After long being considered a tech hinterland, Southeast Asia is now the next big thing in the AI world. Tech giants are pouring billions into infrastructure in the coming years into the region. This shift is massive for a region previously avoided by investors due to its limited technology infrastructure.
With these recent developments, Southeast Asia’s potential in the AI sector is skyrocketing. By 2027, it’s expected to become the second-largest data center hub outside the US, right after China, according to Morgan Stanley.
Why is Southeast Asia Becoming a Data Center Hub?
Southeast Asia’s rise as a data center hub is fueled by its low production costs and a strong position in the global semiconductor supply chain. Beyond that, according to EY, the region’s steadily growing digital economy is also a significant factor. The demand for digital services and connectivity is booming, thanks to rapid advancements and the adoption of technologies like 5G, AI, and cloud computing.
Who’s Benefiting from All This?
As the spotlight shines on Southeast Asia, companies in IT services, telecommunications, and semiconductors are reaping the benefits. Here are some of the big winners across the region, according to Bloomberg:
1. Malaysia
In Malaysia, the two companies are Tenaga Nasional and YTL Power. As Malaysia’s sole grid operator, Tenaga Nasional Bhd. is set to see its profits double in three years due to increased power demand. Its investments in renewable energy are also boosting its appeal, with the stock rising significantly this year. On the other hand, Malaysian utility firm YTL Power International Bhd. has seen its shares double since signing an agreement with Nvidia Corp. to build an AI data center in Johor.
2. Thailand
Delta Electronics Thailand PCL, a leading power module supplier for data centers and electric vehicles, is poised to benefit from the AI data center expansion in ASEAN, driven by customer needs for reliable supply chains and cooling solutions.
Thailand’s Gulf Energy Development PCL is another power producer likely to benefit from rising electricity demand and expanding data center infrastructure. The company is well-established in the energy and infrastructure sectors, with numerous green energy projects and a wide business network.
3. Vietnam
FPT Corp, Vietnam’s largest listed technology company has seen its shares rise nearly 40% this year, partly due to its partnership with Nvidia. Strengthening strategic ties between Vietnam and the US are also helping FPT move up the technology value chain.
Wrapping It Up
Tech giants have started to treat Southeast Asia as the next big thing, attracting a surge of investments. This trend is positioning Southeast Asia as a significant player in the global tech arena. For general investors, the AI boom in Southeast Asia presents an exciting opportunity to get in on the ground floor of a rapidly developing market.
As the region becomes a major player in AI and data centers, companies involved in these sectors are likely to see substantial growth. This offers a huge opportunity for investors to capitalize on the booming potential of Southeast Asia’s tech landscape.
So, Finance Buddies, that’s the discussion about the AI Boom in Southeast Asia. Do you want to keep getting the latest updates in the financial world like this? Keep an eye on the Invlinic blog! There will be more information about financial planning, investment, trading, and the latest updates in the financial world.
