Google Mulling ‘Hyperscale’ Vietnam Data Centre – Report

Alphabet’s Google is reportedly considering expanding its facilities in another Asian country, which is not China.

Reuters, citing a person briefed on the plans, reported that Google is considering building a large data centre in Vietnam, in what would be the first such investment by a large US tech giant in the Southeast Asian nation.

It comes after Google began detaching itself from manufacturing in mainland China in recent years. In 2019 Google moved production of its Pixel smartphones away from China, to instead be made by manufacturers in Vietnam.

Hyperscale data centre

And Vietnam is not the only Asian country Google has expanded into.

In 2023 Google said it would begin production of 20 percent of its Pixel 8 smartphones in India, and in May this year said it would start manufacturing Pixel smartphones in the southern Indian state of Tamil Nadu sometime in 2024.

Now Google is weighing setting up a “hyperscale” data centre close to Ho Chi Minh City, Vietnam’s southern economic hub, the source told Reuters.

The size of the investment was not revealed, but it would be a shot in the arm for Vietnam, which has so far failed to attract major overseas capital in data centres due to its patchy infrastructure, with large tech companies preferring to house their centres in rival nations in the region.

Reuters noted it was not clear how quickly Google would reach a decision on an investment, but the source said internal talks were taking place and the data centre could be ready in 2027.

A spokesperson for Google declined to comment about the data centre plan.

Hyperscale centres are the largest in the industry, with power consumption usually similar to that of a big city.

Reuters reported that a hyperscale data centre with power consumption capacity of 50 megawatts (MW) could cost between $300 million and $650 million, according to estimates based on data published by real estate consultant Jones Lang LaSalle in a report this year on data centres in Vietnam.

Vietnam’s challenges

Google’s motivation for the investment in Vietnam is reported because of the large number of its domestic and foreign cloud services clients in Vietnam and the country’s expanding digital economy

According to Reuters, Vietnam is said be one of the fastest-growing markets for YouTube, but the nation also has to contend with the fact it suffers from occasional power shortages, coupled with less attractive investment incentives and weak internet infrastructure, which has not helped attract big name Western tech firms.

Vietnam also had unattractive regulations on foreign ownership and data localisation, but in November Vietnamese legislators approved a reform to allow overseas data centre operators to retain full ownership.

Other Southeast Asia nations such as Singapore, Malaysia, Thailand and Taiwan have traditionally attracted more investments from Western tech giants.

Local office, AI training

According to the Reuters report, Google seems undeterred by Vietnam’s local challenges, and is opening a representative office in the country.

Google is also already hiring dozens of engineers, marketing experts and other professionals, according to ads on LinkedIn.

Google is also reportedly offering 40,000 scholarships in Vietnam for basic AI courses and $350,000 each for 20 selected AI start-ups, Google Vietnam Managing Director Marc Woo said on LinkedIn last month.