Alphabet’s Google is reportedly considering the establishment of a substantial data center in Vietnam, which would mark the first significant investment by a major U.S. technology company in the Southeast Asian nation, according to a source familiar with the plans.
Google is evaluating the possibility of building a “hyperscale” data center near Ho Chi Minh City, Vietnam’s southern economic center. The source, who chose to remain anonymous due to the confidential nature of the information, did not disclose specific investment figures. This project could provide a significant boost for Vietnam, which has struggled to attract major foreign capital for data centers due to inadequate infrastructure, leaving many large tech companies to establish their facilities in competing regional countries.
It remains unclear how soon Google will finalize its investment decision; however, the source indicated that internal discussions are ongoing, with the data center potentially slated for completion by 2027. Google spokesperson declined to comment on the data center proposal.
Hyperscale data centers are the largest in the industry, with power consumption similar to that of a major city. Estimates suggest that a hyperscale data center with a power capacity of 50 megawatts (MW) could cost between $300 million and $650 million, based on a report from the real estate consultancy Jones Lang LaSalle regarding data centers in Vietnam.
The motivation behind Google’s interest is attributed to the high volume of both domestic and foreign clients for its cloud services in Vietnam, coupled with the country’s rapidly expanding digital economy. The Southeast Asian nation has also emerged as one of the fastest-growing markets for YouTube, Google’s popular video-sharing platform.
Currently, leading data center operators in Vietnam, based on computing space, are state-owned firms IDC Becamex and VNPT, according to an internal market report from an industrial park in Vietnam reviewed by Reuters.
In May, Nikkei reported that the Chinese e-commerce giant Alibaba was considering similar projects in Vietnam, although Alibaba did not respond to requests for comment.
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Despite the growing demand for digital services from Vietnam’s 100 million residents, foreign investors have largely been reluctant to enter the sector due to periodic power shortages, less favorable investment incentives, and weak internet infrastructure reliant on aging subsea cables, according to industry experts.
Countries like Singapore, Malaysia, and Thailand have made significant strides in the industry, attracting far larger investments from global tech giants. Google previously announced a $2 billion investment in Malaysia to establish its first data center and Google Cloud region in that country.
Unattractive regulations regarding foreign ownership and data localization have been longstanding obstacles. However, a reform passed by Vietnamese legislators in November allows foreign data center operators to maintain full ownership of their operations.
Vietnam is known for its strict cybersecurity rules and has had ongoing disagreements with foreign tech companies regarding data storage within the country—a requirement that has not been consistently enforced.
Nonetheless, Google is moving forward by opening a representative office in Vietnam and actively hiring dozens of engineers, marketing specialists, and other professionals, as indicated by job postings on LinkedIn.
A Google spokesperson stated, “We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country’s digital transformation.”
Additionally, Google is offering 40,000 scholarships in Vietnam for foundational AI courses and $350,000 each for 20 selected AI startups, according to Google Vietnam Managing Director Marc Woo’s LinkedIn announcement last month.
The company also maintains a vast network of suppliers in Vietnam that assemble its products, including Pixel smartphones.