The Vietnam Posts and Telecommunications Group (VNPT) opens its the eighth internet data centre (IDC) at Hoa Lac Hi-tech Park in 2023. (Photo: VNA)

In the past year, tech behemonths like Microsoft, Meta, Alphabet and Amazon injected more than 200 billion USD into data centres 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.

However, most Asian data centres have not been equipped to host AI servers, presenting a significant opportunity for upgrading existing facilities and building new AI-capable data centres with better capacity across Asia.

In Vietnam, local tech companies, including VNPT, Viettel, CMC, FPT and VNG, are expanding their data centres' capacity. CMC is planning to invest 500 million USD in such centres and other facilities in Vietnam, Japan, and elsewhere by 2028. Meanwhile, Viettel is preparing to carry out 11 large-scale data centres 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 centre 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 centres 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 centre 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 favourable geographical location, Vietnam holds huge potential to become a large data centre 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 centre industry in Vietnam.

However, power remains a big challenge for the development of AI data centres. 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 centres.

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 centres while skilled workforce in the domain is limited.

Vietnam is poised to welcome a wave of AI-integrated data centre construction, primarily driven by foreign giants. To fully capitalise on this opportunity, the country must rapidly improve its power supply capabilities, land availability, human resources, and regulatory framework, she suggested./.