Vietnam's data centers developing fast, but power must keep pace: Experts

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Vietnam is attracting a growing wave of investment in large-scale data centers, but turning that momentum into a regional hub will depend on securing enough power, strengthening international connectivity and providing investors with a stable regulatory environment.

The country has seen a series of data center projects worth billions of dollars this year, drawing increasing interest from hyperscale operators and technology companies looking for new locations as more established hubs in Southeast Asia face constraints over land, electricity and room for expansion.

In February, global technology group G42 and a consortium comprising FPT Corporation, VinaCapital and Viet Thai Group announced a long-term partnership to develop large-scale data center infrastructure in Ho Chi Minh City, with a planned investment of up to $2 billion.

A month later, Accelerated Infrastructure Capital and Kinh Bac City Development Holding Corporation, together with international partners, announced a proposed AI data center project worth about $2.1 billion.

The investment comes as the Asia-Pacific data center market enters a period of rapid expansion.

According to the Asia Pacific Data Centre Investment Landscape 2026 report by Cushman & Wakefield, the region's future data center supply reached a record 26.5 gigawatts in the first half of 2026, up 7.1 GW in just six months, including 4.8 GW under construction and 21.7 GW in the planning stage.

Southeast Asia accounted for about half of the data center capacity under construction in the Asia-Pacific region, making it the region's biggest growth area.

According to Le Ba Tan of Viettel IDC, Vietnam's data center capacity is expected to increase fivefold to sixfold from its current level to nearly 600 megawatts by 2030, and the country is an "attractive destination for investment in next-generation data centers, and these facilities will certainly meet the demand for AI".

Power struggle

The biggest question, however, is whether power infrastructure can keep pace with the growth of AI and data centers.

Andrew Green, head of Data Center Group, Asia Pacific, at Cushman& Wakefield, said investment in AI and cloud computing was accelerating across the region but increasingly constrained by access to electricity.

"Data centers that once clustered around locations with strong network connectivity are increasingly moving toward areas capable of providing large-scale power," he said.

The challenge is particularly important as Vietnam expands its digital infrastructure. The Ministry of Science and Technology of Vietnam said in May that the country had 42 data centers with total designed capacity of about 372.75 MW, more than four times the level in 2021.

Nguyen Manh Cuong, from the Institute of Energy under the Ministry of Industry and Trade, said electricity demand from AI and data centers would continue to rise rapidly.

Data centers currently accounted for about 0.5 percent of Vietnam's total electricity consumption, compared with an estimated 2 to 6 percent in the US, he said, suggesting that demand could rise significantly as the country's AI and digital infrastructure expands.

Cuong warned that unless investment in new generation capacity, particularly reliable baseload and other firm power sources, is strengthened, Vietnam could face electricity shortages as early as 2027.

"As Vietnam is beginning to develop a policy framework to provide different options for supplying electricity to large consumers, the challenge is to ensure that those solutions are commercially viable and capable of providing reliable power over the long term," he said.

Cuong also stressed the importance of ensuring coordinated planning for AI, data center and power development.

Louis Nguyen, chairman of Saigon Asset Management, said Vietnam also needed to create a clear and stable investment environment to attract multibillion-dollar commitments from hyperscale operators.

That should include clearer rules on data sovereignty, privacy, storage, management and cross-border data flows, as well as predictability and stability in the legal framework, he said.

David Jackson, chief executive of Avison Young Vietnam, said Vietnam should focus on improving the regulatory framework, infrastructure and human resources.

Reliable electricity and water for cooling would remain major infrastructure challenges, while digital connectivity needed further improvement and Vietnam still faced shortages of highly skilled workers in data center operations, cybersecurity and systems management, he said.