Vietnam is ready for data centre growth. But headwinds remain
A lunch meeting painted a picture of opportunity and caution in equal measure.
Vietnam is ready for data centre growth. That was my conclusion after a lunch meeting with various data centre insiders in Ho Chi Minh City today. Here's why I think data centres could be set to surge in Vietnam, and the headwinds the country faces.
The rise of data centres
The Vietnamese government is well aware of how important data centres are. It has thrown open its doors, classifying data centres as priority infrastructure, allowing 100% foreign ownership, and offering various incentives to attract capital. Licensing is now clearer, the approval process is more structured, and all sectors have been encouraged to invest in data centres.
The momentum is visible. Just last month, Singapore's Sembcorp announced it got the green light to invest in a 90MW data centre in Ho Chi Minh City, its first move from powering data centres to owning them.
Headwinds on the ground
Of course, things often move much slower on the ground. From various conversations, there is a sense that fresh investments need to be balanced with the interests of local firms and incumbents. That tension is not unusual in emerging data centre markets, but it does add friction.
In addition, there are real concerns about whether adequate local capabilities exist to design and build modern, hyperscale data centres. This certainly isn't a problem unique to Vietnam. As I've noted in the past, it doesn't help that modern campuses today are so much larger than data centres from just a few years ago. The talent and expertise required to deliver at this scale is in short supply across the entire region.
The bigger picture
Recent developments in AI have convinced me that we will need significantly more data centres to support growing AI inference demand before the decade is out. I now believe we will need more than what is currently planned.
Vietnam has the policy framework, the government desire, and the geographic advantage to play a meaningful role. Whether it can translate that into built capacity at the pace the market demands will determine where it ends up in the regional data centre race.
