By Phuong Nguyen and Francesco Guarascio
HANOI (Reuters) – Alphabet (NASDAQ:)’s Google is contemplating constructing a big knowledge centre in Vietnam, an individual briefed on the plans stated, in what can be the primary such funding by an enormous U.S. expertise firm within the Southeast Asian nation.
Google is weighing establishing a “hyperscale” knowledge centre near Ho Chi Minh Metropolis, Vietnam’s southern financial hub, the supply stated, declining to be named as a result of the knowledge will not be public.
The funding, the dimensions of which the supply didn’t specify, can be a shot within the arm for Vietnam which has up to now failed to draw main abroad capital in knowledge centres as a result of its patchy infrastructure, with giant tech firms preferring to accommodate their centres in rival nations within the area.
It was not clear how rapidly Google will attain a choice on an funding however the supply stated inside talks are on and the information centre may very well be prepared in 2027.
A spokesperson for Google declined to remark in regards to the knowledge centre plan.
Hyperscale centres are the biggest within the business, with energy consumption normally just like that of an enormous metropolis.
A hyperscale knowledge centre with energy consumption capability of fifty megawatts (MW) might price between $300 million and $650 million, in response to estimates primarily based on knowledge printed by actual property advisor Jones Lang LaSalle in a report this yr on knowledge centres in Vietnam.
Google’s transfer was motivated by the massive variety of its home and overseas cloud companies purchasers in Vietnam and the nation’s increasing digital economic system, the supply stated, noting the Southeast Asian nation was one of many fastest-growing markets for YouTube, Google’s well-liked on-line video sharing platform.
Presently the highest knowledge centre operators in Vietnam, primarily based on computing house, are industrial funding agency IDC Becamex and telecommunications firm VNPT, each Vietnamese state-owned enterprises, in response to an inside market report by an industrial park in Vietnam seen by Reuters.
The reported in Could that Chinese language e-commerce firm Alibaba (NYSE:) was contemplating constructing a knowledge centre in Vietnam. Alibaba didn’t reply to a request for remark.
GROWTH STRATEGY
Regardless of rising demand for digital companies from Vietnam’s 100 million inhabitants, overseas traders within the sector have largely shunned the nation due to occasional energy shortages, much less enticing funding incentives and weak web infrastructure which depends on a handful of ageing subsea cables, in response to business consultants.
In Southeast Asia, Singapore, Malaysia and Thailand are properly forward within the business, and have attracted far greater investments from international tech giants.
Google stated in Could it should make investments $2 billion in Malaysia to develop its first knowledge centre and Google Cloud area within the nation.
Unattractive laws on overseas possession and knowledge localisation have additionally lengthy been a hurdle, however in a reform accredited in November Vietnamese legislators determined to permit abroad knowledge centre operators to retain full possession.
Vietnam has strict cybersecurity guidelines and has lengthy clashed with overseas tech firms about storing knowledge within the nation – a requirement that it has, nevertheless, not repeatedly enforced.
Undeterred, Google is opening a consultant workplace in Vietnam, and is already hiring dozens of engineers, advertising consultants and different professionals, in response to adverts on LinkedIn.
“We now have a staff on the bottom to higher serve our Vietnam-based promoting clients and help the nation’s digital transformation,” a spokesperson for Google informed Reuters.
Google can also be providing 40,000 scholarships in Vietnam for fundamental AI programs and $350,000 every for 20 chosen AI startups, Google Vietnam Managing Director Marc Woo stated on LinkedIn final month.
The corporate already has a big community of suppliers in Vietnam that assemble its merchandise, together with Pixel smartphones.