The year 2024 witnessed a significant surge in data center construction and expansion, largely fueled by the rapid advancement and adoption of artificial intelligence (AI) and cloud computing.
AI applications, particularly those involving large language models and machine learning, demand immense computational power and storage capacity. This has led to a dramatic increase in the demand for robust data center infrastructure capable of handling the intensive workloads that drives technology stocks to their record highs.
South-East Asia is becoming a hotspot for AI investments from giants like Nvidia and Microsoft, who plan to inject up to $60 billion into the region. However, local AI startups are not reaping the benefits, with venture capital reaching only $1.7 billion so far, compared to $20 billion in the Asia-Pacific. Investors remain cautious due to concerns about the region’s ability to produce scalable and innovative companies.
The region, home to over 2,000 AI startups, faces challenges from its diverse economic and cultural landscape, making it difficult to create unified data sets necessary for AI growth.
Despite these challenges, Thailand has been one of the key focuses in the region for data center investment. Kicked off in early 2023, the military government, led by Prayut Chan-o-cha, initiated the negotiation with U.S. tech giants such as Amazon Web Services (AWS), Google, Microsoft, Western Digital and Analog Devices. The deal was carried on by Prime Minister Sretta Thavisin and Paetongtarn Shinawatra in the government transition after the general election.
In the latest development, it has been reported that the three tech giants, AWS, Google and Microsoft, are collectively investing around $8.5 billion (approximately 300 billion baht) in Thailand’s data center infrastructure.
The region is experiencing rapid digital growth, with increasing adoption of cloud computing by businesses and individuals, and Thailand could be at the forefront of this development as the Thai government is actively promoting digital infrastructure development and attracting foreign investment in this sector as its geographical location makes it a strategic hub for serving the broader Southeast Asian market.
These investments are expected to have a significant impact on Thailand’s digital economy, creating jobs, driving innovation, and enhancing the country’s technological capabilities.
Major corporations are also adopting the AI usage in their operations to boost performance and results. Despite growing concerns of technology replacing human workforce, companies like SCB X Public Company Limited (SET: SCB) reaffirms job security for its staff as the company is developing AI together with employees to enhance operations with their co-corporations.
