S-E Asia emerges as data centre hot spot as AI usage rises

Tech firms drawn by region's lower costs, power availability and geopolitical neutrality

- Kang Wan Chern

The world's largest technology firms are flocking to South-east Asia to build data centres at a time when demand for infrastructure and computing power to enable artificial intelligence (AI) is rapidly rising.

The new investments are expected to contribute to the region's economies by creating skilled jobs in data centre construction, engineering and maintenance, while also developing specialised talent in AI, cyber security, and data science and management.

The investments will also improve the region's digital infrastructure, allowing small businesses and large institutions to store their data locally, significantly reducing downtime while increasing data sovereignty.

With AI-supported innovations such as searches on ChatGPT now requiring at least four to five times more processing capacity compared with traditional internet searches, data centre demand is expected to grow at around 20 per cent a year for the next five to seven years, analysts at Maybank noted in an October report.

Data centres are large facilities built to accommodate servers, data storage systems and networking equipment that support better internet services and telecommunications.

This, in turn, enables popular online activities such as gaming, live-streaming and investing, as well as more advanced technologies like cloud computing and AI.

Thanks to its lower costs, power availability and geopolitical neutrality, South-east Asia is emerging as an ideal region for tech operators to establish a data centre base, with the top five countries being Singapore, Malaysia, Thailand, Indonesia and Vietnam.