Powering the AI Revolution: The Data Centre Boom in Southeast Asia

TL;DR:

• Southeast Asia’s data centre market is booming, driven by a surge in digitalisation, cloud services, and artificial intelligence (AI) technologies like ChatGPT4.
• The demand for AI-powered services is pushing data centres to increase their power capacity, leading to the emergence of mega data centres.
• Sustainability is a growing concern, with data centre operators focusing on renewable energy sources and green technologies to minimise environmental impact.

The New Gushers: Southeast Asia’s Data Centre Boom

In the digital age, data centres are the new oil rigs, and Southeast Asia is striking gold. The region is witnessing a data centre boom, with massive investments pouring in to power the AI age. Singapore-based data centre operator STT GDC recently secured a whopping S$1.75 billion funding deal with KKR and Singtel, marking the largest digital infrastructure investment in Southeast Asia to date.

This monumental deal is just the tip of the iceberg, as the larger Asian region has seen over US$10 billion (S$13.5 billion) in investments in recent years. This digital feeding frenzy is fuelled by a mix of technology trends, including the rise of social media, smartphone adoption, digitalisation initiatives, and cloud services. However, the real catalyst is the emergence of AI, particularly ChatGPT4, the Generative AI chatbot.

AI and the Rise of Mega Data Centres

“ChatGPT4 is a data centre gamechanger” Ranchit Mohan, head of data centre leasing at JLL Asia-Pacific.

The powerful GPUs required for AI need significantly more power than existing data centres can handle. Jennie Tan, CEO of Singapore data centre construction firm Acme Associates, explained, “We’re talking about a jump from 10 kilowatts per server rack to a whopping 30 kilowatts for AI workloads.”

To meet this demand, Mohan predicts the emergence of mega data centres, each capable of generating 200 to 300 megawatts of power. The cost of building these data centre behemoths is astronomical, which is why he expects even more investment announcements in the future.

Sustainability: The Green Data Centre Challenge

As data centres consume massive amounts of energy and water for cooling, their environmental footprint is a growing concern. Fortunately, most new facilities are turning to renewable power sources. However, achieving true sustainability requires collaboration between operators and clients.

“Sustainability is a must-have, not a nice-to-have” “It’s about adopting a green mindset across the board – from energy recycling to light-saving tech. Only then can we make a real difference.” Acme’s Tan

Southeast Asia’s Data Centre Landscape

The data centre boom extends beyond Singapore, with Malaysia seeing a US$150 million investment from the World Bank’s investment arm to support a data centre development by Yondr Group. Technology giants such as Google (US$2 billion), Amazon Web Services (US$20 billion), and Microsoft (US$3.9 billion combined) are also investing heavily in cloud infrastructure across the region.

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• To learn more about data centres and energy consumption, tap here.