AI is fuelling an unprecedented surge in data centre demand that Southeast Asia is not yet ready to meet.
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According to a report released by Deloitte on September 10, across Southeast Asia, approximately 397 MW of data centre capacity is expected to go live by 2028. Total capacity will be more than quadruple from 1.68 GW in 2024 to 7.59 GW in the long term.
As of 2024, approximately 46 MW of data centre capacity was in operation in Vietnam. 10 GV of data centre capacity is under construction and expected to go live by 2028.
Other Southeast Asian hubs are gaining prominence. Malaysia, for example, is exhibiting a robust future supply pipeline, with its state of Johor becoming one of the fastest-growing markets. While Singapore currently possesses the largest data centre capacity, its pole position is likely to be supplanted by Malaysia and Indonesia, who are at least in part beneficiaries of the limited land capacity for supply expansion in neighbouring Singapore.
Across industries such as manufacturing, mobility, and logistics, next generation AI applications are starting to replace traditional sensors with high-resolution images, videos, and other data-intensive inputs. These visual applications require immense computing power and low latency networks to work in real time. As a result, the region is seeing a massive spike in data capacity requirements, far beyond what its existing infrastructure can support.
On the back of power-intensive AI requirements, electricity consumption by data centres in Southeast Asia is expected to more than double from 9.8 TWh in 2025 to 22 TWh in 2030. AI data centres utilise GPUs require significantly more power and produce more heat per square meter than traditional data centres utilise central processing units (CPUs).
By 2035, 40-50 per cent of total IT workload demand is expected to be AI-driven. This underscores the urgency for Southeast Asian players to build data centres, not only to retain value within local markets, but also ensure that data and infrastructure remain on shore in a world of growing geopolitical tensions where data is the new currency.
With AI expected to add $1 trillion to regional GDP by 2030 to position Southeast Asia as the world’s fourth-largest economy, it suffices to say that the cost of inaction now far outweighs the cost of action.
Based on Deloitte’s estimates, the total addressable AI market in Southeast Asia will be worth a whopping $65 billion in 2035. Southeast Asian players should consider their value creation activities across all three segments of the AI value chain: application ($30 billion), platform ($10 billion), and infrastructure ($25 billion).
The capital needs to build data centres and other AI infrastructure are staggering. Building a 100-MW AI-ready data centre costs at least $1 billion; this is not to mention the more than $2 billion worth of GPUs and associated supercomputers and connectivity that it will be housing.
The upside for investors is that data centres offer stable cashflows. One MW of AI-ready power can generate $1.5 to 2 million per year and likely comes with a 10-year commitment or more, while one MW of GPU power can generate about $15 million in annual revenue under a GPU cloud model.
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