Google weighs large data centre in Vietnam, source says, in nation’s first by a US tech giant
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The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones.
PHOTO: AFP
HANOI - Alphabet’s Google is considering building a large data centre in Vietnam, a person briefed on the plans said, in what would be the first such investment by a big US technology company in the nation.
Google is weighing setting up a “hyperscale” data centre close to Ho Chi Minh City, Vietnam’s southern economic hub, the source said, declining to be named because the information is not public.
The investment, the size of which the source did not specify, would be a shot in the arm for Vietnam, which has so far failed to attract major overseas capital in data centres due to its patchy infrastructure, with large tech companies preferring to house their centres in rival nations in the region.
It was not clear how quickly Google will reach a decision on an investment, but the source said internal talks are on, and the data centre could be ready in 2027.
A spokesperson for Google declined to comment about the data centre plan.
Hyperscale centres are the largest in the industry, with power consumption usually similar to that of a big city.
A hyperscale data centre with power consumption capacity of 50MW could cost between US$300 million (S$390 million) and US$650 million, according to estimates based on data published by real estate consultant Jones Lang LaSalle.
Google’s move was motivated by the large number of its domestic and foreign cloud services clients in Vietnam and the country’s expanding digital economy, the source said, noting that the country was one of the fastest-growing markets for Google-owned YouTube.
Currently, the top data centre operators in Vietnam, based on computing space, are industrial investment firm Becamex IDC and telecommunications company VNPT, both Vietnamese state-owned enterprises, according to an internal market report by an industrial park in Vietnam seen by Reuters.
The Nikkei reported in May that Chinese e-commerce company Alibaba was considering building a data centre in Vietnam.
Growth strategy
Despite growing demand for digital services from Vietnam’s 100 million population, foreign investors in the sector have largely shunned the country because of occasional power shortages, less attractive investment incentives and weak internet infrastructure which relies on a handful of ageing subsea cables, according to industry experts.
In South-east Asia, Singapore, Malaysia and Thailand are well ahead in the industry, and have attracted far bigger investments from global tech giants.
Google said in May it will invest US$2 billion in Malaysia
Unattractive regulations on foreign ownership and data localisation have also long been a hurdle, but in a reform approved in November, Vietnamese legislators decided to allow overseas data centre operators to retain full ownership.
Vietnam has strict cyber-security rules and has long clashed with foreign tech companies about storing data in the country – a requirement that it has, however, not regularly enforced.
Undeterred, Google is opening a representative office in Vietnam, and is already hiring dozens of engineers, marketing experts and other professionals, according to advertisements on LinkedIn.
“We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country’s digital transformation,” a spokesperson for Google told Reuters.
Google is also offering 40,000 scholarships in Vietnam for basic artificial intelligence (AI) courses and US$350,000 each for 20 selected AI start-ups, Google Vietnam managing director Marc Woo said on LinkedIn in July.
The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones. REUTERS
