Data Centres, the New Gold in the Era of AI
More investments are lined up for new data centres in the Asia Pacific region.
Data centers are essential infrastructure in the modern age, critical for storing and analyzing massive troves of data using AI applications and advanced computing capabilities. Data center construction has become a focus for global technology companies and investors amid booming demand for infrastructure to support the research and development of artificial intelligence (AI).
In Taiwan, Amazon Web Services (AWS) announced in June that it would invest billions of dollars over the next 15 years to launch a new data center region on the island. Taiwan is also home to Google’s largest data center operation in Asia, and Google was one of the first major tech companies to invest in Taiwan’s data infrastructure over the past decade.
Multinational tech companies are also exploring projects in Malaysia, Japan, and India as priority destinations for data center expansion. Oracle announced in April that it would spend over USD 8 billion to build more data centers in Japan. Analysts have said a cheaper yen has helped incentivize companies to build data centers in Japan, lowering labor costs needed for construction. Japan’s own ambition for AI development, and its ability to implement AI technology into society, have also helped the world’s third-largest economy attract investments for data centers.
Recently, Malaysia has also hosted visits by senior executives of Google and Microsoft, after which each company announced investments of around USD 2 billion. Neighboring Singapore has also been a recipient of Google’s generous investments with over USD 5 billion invested in digital infrastructure in Singapore. Google also completed its Singapore data center campus and cloud region in June. In India, Microsoft, Amazon, and other leading tech companies are spending billions of dollars on new computing infrastructure, according to recent media reports.
China is also ambitious about AI development and data center investment, even as geopolitical tensions, technology competition, and national security concerns constrain those ambitions somewhat. It is likely that China will continue to invest in data centers in friendly APAC markets and Global South countries, and in Hong Kong and the Greater Bay Area, in order to fuel China’s AI development.
Although the future path of AI development and implementation is uncertain, the build-up and testing of large language models and other AI models will create a sustained need for data centers that provide advanced computing capabilities. Large technology companies, private equity investors, and other interested parties will continue to focus on opportunities in this space.
(Author’s note: This story was originally written for The Asia Group’s “Pixel Politics” newsletter, July 2024)