In the past year, tech behemonths like Microsoft, Meta, Alphabet and Amazon injected more than 200 billion USD into data centers and AI-related tool development, with a substantial portion flowing into Asia, where land is affordable, electricity is cheap, and demand for AI is soaring.
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The Vietnam Posts and Telecommunications Group (VNPT) opens its the eighth internet data center (IDC) at Hoa Lac Hi-tech Park in 2023 |
However, most Asian data centers have not been equipped to host AI servers, presenting a significant opportunity for upgrading existing facilities and building new AI-capable data centers with better capacity across Asia.
In Vietnam, local tech companies, including VNPT, Viettel, CMC, FPT and VNG, are expanding their data centers' capacity. CMC is planning to invest 500 million USD in such centers and other facilities in Vietnam, Japan, and elsewhere by 2028. Meanwhile, Viettel is preparing to carry out 11 large-scale data centers with a total designed capacity of over 350 MW, or 40% of the country’s total. It will partner with NVIDIA to develop AI data center infrastructure featuring nearly 800 supercomputers and 6,000 GPU cards.
CEO of the Viettel Internet Data Centre (IDC) Hoang Van Ngoc estimated that to serve the market of 100 million people in Vietnam with sufficient future technological services like AI, generative AI, and AI cloud computing, the size of domestic data centers must increase 15-fold.
International giants including Amazon, Microsoft, Supermicro, ST Telemedia Global Data Centers, Google, and Alibaba are also entering the Vietnamese market, with planned investments worth billions of USD, intensifying the competition in the sector.
According to Cushman & Wakefield's latest report, Vietnam offers competitive advantages for data center investments, with construction costs averaging 6.9 million USD per MW – among the lowest in the Asia-Pacific region, only trailing Taiwan (China). This is significantly lower than China (7.1 million USD), Thailand (7.6 million USD), Indonesia (8.7 million USD), and Malaysia (9 million USD).
Cushman & Wakefield Vietnam General Director Trang Bui stated that boasting reasonable construction costs and a favorable geographical location, Vietnam holds huge potential to become a large data center in the region, referencing the interest from Apple, Intel, Canon, Samsung, LG, LEGO and Airbus as a vivid demonstration. Besides, the country's increasing transparency, openness to foreign investment, and administrative reforms are creating more opportunities for international investors and driving the growth of the data center industry in Vietnam.
However, power remains a big challenge for the development of AI data centers. Associate Director of Industrial Services at Savills Hanoi Thomas Rooney said the facilities require 2 – 5 times more power than conventional ones. Vietnam should sketch out plans to upgrade and expand the power grid while developing renewable energy solutions to ensure stable electricity supply for the operation of large-scale data centers.
Meanwhile, Trang Bui said that along with stable and strong power supply, legal regulations and complicated administrative procedures remain a big hurdle to the building of AI data centers while skilled workforce in the domain is limited.
Vietnam is poised to welcome a wave of AI-integrated data center construction, primarily driven by foreign giants. To fully capitalize on this opportunity, the country must rapidly improve its power supply capabilities, land availability, human resources, and regulatory framework, she suggested.
Source: VNA