Alphabet’s Google is exploring the possibility of constructing a large-scale data centre in Vietnam, which would represent the first significant investment by a major US technology company in the Southeast Asian country. The proposed “hyperscale” data centre is being considered for a location near Ho Chi Minh City, Vietnam’s economic hub, according to a source familiar with the plans who requested anonymity due to the confidential nature of the information.
The specific size and cost of the investment have not been disclosed, but such a move could significantly boost Vietnam’s appeal as a destination for foreign capital in the data centre sector. Vietnam has struggled to attract substantial investments in this area due to infrastructure limitations, with many tech giants opting for other regional markets.
The timeline for Google’s decision is uncertain, but the source indicated that internal discussions are ongoing, and the data centre could potentially be operational by 2027. Google declined to comment on the plans.
Hyperscale data centres, known for their massive scale and high power consumption—comparable to that of a large city—are among the largest in the industry. According to estimates by real estate consultant Jones Lang LaSalle, a hyperscale centre with a power capacity of 50 megawatts (MW) could cost between $300 million and $650 million.
The motivation behind Google’s potential investment is linked to its substantial number of domestic and international cloud services clients in Vietnam, as well as the rapid growth of the country’s digital economy. Notably, Vietnam is one of the fastest-growing markets for YouTube, Google’s popular video-sharing platform.
Currently, Vietnam’s top data centre operators include IDC Becamex, an industrial investment firm, and VNPT, a state-owned telecommunications company, based on computing space.
In May, it was reported that Alibaba, a Chinese e-commerce giant, was also considering a data centre investment in Vietnam, though the company has not yet commented on the matter.
Growth Strategy and Market Challenges
Despite a rising demand for digital services among Vietnam’s 100 million residents, foreign investment in the data centre sector has been limited. Challenges include occasional power shortages, less attractive investment incentives, and outdated internet infrastructure reliant on aging subsea cables. Southeast Asia’s leading data centre markets, such as Singapore, Malaysia, and Thailand, have attracted significantly larger investments from global tech firms.
In response to these challenges, Vietnam has made recent reforms to improve its investment climate. In November, Vietnamese legislators approved a measure allowing full foreign ownership of data centres, addressing a long-standing barrier to investment.
However, Vietnam’s strict cybersecurity regulations and data localization requirements have historically posed hurdles for foreign tech companies. Despite these issues, Google remains committed to expanding its presence in Vietnam, including opening a representative office and hiring numerous local professionals.
Additionally, Google has launched initiatives to support Vietnam’s digital development, including offering 40,000 scholarships for basic AI courses and $350,000 grants for 20 selected AI startups. The company also maintains a significant network of local suppliers for its products, such as Pixel smartphones.
You Might Be Interested In
