29-8-2024 (HANOI) Alphabet’s Google is reportedly considering the construction of a substantial data centre near Ho Chi Minh City, the country’s southern economic powerhouse. This development, if realised, would mark the first major investment of its kind by a leading US technology firm in the Southeast Asian nation.
According to a source familiar with the matter, who spoke on condition of anonymity due to the sensitive nature of the information, Google is contemplating the establishment of a “hyperscale” data centre. These facilities, known for their immense size and power consumption akin to that of a large city, represent a significant leap in data processing capabilities.
While the exact investment figure remains undisclosed, industry estimates suggest that a hyperscale data centre with a power consumption capacity of 50 megawatts could require an investment ranging from $300 million to $650 million. This projection is based on data from real estate consultant Jones Lang LaSalle’s recent report on Vietnamese data centres.
The potential investment is reportedly driven by Google’s growing client base in Vietnam, both domestic and international, coupled with the nation’s rapidly expanding digital economy. Vietnam’s position as one of the fastest-growing markets for YouTube, Google’s video-sharing platform, is said to be a key factor in this strategic consideration.
If the plan comes to fruition, it could represent a significant boost to Vietnam’s tech infrastructure. The country has thus far struggled to attract major foreign capital in the data centre sector, largely due to challenges such as intermittent power supply issues, less competitive investment incentives, and ageing internet infrastructure.
Currently, the data centre landscape in Vietnam is dominated by state-owned enterprises, with IDC Becamex and telecommunications company VNPT leading in terms of computing space. Google’s potential entry into this market could significantly alter the competitive dynamics and potentially spur further foreign investment.
The move also aligns with Google’s broader regional strategy. In May, the tech giant announced a $2 billion investment in Malaysia for its first data centre and Google Cloud region in the country. Vietnam, with its population of 100 million and growing demand for digital services, presents an attractive market for expansion.
Recent legislative changes in Vietnam may have paved the way for this potential investment. In November, Vietnamese lawmakers approved reforms allowing foreign data centre operators to retain full ownership, addressing a longstanding hurdle for international tech companies.
While Google has declined to comment specifically on the data centre plans, the company has confirmed it is establishing a representative office in Vietnam and is actively recruiting for various roles. “We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country’s digital transformation,” a Google spokesperson stated.
Furthermore, Google is demonstrating its commitment to Vietnam’s tech ecosystem through initiatives such as offering 40,000 scholarships for basic AI courses and providing substantial funding for selected AI startups.
