Vietnam Data Centres Set For Change – Big Tech Looking On

Vietnam's data center market is witnessing a significant shift with the implementation of a new law on telecommunications that removes foreign ownership restrictions for data and cloud providers. As of the latest developments, foreign investors can now have 100% ownership in data centers within the country, a move that opens the door to increased foreign capital and expertise in the Vietnamese data infrastructure sector.

This legislative change offers foreign investors an exception from the otherwise strict licensing requirements and signals Vietnam's intention to be a more active player in the burgeoning global data economy. Among the major industry players poised to take advantage of these new regulations are Amazon Web Services (NASDAQ:AAPL) and Keppel (SGX: BN4), which are expected to expand their investments in the growing Vietnamese market.

The Vietnamese government has simultaneously been tightening its control over digital data through measures like the Cybersecurity Law. This controversial law mandates that companies operating in Vietnam store data within the country—a decision that has been met with varying levels of opposition from tech giants such as Meta Platforms (NASDAQ:META) Inc. and Google (NASDAQ:GOOG).

While aimed at protecting national security and ensuring data sovereignty, critics argue that these rules could potentially increase operational costs for companies and pose challenges in maintaining data security and privacy.

Despite these potential issues, the legal framework in Vietnam stipulates that cloud and data providers are not responsible for the content stored on their servers by customers. However, these entities are compelled to comply with requests from competent state agencies to block specific content deemed inappropriate or harmful.

This opening up of Vietnam's market is set against the backdrop of expansive investments in global cloud computing infrastructure. Leading companies such as Amazon Web Services, Google, and Microsoft are pouring substantial resources into bolstering their data center operations worldwide. For instance, Amazon Web Services is engaged in talks with the Italian government for potential expansion plans in Italy, underscoring its strategy to enhance cloud services across Europe.

Simultaneously, Google has earmarked a $2 billion investment for Malaysia's first data center and Google Cloud region to support Malaysian businesses and the public sector. Meanwhile, Microsoft has announced its whopping $3.2 billion venture into Sweden's cloud and AI infrastructure, which includes the ambitious goal of training 250,000 individuals in AI skills to improve the nation's digital competencies.

The technology sector views these investments as lucrative opportunities, especially within the data center market. Analysts highlight the profitability for cloud service providers who can use Nvidia's infrastructure to potentially earn five dollars in GPU hosting for every dollar invested.

As the shift gears towards a more digitally oriented economy, Vietnam's latest legislative advancements present a clear invitation for global tech companies to contribute to its growing data center landscape. This move promises to enhance the country's technological infrastructure while positioning it as an attractive destination for data-driven investments.