The Alphabet-owned company, Google, is reportedly exploring plans to build a large data center in Vietnam.
This development would mark the first time the tech giant has planned such a facility in this nation. According to sources cited by Reuters, Google is considering a hyperscale data center near Ho Chi Minh City, though the timeline for a final decision remains unclear. The facility could be fully operational as early as 2027.
Hyperscale data centers often consume electricity equivalent to that of a major city. Real estate consultants estimate that constructing a 50MW data center could cost between US$300 million and US$500 million.
Informed sources indicated that Google is optimistic about the growth prospects of Vietnam's cloud services market, driven by domestic and global clients. Additionally, YouTube, a subsidiary of Google, has seen rapid expansion in the country.
Reuters, citing a report from a Vietnamese industrial park, highlights that major data center operators in the country include IDC Becamex, an industrial and urban real estate developer, and VNPT, a telecommunications company. Both have significant government ties.
Nikkei has reported that China's Alibaba is planning to build a data center in Vietnam as well to comply with local data storage regulations.
Despite Vietnam's population of nearly 100 million and growing demand for digital services, analysts point out challenges such as inadequate electricity infrastructure, limited government incentives, and aging submarine cables that deter investment. In contrast, neighboring countries like Singapore, Malaysia, and Thailand are more appealing to investors
In May 2024, Google announced a US$2 billion investment in Malaysia to establish the country's first data center and cloud region. Additionally, Amazon's AWS recently launched a new infrastructure Region in Malaysia.
Analysts have noted that Vietnam's previous data ownership regulations had discouraged investors. However, a revision in November 2023 now enables 100% ownership for foreign data center operators.
