Big Tech companies continue with AI data center investment in Southeast Asia

Southeast Asia is enjoying significant AI data center growth as regional governments see the technology as a significant opportunity to gain national competitive advantage, while Western companies are investing heavily in a significant market opportunity.

In recent weeks, the unprecedented growth in AI-focused data centers and hyperscale centers in Southeast Asia has been strengthened by significant investment from Western big tech companies.

For example, in September, Google announced a $1 billion investment for construction of a data center in Thailand to help meet growing AI processing and cloud computing demand, spread between Chonburi and Bangkok. Google said that these investments would support growing demand for its “AI innovations.”

The announcement came just a few days after Google Cloud and Dagang NeXchange Berhad (DNeX) reached a deal to build sovereign cloud and AI services in Malaysia. Many Southeast Asian countries are introducing regulations that ensure data is stored locally, hence sovereign AI data center construction is growing rapidly throughout the region, which is also becoming a significant region for colocation services. Google also invested $2 billion into its first data center in Malaysia back in May 2024.

DNeX will offer hardware that provides both CPU processing (for relatively less intensive cloud processing), as well as GPU processing (designed for high-intensity AI data center processing, which Google has named as its Vertex AI platform). Part of the agreement is thought to include a partnership to train up local employees in AI data center skills.

Likewise, in October, Oracle announced a $6.5 billion investment in Malaysia to build out its AI data center and cloud computing infrastructure. The company said that it would provide cloud computing services and would leverage AI services to its Malaysian customers. Meanwhile, in August, Amazon Web Services pledged a $6.2 billion investment for Malaysia to help it build out its AI data center and cloud computing infrastructure.

Malaysia is positioning itself as a significant tech hub in the region, but the whole of Southeast Asia is seeing massive growth in terms of AI data center and cloud computing development.

For example, Amazon promised to invest $9 billion to increase its existing infrastructure in Singapore, while Microsoft has spent billions investing in AI data center infrastructure throughout the region, including Malaysia, Indonesia, and Thailand, in 2024. In May 2024 it promised $1.7 billion to build AI infrastructure in Indonesia, as well as to provide AI skilling opportunities in both Indonesia and Thailand.

Southeast Asia is the world’s fastest-growing region for AI data center construction and development. According to Arizton, investment in AI and hyperscale data centers in Southeast Asia is predicted to grow from $10.23 billion in 2023 to $17.73 billion by 2029, a CAGR of 9.59% over the forecast period^[1].

Our team is currently researching a new briefing paper on data center investment in Southeast Asia – watch out for this new release.

Pamir has decades of experience helping U.S. and European companies to optimize market opportunities throughout the region.

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^[1] https://www.arizton.com/market-reports/southeast-asia-data-center-market