Google considering large data centre in Vietnam, source says, in nation's first by US big tech

[Viet]

The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 10, 2024. REUTERS/Steve Marcus/File Photo Purchase Licensing Rights, opens new tab

• Summary
• Companies
• "Hyperscale" data centre would be in Southern Vietnam, source says
• Google opening office in Vietnam, plans AI training, funding
• Vietnam is far behind regional rivals in data centre industry

HANOI, Aug 29 (Reuters) - Alphabet's (GOOGL.O), opens new tabGoogle is considering building a large data centre in Vietnam, a person briefed on the plans said, in what would be the first such investment by a big U.S. technology company in the Southeast Asian nation.

Google is weighing setting up a "hyperscale" data centre close to Ho Chi Minh City, Vietnam's southern economic hub, the source said, declining to be named because the information was not public.

The investment, the size of which the source did not specify, 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.

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.

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.

Google's move was motivated by the large number of its domestic and foreign cloud services clients in Vietnam and the country's expanding digital economy, the source said, noting the Southeast Asian nation was one of the fastest-growing markets for YouTube, Google's popular online video sharing platform.

Currently the top data centre operators in Vietnam, based on computing space, are industrial investment firm IDC Becamex and telecommunications company VNPT, both Vietnamese state-owned enterprises, according to an internal market report by an industrial park in Vietnam seen by Reuters.

The Nikkei reported in May that Chinese e-commerce company Alibaba (9988.HK), opens new tab was considering building a data centre in Vietnam. Alibaba declined to comment on the matter on Thursday when contacted by Reuters.

GROWTH STRATEGY​

Despite growing demand for digital services from Vietnam's 100 million population, foreign investors in the sector have largely shunned the country because of occasional power shortages, less attractive investment incentives and weak internet infrastructure which relies on a handful of ageing subsea cables, according to industry experts.

In Southeast Asia, Singapore, Malaysia and Thailand are well ahead in the industry, and have attracted far bigger investments from global tech giants.
Google said in May it would invest $2 billion in Malaysia to develop its first data centre and Google Cloud region in the country.

Unattractive regulations on foreign ownership and data localisation have also long been a hurdle, but in a reform approved in November Vietnamese legislators decided to allow overseas data centre operators to retain full ownership.

Vietnam has strict cybersecurity rules and has long clashed with foreign tech companies about storing data in the country – a requirement that it has, however, not regularly enforced.
Undeterred, Google is opening a representative office in Vietnam, and is already hiring dozens of engineers, marketing experts and other professionals, according to ads on LinkedIn.

"We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country's digital transformation," a spokesperson for Google told Reuters.
Google is also 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.

The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones.

 

[Michael]

The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 10, 2024. REUTERS/Steve Marcus/File Photo Purchase Licensing Rights, opens new tab

• Summary
• Companies
• "Hyperscale" data centre would be in Southern Vietnam, source says
• Google opening office in Vietnam, plans AI training, funding
• Vietnam is far behind regional rivals in data centre industry

HANOI, Aug 29 (Reuters) - Alphabet's (GOOGL.O), opens new tabGoogle is considering building a large data centre in Vietnam, a person briefed on the plans said, in what would be the first such investment by a big U.S. technology company in the Southeast Asian nation.

Google is weighing setting up a "hyperscale" data centre close to Ho Chi Minh City, Vietnam's southern economic hub, the source said, declining to be named because the information was not public.

The investment, the size of which the source did not specify, 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.

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.

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.

Google's move was motivated by the large number of its domestic and foreign cloud services clients in Vietnam and the country's expanding digital economy, the source said, noting the Southeast Asian nation was one of the fastest-growing markets for YouTube, Google's popular online video sharing platform.

Currently the top data centre operators in Vietnam, based on computing space, are industrial investment firm IDC Becamex and telecommunications company VNPT, both Vietnamese state-owned enterprises, according to an internal market report by an industrial park in Vietnam seen by Reuters.

The Nikkei reported in May that Chinese e-commerce company Alibaba (9988.HK), opens new tab was considering building a data centre in Vietnam. Alibaba declined to comment on the matter on Thursday when contacted by Reuters.

GROWTH STRATEGY​

Despite growing demand for digital services from Vietnam's 100 million population, foreign investors in the sector have largely shunned the country because of occasional power shortages, less attractive investment incentives and weak internet infrastructure which relies on a handful of ageing subsea cables, according to industry experts.

In Southeast Asia, Singapore, Malaysia and Thailand are well ahead in the industry, and have attracted far bigger investments from global tech giants.
Google said in May it would invest $2 billion in Malaysia to develop its first data centre and Google Cloud region in the country.

Unattractive regulations on foreign ownership and data localisation have also long been a hurdle, but in a reform approved in November Vietnamese legislators decided to allow overseas data centre operators to retain full ownership.

Vietnam has strict cybersecurity rules and has long clashed with foreign tech companies about storing data in the country – a requirement that it has, however, not regularly enforced.
Undeterred, Google is opening a representative office in Vietnam, and is already hiring dozens of engineers, marketing experts and other professionals, according to ads on LinkedIn.

"We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country's digital transformation," a spokesperson for Google told Reuters.
Google is also 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.

The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones.

This is an issue that needs to be approached with caution. National data security must not be in the hands of any foreign country, especially an underlying data platform company like Google. That's why Google withdrew from China that year.

At this stage, foreign companies building data centers in Viet Nam do not bring much benefit to Viet Nam.

1. The data center is an "electric tiger", and the power consumption is very amazing. In China, these data centers are often built in places where clean electricity is abundant. Viet Nam has not yet reached the point of very abundant electricity.
2. The data center does not have much demand for personnel, and it cannot bring a large number of jobs. Large data centers often have core personnel from headquarters, and only a very small number of people are hired locally.
3. The data center will occupy a very large amount of network bandwidth. Of course, if Google builds its own network lines, it won't take up public resources.
4. If Viet Nam allows foreign capital to use the data center exclusively, the Viet Nam government does not have the right to access it. Then, Viet Nam will have very serious data security problems. When it reaches a certain stage, "data extortion" caused by data security will occur.

I do not refer to Google, nor to any Chinese company, including Alibaba. If Viet Nam wants to attract more technology companies to Viet Nam, it needs to carefully study legal issues in advance to avoid being blackmailed by these technology companies in the future.

There have been many similar incidents in China. The Chinese government dealt with the situation urgently at a critical moment to avoid the escalation of the situation.

 

[Viet]

This is an issue that needs to be approached with caution. National data security must not be in the hands of any foreign country, especially an underlying data platform company like Google. That's why Google withdrew from China that year.

At this stage, foreign companies building data centers in Viet Nam do not bring much benefit to Viet Nam.

1. The data center is an "electric tiger", and the power consumption is very amazing. In China, these data centers are often built in places where clean electricity is abundant. Viet Nam has not yet reached the point of very abundant electricity.
2. The data center does not have much demand for personnel, and it cannot bring a large number of jobs. Large data centers often have core personnel from headquarters, and only a very small number of people are hired locally.
3. The data center will occupy a very large amount of network bandwidth. Of course, if Google builds its own network lines, it won't take up public resources.
4. If Viet Nam allows foreign capital to use the data center exclusively, the Viet Nam government does not have the right to access it. Then, Viet Nam will have very serious data security problems. When it reaches a certain stage, "data extortion" caused by data security will occur.

I do not refer to Google, nor to any Chinese company, including Alibaba. If Viet Nam wants to attract more technology companies to Viet Nam, it needs to carefully study legal issues in advance to avoid being blackmailed by these technology companies in the future.

There have been many similar incidents in China. The Chinese government dealt with the situation urgently at a critical moment to avoid the escalation of the situation.

I see no issue. Vietnam is a different case than China. The internet is dominated by US companies. you have google search, mail, youtube, then Microsoft, Apple services. Making those companies to establish datacenters and store use data locally is a standard practice everywhere. China has a very strong domestic internet industry while in Vietnam the companies are not that big.

About power infra, workforce, jobs, security breach, that’s something we can solve. Maybe not today or tomorrow but later. You can’t stop the progress just because of those obstacles.

 

[Michael]

I see no issue. Vietnam is a different case than China. The internet is dominated by US companies. you have google search, mail, youtube, then Microsoft, Apple services. Making those companies to establish datacenters and store use data locally is a standard practice everywhere. China has a very strong domestic internet industry while in Vietnam the companies are not that big.

About power infra, workforce, jobs, security breach, that’s something we can solve. Maybe not today or tomorrow but later. You can’t stop the progress just because of those obstacles.

I'm not against these internet companies setting up data centers in Viet Nam. Rather, it is hoped that Viet Nam must be prepared for data security.

Now, the influence of these mega-Internet companies on the state has surpassed that of government agencies at some level, and they will at some point use this huge influence to interfere with government policies to consolidate their own interests.

Some Internet companies in China have penetrated much of Chinese's lives. Many of their commercial kidnappings disgusted us, but we were helpless. When we wanted the government to come in and deal with it, the government was helpless because these companies had penetrated too deeply and it would take a huge price to deal with them.

Umbrella Corporation in Resident Evil is slowly moving into our real lives!

 

[Viet]

I'm not against these internet companies setting up data centers in Viet Nam. Rather, it is hoped that Viet Nam must be prepared for data security.

Now, the influence of these mega-Internet companies on the state has surpassed that of government agencies at some level, and they will at some point use this huge influence to interfere with government policies to consolidate their own interests.

Some Internet companies in China have penetrated much of Chinese's lives. Many of their commercial kidnappings disgusted us, but we were helpless. When we wanted the government to come in and deal with it, the government was helpless because these companies had penetrated too deeply and it would take a huge price to deal with them.

Umbrella Corporation in Resident Evil is slowly moving into our real lives!

Yes and no. I think Vietnam is better off with a balanced approach. Taking extremes is not good. Not the German way where every shit is allowed nor North Korea where everything is forbidden, uncle Kim controls everything.

I am not sure if the Chinese model is suitable for Vietnam. Maybe not. In Vietnam, Viettel controls the majority of internet, voice and data communication. A company owned by the military. Big data controls everything in your life so you are controlled either ways by big gov or big capital. Make your choice.