Data Centre Boom: The Digital Backbone Powering the Region’s Future

Asia Data Centre Boom Reshapes Digital Infrastructure and Investment Across the Region

The Asia data centre boom is transforming the region’s digital economy. From AI computing to streaming, cloud services, e-commerce, and fintech, demand for scalable, high-performance infrastructure is skyrocketing.

Global tech giants — including Google, Microsoft, Amazon Web Services (AWS), IBM, Meta (Facebook), Apple, Oracle, Tencent Cloud, Alibaba Cloud, Huawei Cloud, and ChatGPT’s parent company, OpenAI — are expanding aggressively across South and Southeast Asia. This surge is positioning the region as a global digital powerhouse, reshaping both technology infrastructure and economic growth trajectories.

Unprecedented Growth and Investment

As of 2025, the Asia-Pacific region operates around 12.7 gigawatts (GW) of data centre capacity, with 3.2 GW under construction and plans for nearly 13.3 GW more in the coming years. The total development pipeline expanded by 2,300 megawatts (MW) in the first half of 2025 alone, underscoring relentless momentum.

By 2030, Southeast Asia’s data centre capacity is expected to triple, reaching between 5.2 GW and 6.5 GW, propelled largely by a tenfold increase in AI workloads from models developed by firms such as OpenAI, Anthropic, Google DeepMind, and Cohere.

Major hyperscalers — Google Cloud, AWS, Microsoft Azure, and Meta AI — along with Asian tech leaders like Tencent, Alibaba, Huawei, and NTT Data, have committed nearly $240 billion to building next-generation facilities. The Southeast Asian market value is projected to climb from $13.7 billion in 2024 to $30.47 billion by 2030, at a CAGR exceeding 14%.

Highway to Hyperscale: Regional Hotspots

India

India’s rapid digitalisation makes it a cornerstone of the Asia data centre boom. New projects are proliferating across Navi Mumbai, Chennai, Bengaluru, Delhi-NCR, Pune, Hyderabad, Visakhapatnam, and Kolkata.

While Navi Mumbai remains the largest hub, Chennai’s coastal access and subsea cable links have turned it into a preferred hyperscale location. Major players like Google, Microsoft, Amazon, IBM, Oracle, and AdaniConneX are building or leasing large campuses.

India’s southern corridor — spanning Tamil Nadu, Andhra Pradesh, and Telangana — benefits from renewable energy access and favourable state policies. Google’s $15 billion AI facility in Andhra Pradesh and Tata Consultancy Services’ $6.5 billion data centre network highlight India’s emergence as a global infrastructure leader.

Malaysia

Malaysia has become Southeast Asia’s fastest-growing data centre hub, surpassing Singapore in active project pipeline capacity. Johor Bahru, located near Singapore, has become a magnet for global hyperscalers like AWS, Google, Meta, and IBM, which now view it as an extension of Singapore’s digital capacity.

Government policies encouraging green data infrastructure, combined with affordable land and reliable utilities, have positioned Malaysia to host both AI and cloud computing clusters supporting regional operations for Netflix, TikTok, and Zoom.

Thailand

Bangkok is solidifying its place as a regional data centre powerhouse, accounting for 38% of Southeast Asia’s total capacity. Incentives from the Thai Board of Investment, robust energy availability, and a strategic location have drawn major commitments from AWS, Google Cloud, Alibaba, and Huawei Cloud, with new campuses designed to support regional AI and IoT applications.

Vietnam and Indonesia

Vietnam and Indonesia are witnessing explosive growth in data infrastructure. Ho Chi Minh City, Da Nang, and Greater Jakarta are central to this expansion, driven by digital-first economies and the presence of Microsoft, AWS, Google, Tencent, and local operators like Indonet and VNPT.

Despite challenges with grid capacity and network latency, both countries are becoming attractive alternatives for hyperscalers seeking scalable and affordable growth regions.

Construction & Infrastructure Boom

The physical construction surge is the foundation of the Asia data centre boom. Engineering and real estate developers are racing to deliver massive hyperscale campuses across the region.

Land and Cross-Border Spillover

With land scarcity in Singapore, global tech firms like Google, Meta, Apple, and Microsoft are shifting capacity to Johor Bahru (Malaysia), where land and power are more accessible. Johor’s pipeline has grown sharply, serving as Singapore’s secondary zone for hyperscale expansions.

Modular Construction and Speed-to-Market

Developers are deploying prefabricated modular data centre units to cut build times and standardise components. Firms such as ST Telemedia, Keppel DC, and NTT Global Data Centers are adopting this model to ensure faster rollouts for their hyperscaler clients.

Power, Cooling, and Utility Infrastructure

Massive construction projects require reliable grid connections, redundant power lines, and high-efficiency cooling systems. Contractors are integrating renewable energy, liquid immersion cooling, and heat reuse systems to meet sustainability targets demanded by clients like Google, Meta, and Microsoft.

Supply Chain and Local Impact

The boom has spurred growth in construction, electrical equipment, and local labour markets. Regional contractors are partnering with global engineering firms such as AECOM, Turner & Townsend, and WSP. Demand for materials — from cement and steel to fibre optics and transformers — continues to rise sharply, supporting local economies in Bangkok, Chennai, and Jakarta.

Business & Investment Model Shift

The Asia data centre boom is reshaping business models. Developers and investors are increasingly building data centres to lease to end users such as Google, Meta, OpenAI, IBM, Microsoft, Oracle, TikTok, Netflix, and ByteDance.

Build-to-Suit and Colocation Leasing Models

The market now favours two key formats:

Build-to-suit campuses: Single-tenant projects tailored for hyperscalers like Google, AWS, or Microsoft Azure.
Wholesale colocation leasing: Multi-tenant sites where developers lease space, power, and network access to clients including IBM, Oracle, and Alibaba Cloud.

This dual model accelerates market entry for tech firms while offering developers predictable, long-term lease revenue.

Institutional Investment and REIT Participation

Institutional investors are pouring billions into data infrastructure. Blackstone, Brookfield, Macquarie, and Bain Capital have launched infrastructure funds targeting Asia. Publicly traded REITs like Digital Realty, Equinix, and Keppel DC REIT are expanding footprints in Malaysia, India, Thailand, and Indonesia, driving liquidity and professionalising the sector.

Market Responses to Capacity Constraints

Land and energy limitations in Singapore and Hong Kong have redirected expansion to secondary hubs — including Johor Bahru, Batam, Bangkok, Ho Chi Minh City, and Hyderabad. Governments are offering tax breaks, green incentives, and renewable power access to attract developers catering to global tenants such as Apple, OpenAI, and Netflix.

The AI Imperative and Digital Demand

The rise of artificial intelligence and machine learning has amplified infrastructure requirements across Asia. AI workloads from companies like OpenAI, Anthropic, Google DeepMind, and IBM Watson require 500x more computing power than conventional IT by 2030.

Data centre expansions specifically designed for AI and GPU-heavy workloads have surged tenfold. Simultaneously, the region adds 125,000 new internet users daily, fuelling demands for cloud storage, edge computing, and streaming bandwidth across platforms such as YouTube, Disney+, Amazon Prime Video, and Hotstar.

Sustainability and Infrastructure Challenges

While the growth is unprecedented, sustainability remains a critical challenge. Data centres consume vast amounts of energy and water, particularly in India, Indonesia, and Vietnam.

Governments and operators are adopting renewable energy, hydropower, and solar grid tie-ins to mitigate impact. Malaysia leverages its hydropower base, Thailand targets 30% renewable energy by 2037, and India promotes green corridors for hyperscale zones.

However, balancing rapid growth with grid capacity and resource efficiency remains key to maintaining the region’s competitive edge.

Leading Players Driving the Boom

Google Cloud, Microsoft Azure, AWS, Meta AI, IBM Cloud, Apple, OpenAI, Oracle, Alibaba Cloud, Tencent Cloud, Huawei Cloud
Infrastructure and Colocation Providers: Equinix, ST Telemedia, NTT Global Data Centers, Keppel DC REIT, AdaniConneX, CtrlS, and Bharti Airtel Nxtra
Investors and Funds: Blackstone, Brookfield, Macquarie, Bain Capital, GIC, and Temasek
Streaming & Content Platforms: Netflix, YouTube, Disney+, TikTok, and Amazon Prime Video

These companies collectively define the Asia data centre boom, blending technology, investment, and construction at an unprecedented scale.

Looking Ahead: Asia’s Data Centre Dominance

By 2030, the Asia-Pacific’s data centre capacity is projected to surpass 29 GW, potentially rivaling North America and becoming the world’s second-largest market. The Asia data centre boom represents not just a technological milestone but a digital infrastructure revolution, unlocking regional innovation, sustainability, and growth.

The decade ahead will test how effectively Asia can manage energy use, space, and resilience — while continuing to serve as the digital backbone for the world’s AI-powered future.