Ho Chi Minh City has already allocated land and infrastructure for the proposed US$2 billion hyperscale data center project to be developed by a consortium led by Abu Dhabi-based artificial intelligence firm and data center group G42 in partnership with local firms, according to reports, quoting Vietnamese Standing Deputy Prime Minister Nguyen Hoa Binh who visited UAE recently.
G42 has in recent months made the news headlines due to its involvement in Stargate UAE, which will be the first international deployment of the Stargate infrastructure project. The firm owns 60 per cent of Khazna Data Centers – the region’s largest operator with 30 data centers in operation.
G42 had earlier proposed an initial investment of about 70 MW in Ho Chi Minh City in partnership with local firms such as FPT Corp., VinaCapital and Viet Thai Group.
According to reports, there are still scant details about the project.
While there, the deputy prime minister also urged G42 to help in training locals in technology knowhow and assisting in digital platforms to support Vietnam’s plan for an international financial hub straddling HCMC and Danang. In return, Vietnam is committed to expediting approvals and liberalising regulations further.
G42 was represented by Ali Al Amine, its executive vice president.
Several meetings had taken place this year between G42 and Vietnamese firms and government officials in Dubai and HCMC focusing in particular on digital infrastructure and the International Financial Center (IFC) which is reportedly under construction.
Vietnam has since the first nine months of this year seen a surge in investment in its digital infrastructure sector driven by competitive development costs, strong government support, more foreign-friendly laws and surging demand for cloud computing.
According to Cushman & Wakefield Asia Pacific Data Centre Investment Landscape report, the yield-on-cost for data center investments in Vietnam is in the range of 17.5% to 18.8%, just second only to Singapore’s 21% to 23%. The report also noted that Vietnam’s infrastructure shortfall measured by number of persons per MW of colocation capacity is one of the highest in the region exceeding 1.77 million people per MW, compared to the Asia Pacific average of 350,000 people per MW. Even if the figure falls to a projected 700,000 people per MW if all under construction and planned projects are completed, it still falls far short of the Asia Pacific average.
This indicates the market’s early-stage growth and high return potential, the report said.