Google is considering setting up a “hyperscale” data center near Ho Chi Minh City, Vietnam’s southern economic center, said the source, who was not named because the information is not public.
The investment, the amount of which the source did not specify, would be a real financial boost for Vietnam. So far, the country has not been able to attract large foreign capital to build data centers. The reason for this is the country’s patchy infrastructure. Large technology companies prefer to locate their centers in competing countries in the region.
It was not clear how quickly Google would make a decision on an investment, but the source said internal discussions were taking place and the data center could be ready in 2027.
A Google spokesman declined to comment on the plans for the data center.
Hyperscale centers are the largest in the industry and their power consumption is typically equivalent to that of a major city.
A hyperscale data center with a power consumption capacity of 50 megawatts (MW) could cost between $300 million and $650 million, according to estimates based on data published by real estate consultant Jones Lang LaSalle in a report on data centers in Vietnam this year.
Google’s move was motivated by the large number of its domestic and foreign cloud services customers in Vietnam and the country’s growing digital economy, the source said, noting that the Southeast Asian country is one of the fastest-growing markets for YouTube, Google’s popular online video-sharing platform.
According to an internal market report from a Vietnamese industrial park seen by Reuters, the currently largest data center operators in Vietnam by computing space are the industrial investment company IDC Becamex and the telecommunications company VNPT, both Vietnamese state-owned companies.
GROWTH STRATEGY
Despite the growing demand for digital services among Vietnam’s 100 million residents, foreign investors are largely avoiding the country, according to industry experts. This is due to intermittent power outages, unattractive investment incentives and a weak internet infrastructure that relies on a handful of aging undersea cables.
Unattractive foreign ownership and data localization provisions have also long been an obstacle, but in a reform passed in November, Vietnamese lawmakers decided to give full ownership to foreign data center operators.
Vietnam has strict cybersecurity regulations and has long been at odds with foreign technology companies over the storage of data in the country – a requirement that is not regularly enforced.
Undeterred, Google is opening a representative office in Vietnam and, according to ads on LinkedIn, is already hiring dozens of engineers, marketing experts and other professionals.
“We now have a team on the ground to better serve our Vietnam-based advertisers and support the country’s digital transformation,” a Google spokesperson told Reuters.
Google is also offering 40,000 scholarships for basic AI courses in Vietnam and $350,000 each for 20 selected AI startups, Marc Woo, managing director of Google Vietnam, said on LinkedIn last month.
The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones.
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Reporting by Francesco Guarascio and Phuong Nguyen; Editing by Muralikumar Anantharaman and Alex Richardson
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