Google to Open its First Data Center in Vietnam

CIO Tech Outlook Team | Thursday, 05 September 2024, 05:48 IST

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Google, a subsidiary of Alphabet, is reportedly exploring the possibility of constructing a large data center in Vietnam, according to a source with knowledge of the situation. If the project proceeds, it would represent the first significant investment of its kind by a U.S. tech giant in the country.
 
The potential site for the data center is said to be near Ho Chi Minh City, Vietnam's southern economic hub. While the exact cost and timeline remain confidential, the source indicated that if approved, the data center could be completed by 2027. Industry estimates suggest that a "hyperscale" data center with a power capacity of 50 megawatts could cost between $300 million and $650 million. These data centers are massive and consume energy equivalent to that of a major city.
 
Google's interest in this investment is reportedly driven by its growing client base for cloud services in Vietnam and the country's booming digital economy. Vietnam is one of the fastest-growing markets for YouTube, Google's video-sharing platform.
 
Currently, Vietnam's top data center operators, such as IDC Becamex and VNPT, are state-owned. While the country's demand for digital services is increasing, with a population of 100 million, foreign investors have been cautious due to challenges like power shortages, limited investment incentives, and strained internet infrastructure.
 
By contrast, countries like Singapore, Malaysia, and Thailand have attracted significantly larger investments from global tech companies. In May, Google announced a $2 billion investment in Malaysia for its first data center and Google Cloud region there.
 
Recent legislative reforms in Vietnam now allow foreign data center operators to retain full ownership, which could alleviate some regulatory barriers. However, ongoing concerns remain, including Vietnam's strict cybersecurity regulations and past conflicts with foreign tech firms over data localization requirements.
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