USA announced plans to build a $200 million AI data center in Indonesia.
Ten times that number, in Malaysia, Microsoft announced a $2.2 billion investment in cloud infrastructure and AI. In Indonesia, Microsoft revealed plans to invest $1.7 billion, and in Thailand, they announced they would open a data center.
Singapore, after a period of applying the unwritten rule of not building new TTDL, is also starting to change.
Some companies still have their regional or global headquarters in Singapore but are expanding their TTDL portfolio to countries such as Malaysia, Indonesia, Vietnam, Thailand and the Philippines.
Reality forced Singapore to re-evaluate and make a series of moves. No longer competing for quantity, Singapore aims at the quality of its power plants by increasing capacity, from which they also have to find more renewable energy sources from surrounding countries.
WHAT SHOULD VIETNAM DO?
At the annual meeting of the Asian Development Bank (ADB) in Tbilisi (Georgia) on 2 and 3-5/2024, AI and Data Center attracted great attention.
“Vietnam is often seen as a natural choice for developing renewable energy because of its large renewable energy potential,” Thomas Abell, director of ADB’s digital technology department, told Tuoi Tre News on the sidelines of the discussion.
Earlier this month, China’s Alibaba revealed plans to build a data center in Vietnam. Domestically, Viettel has just put into operation the country’s largest data center with a capacity of 30MW. Such data centers may be an option for foreign investors, but they are still not enough.
The ability to provide better services, use and move data across borders in other countries in Southeast Asia may be the reason why some businesses have not chosen Vietnam recently, according to Mr. Thomas Abell.
However, with Vietnam's rapidly expanding market size and strong ability to integrate into the world economy, Mr. Thomas Abell believes that at some point Nivida will need to have another data center in Vietnam.
Sharing the same view is Dr. David Hardoon, CEO of Aboitiz Data Innovation (Singapore), a person with more than 20 years of experience in technology and AI.
“One of the challenges for Vietnam is its attitude towards cloud computing and the use of cloud providers. It is very localized. If Vietnam has a data center, it will only serve Vietnam, not the region,” David Hardoon told Tuoi Tre News
Over time, hyperscale companies like Amazon, Google, Microsoft will need to have data centers in each country to serve local markets and meet regulatory requirements.
But in the long term, government regulation needs to recognize the cross-border needs of investors, and provide regulations that ensure data security without being overly restrictive.
Not only Vietnam, many other countries in the region also have their own data policies. China is the pioneer in tightening but has recently proposed to loosen cross-border data controls.
Despite regulatory fragmentation in Asia, Mark Bennett, technology and real estate advisor at Hogan Lovells, believes that TTDL investors will be driven by only one thing: return on investment.
(Source: Tuoi Tre Newspaper)