The use of generative AI (genAI) is projected to lead to a significant increase in data center server infrastructure and operating costs. A recent forecast by Tirias Research estimates that by 2028, these costs will exceed $76 billion, challenging the business models and profitability of services that incorporate genAI. The report added that this projection incorporates an aggressive 4X improvement in hardware compute performance, but this gain is outweighed by a 50X increase in processing workloads, despite the rapid rate of innovation around inference algorithms and their efficiency.
Smart cost management is crucial for the success of data center operation. It focuses on business needs and an ability to balance the cost of resources with the need for high-performance and reliability. Among the smart cost management strategies shared by industry leaders include optimizing energy consumption, reducing hardware and software costs and leveraging on the support of government initiatives.
There has been a boom in the Asia-Pacific data center industry as the market continue their focus on cost management strategies. A recent report by Research and Markets stated that the Asia-Pacific data center market will reach US$ 53.58 Billion in 2028 and expand at a CAGR of 12% from 2023 to 2028. This growth is fueled by the soaring demand for data center operations and a surge in investment.
Investment experts mentioned that cloud adoption, increasing digitalization, and recent data onshoring regulations are key growth drivers for data center demand which drive large-scale expansion by hyperscalers and enterprise users in the region.
The digital boom in Asia has transformed the region into a vibrant hub of digital innovation and technological advancement. With a large and increasingly connected population, Asia has witnessed remarkable growth in digital technologies, services, and industries.
For Southeast Asia, industry analysts predict that the region will become the center of growth for data centers for global cloud vendors due to the expected demand for data in the growing internet economy. Based on a study led by Google, the online economy is projected to be worth $330 billion in 2025.
