A consortium of G42 Technology (major shareholders include the sovereign wealth fund of the United Arab Emirates and US-based Microsoft), FPT Corporation, VinaCapital investment fund, and Viet Thai Investment Group, is behind the proposal.

“The project is designed to provide comprehensive AI solutions and advanced infrastructure for cloud service users across Asia and the globe,” according to the report, which was submitted to the PM on July 6.

It also stated that the centre could have a broad socioeconomic impact for Ho Chi Minh City.

“It is expected to make significant contributions to GDP growth, enhance foreign investment attraction, create thousands of high-quality jobs, and support the development of the city’s IT talent pool,” it said.

However, the report also cited that the proposed investors are currently facing several legal and regulatory challenges due to discrepancies between Vietnam’s legal framework and international standards, particularly certain data-related regulations that may pose risks and barriers for international clients of the project. “These include limitations on expansion due to reliance on global data systems and Vietnam’s current data monitoring and retrieval procedures. As a result, investors may be inclined to shift their investments to countries with more favourable conditions,” it said.

Therefore, the city has asked the prime minister to consider allowing the application of special mechanisms for projects with international business models, similar to policies currently being implemented in Singapore.

According to the city, the project is intended to serve Vietnam and international markets, with the goal of positioning Ho Chi Minh City as a leading tech business hub in Asia.

Currently, inconsistencies between domestic and international legal frameworks, particularly regarding data regulations, pose risks and barriers for the project’s international clients. These restrictions on global data systems and Vietnam-based monitoring and traceability processes could limit expansion and may prompt investors to shift their focus to countries that allow cross-border data storage.

The city has also proposed giving priority to cloud infrastructure over on-premises systems. Specifically, it has asked the PM to consider issuing a policy prioritising the use of cloud computing infrastructure instead of on-premises IT infrastructure, to improve security and align with national security standards.

The People’s Committee has also proposed a dedicated working session with the PM and the investors to present in detail the challenges and policy recommendations to remove barriers for the project.

According to the committee, G42 has grown into a global AI solutions, infrastructure, and cloud computing leader since its establishment in 2018 in Abu Dhabi (UAE).

It currently operates 24 data centres with a total capacity of 204MW and is a priority partner of Microsoft. The group aims to expand to 500MW of data centre capacity across six countries by 2029.

In Vietnam, G42 plans to roll out AI through a number of initiatives, including a “Cloud Dividend” model to quantify national revenue growth and job creation across specific regions, upskilling and employment access, improving public services, and enhancing quality of life for citizens.

According to a report released by Cushman & Wakefield Vietnam in June, Vietnam is one of the top 10 emerging markets in Asia-Pacific for data centre attraction, with a target development capacity of over 92MW and an estimated capital investment need of $640 million over the next five to seven years.

Bui Trang, country head of Cushman & Wakefield Vietnam, stated that Vietnam's appeal is proven by interest and investment plans from major global and local players such as Huawei Cloud, Alibaba, NTT, Gaw Capital, Worldwide, STT, CMC, Saigontel, Viettel, Vingroup, and FPT. The trend of partnerships between international developers and local enterprises is also clearly noted.

"This achievement is driven by competitive advantages in construction costs and land prices, a strategic geographic location, and a growing focus on renewable energy projects,” shared Trang.

As of the first quarter, the average asking rent for industrial land in the south and the north reached $177per sq.m per lease term and $132 per sq.m per lease term, respectively. This represents an increase of 3-5 per cent annually, reflecting a stable and competitive industrial real estate market, she said.

To fully capture its potential, Trang emphasised the importance of the government continuing to improve digital infrastructure, ensure a stable power supply, and create a favourable policy framework to encourage the expansion and sustainable development of data centres.

Source: Vietnam Investment Review