Data centers face energy challenge in AI era

Experts at Innovation Day 2025, hosted by Schneider Electric, compared data to “blood” and data centers to the “heart” of digital infrastructure. The event focused on delivering clean energy efficiently so that data centers can support AI workloads.

According to Markets and Data (Singapore), Vietnam’s AI market is forecast to grow by an average of 15.8% and reach US$1.52 billion by 2030. By 2040, AI could contribute up to $130 billion to the country’s economy.

AI is increasingly integrated into daily life, from mobile apps and airport biometric systems to smart-building sensors that manage temperature and lighting. Industries including manufacturing, finance, education, healthcare and transportation are adopting AI, accelerating digitalization and sustainable growth.

“The AI innovation wave is creating significant opportunities in Vietnam and across the region,” said Dong Mai Lam, Cluster President for Schneider Electric in Vietnam and Cambodia.

However, opportunities always come with challenges. With the exponentially growing demand for AI adoption, two core requirements for digital infrastructure, especially data centers, must be met: sufficient computing capacity and sustainable energy for large-scale consumption.

The International Energy Agency (IEA) estimates that energy demand in ASEAN will grow roughly 3% per year through 2030. AI is a major factor: a basic AI query can consume around ten times the energy of a standard web search.

At the event, Tran Van Khai, Deputy Chairman of the National Assembly Committee for Science, Technology and Environment, said Vietnam’s authorities recognize digital infrastructure’s critical role in socio-economic governance.

The authorities have identified data centers and digital infrastructure as the heart of digital transformation and as the essential foundation for technology innovations such as AI, the Internet of Things…

“Digital infrastructure is and will continue to be prioritized for investment, staying ahead of the curve to create the foundation for socio-economic development,” said Tran Van Khai.

In his presentation at the event, Dong Mai Lam pointed out that AI is a key driver of rising electricity consumption in data centers. From 8% in 2023, AI is projected to account for 15–20% of total capacity by 2028, meaning that for every 5 kWh used in a data center, at least 1 kWh is dedicated to AI.

“To keep pace with the AI wave, we need a revolution in building and operating data centers,” emphasized the Schneider Electric representative.

Schneider Electric is helping data centers build comprehensive solutions known as “grid to chip, chip to chiller.”

Firstly, Schneider Electric offers AI-powered sustainable data center design solutions, utilizing digital platforms such as ETAP, EcoStruxure IT Designer, and EcoConsult, along with in-depth electrical system analysis.

The next step is to equip a high-performance, AI-ready electrical system, from low-voltage and medium-voltage switchgear and electrical cabinets and Galaxy 3-Phase UPS to energy management solutions such as EcoStruxure Power Monitoring Expert and Power Operation, etc., to ensure stable, safe, and reliable power for AI loads while maximizing performance.

“It’s easier to save 5% more electricity than to add 5% more capacity to the grid,” said Lam.

Third, Schneider Electric offers hybrid cooling solutions that integrate air and direct liquid cooling, allowing flexible interchange between data center zones. There are also high-temperature chiller solutions and “free cooling” systems that use ambient air for natural cooling, helping to reduce power consumption.

Finally, to ensure safe and sustainable operations, the company provides the Aveva Unified Operations Center for centralized management, cybersecurity software and services, and the EcoCare after-sales support program.

These solutions serve as the layer of protection throughout the entire lifecycle of data center operations.

Schneider Electric emphasized that these components form a customizable, integrated infrastructure that can be adapted to different scales and customer needs.

“We are ready to transfer technology and collaborate closely with Vietnamese partners and customers to build a robust, AI-ready digital infrastructure,” Lam said.

One showcased example is a prefabricated/modular data center model displayed at the National Achievement Exhibition on Sept. 2, 2025.

The modular approach can speed deployment and simplify scaling as demand grows. “We plan to bring this model to Vietnam, collaborate with local partners, and build modules locally,” Lam said.

Schneider Electric leader said Vietnam is well positioned to attract hyperscale data-center investment. ACB Securities’ 2025 Data Center Market Overview projects market value rising from $561 million in 2022 to $1.04 billion by 2028, supported by lower costs, improving 5G and fiber networks, and government initiatives.

However, Lam pointed out the absence of hyperscale data centers in Vietnam..

From an investor perspective, Tran Thanh Hai, Deputy General Director of Energy and Infrastructure at VinaCapital, said that hyperscale data centers are the niche this fund is focusing on.

“With concerted effort, Vietnam should soon host its first hyperscale data center, followed by more entries that will help the market mature,” Hai said.

Regionally, Hai said some investors have shifted focus away from Singapore, constrained by land and energy limits, to destinations such as Johor Bahru in Malaysia. However, the limited availability of clean electricity to serve green data centers has dampened the wave of investment in Malaysia. Vietnam’s relatively competitive land and labor costs, combined with sizable clean-power reserves, could make it an attractive alternative, provided stable renewable generation is available.

“If Vietnam can mobilize abundant, stable renewable electricity, it will have a major advantage in attracting hyperscale data center investment,” Hai said.

Speakers at Innovation Day 2025, representatives from government, business and investment sectors, agreed the challenge requires collaboration.

According to Lam, Schneider Electric is collaborating with more than 1 million partners worldwide, creating an ecosystem that drives electrification and digitalization. In Vietnam, the company has hundreds of strategic partners committed to supporting local customers in building AI-ready infrastructure.

Content by Thy An
Designed by Schneider Electric
Photos courtesy of Schneider Electric