Forget oil rigs, data centres are the new gushers in Asia. STT GDC, a Singapore data centre operator, just struck a massive S$1.75 billion funding deal with KKR and Singtel, marking the biggest digital infrastructure investment in Southeast Asia to date.
This follows a wave of investments across the larger Asian region, totalling more than US$10 billion (S$13.5 billion) – a sign that its data appetite is growing faster than ever.
What’s driving this digital feeding frenzy? The answer lies in a potent cocktail of technology trends.
The rise of social media, smartphone adoption, digitalisation initiatives and cloud services have already fuelled data centre demand. The real game-changer, however, is the emergence of artificial intelligence, particularly ChatGPT4, the Generative AI chatbot.
“ChatGPT4 is a data centre gamechanger,” said Rachit Mohan, who heads data centre leasing at JLL Asia-Pacific.
“Those powerful GPUs needed for AI require a ton of juice, way more than existing data centres can handle,” he added.
“We’re talking about a jump from 10 kilowatts per server rack to a whopping 30 kilowatts for AI workloads,” said Jennie Tan, the chief executive officer of Singapore data centre construction firm Acme Associates.
To meet this demand, Mohan said there will emerge mega data centres, each capable of generating a 200 megawatts 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.
The larger Asia region is already a hotbed for data centre investment, capturing 24 per cent of the global pie over the past five years between 2019 and 2023.
And with the global data storage capacity projected to balloon by 18.5 per cent annually between now and 2027, the demand for these server sanctuaries is only going up.
But there’s a catch – sustainability. Gobbling up massive amounts of energy and water for cooling, data centres leave a hefty environmental footprint.
The good news is that most new facilities are switching to renewable power sources, thus starting on the right foot. However, achieving true green nirvana requires a team effort, with both operators like STT GDC and their clients working together to minimise their environmental impact.
“Sustainability is a must-have, not a nice-to-have, said Acme’s Tan. “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.”
Looking beyond Singapore, the data centre boom is echoing across Southeast Asia as well. In May 2023, Malaysia saw 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 pouring billions into cloud infrastructure across the region.
One thing’s for sure: Southeast Asia’s data centres are powering the AI revolution, and the race to build the biggest, highest-performing data centres is just getting started.
CORRECTION at 27/06/2024, 10:52am: An earlier version of the story misspelt Rachit Mohan’s name. This has been corrected. We are sorry for the error.
