Google, a subsidiary of Alphabet, is reportedly considering building a large data centre in Vietnam, according to an unnamed source familiar with the plans.

If realised, this would mark the first major investment of its kind by a U.S. technology giant in the Southeast Asian country.

According to a confidential source, Google is assessing the possibility of establishing a “hyperscale” data centre near Ho Chi Minh City, the heart of Vietnam’s southern economic hub. The source did not provide details on the projected costs and wished to remain anonymous due to the private nature of the information. The timeline for Google’s decision-making process is unknown, but if the plan is implemented, construction might be completed by 2027.

Hyperscale data centres are among the largest in the industry, typically consuming power equivalent to that of a major city. Industry estimates suggest that a hyperscale data centre with a power consumption capacity of 50 megawatts could cost between $300 million and $650 million.

The consideration of this investment is reportedly driven by Google’s existing client base in Vietnam for its cloud services, as well as the country’s expanding digital economy. Vietnam is noted as one of the fastest-growing markets for YouTube, Google’s video-sharing platform.

Currently, the top data centre operators in Vietnam are IDC Becamex and VNPT, both state-owned enterprises, according to an internal market report seen by Reuters.

Despite Vietnam’s growing demand for digital services, fueled by its population of 100 million, foreign investors have largely avoided the sector due to several challenges. These include occasional power shortages, less appealing investment incentives, and a weak internet infrastructure reliant on overused subsea cables.

In contrast, countries like Singapore, Malaysia, and Thailand have received high-tech investments from global tech companies that are several times larger than those in Vietnam. For instance, Google announced in May a $2 billion investment in Malaysia for its first data centre and Google Cloud region in that country.

Vietnamese legislators approved reforms in November that allow foreign data centre operators to retain full ownership, potentially addressing one longstanding regulatory hurdle. However, Vietnam’s strict cybersecurity rules and its history of conflicts with foreign tech companies over data localisation requests remain ongoing concerns.

Concurrently, Google is opening a representative office in the country, posting various available positions, and actively recruiting. Google also offers AI-related educational opportunities and supports startup development in Vietnam.

“We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country’s digital transformation,” a Google spokesperson told Reuters.

Google already maintains a network of suppliers in Vietnam that assemble its products, including Pixel smartphones.

The Google spokesperson declined to comment on the specific data centre plans. As with any potential business developments, plans may change, and the realisation of such a project would depend on various factors and further decision-making processes.

(Image by Pete Linforth)

See also: Google partners with Australia to strengthen cybersecurity for critical infrastructure

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Tags: cloud, data centre, Google, hyperscalers