Southeast Asia Becomes Core of AI Infrastructure... Global Big Tech Companies Flock In

[Financial News Hanoi (Vietnam)·Seoul=Bu Tuy Tien Correspondent·Kim Jun-seok·Goo Ja-yoon Reporter] Southeast Asia, once called the 'factory of the world', is now transforming into a 'global AI infrastructure-based advanced heart'. With the recent AI transformation of industries, cloud supremacy competition, and geopolitical risks intertwined, global companies like Google, Amazon, and Nvidia, as well as domestic IT companies, are continuously selecting Southeast Asia as a future investment destination.

■KT helps Vietnam's digital transformation

According to KT and local sources in Vietnam on the 27th, KT signed a strategic partnership for AX cooperation with Vietnam's Viettel Group on the 26th. The signing ceremony held at the headquarters of Viettel Group in Hanoi, Vietnam, was attended by Kim Young-seob, CEO of KT, and Tao Duc Thang, Chairman and CEO of Viettel Group. Viettel Group is a global telecommunications and technology company providing various services to 138 million customers in 11 countries, including Southeast Asia, Africa, and Latin America. Last year, it recorded sales of about 7.34 billion dollars and is transitioning from a telecommunications company to a 'TechCo' focusing on next-generation technologies such as AI, cloud computing, and cybersecurity.

Accordingly, KT and Viettel Group will cooperate in six key areas: △AX consulting △AI business development △Consumer and SME solutions launch △AI data center and cloud infrastructure △AX capabilities and global development center △Joint market entry. The practical business cooperation scale between the two companies is about 130 billion won, aiming to grow AX business capabilities together and promote joint ventures (JV) to foster comprehensive AX in Vietnam and Southeast Asia. KT plans to actively utilize local excellent AX and IT personnel through the Global Development Center (GDC) in Hanoi for AI cooperation with Vietnam.

Kim Young-seob, CEO of KT, expressed his commitment, saying, "With this partnership, we will support Viettel Group's successful AX transition by fostering AX consulting and AI experts and promote comprehensive innovation in Vietnam and Southeast Asia," and "KT will accelerate the growth of the AX business in domestic and global markets as an 'AI innovation partner'."

■Samsung, LG, and Naver also invest in Southeast Asia

In addition to KT, major domestic IT companies are expanding into Southeast Asia. Samsung SDS has secured a stake in Vietnam's CMC, a system integration (SI) and IT infrastructure service company, participating in major decision-making.

LG CNS officially launched a joint venture 'LG Sinar Mas Technology Solutions' with Indonesia's Sinar Mas Group last year. It is promoting businesses such as advanced data center consulting and construction/operation and cloud transition. It aims to gradually expand to smart city and financial IT services for broad DX services.

LG CNS is also carrying out projects in Indonesia, such as △Nusantara New Capital Smart City Design Consulting △National Tax Administration System (CTAS) construction △Jakarta metropolitan area light rail equipment project. Naver opened a programming center in Ho Chi Minh, Vietnam, in 2022. Naver is also accelerating the development of a large language model (LLM) based on the Thai language with a local Thai company.

An industry official said, "Southeast Asia is an attractive investment destination for global IT companies due to its low land costs and abundant IT talent pool," and added, "The fact that the Southeast Asian region is a neutral and stable investment destination that can avoid geopolitical uncertainties also played a role."

■Global big techs like Google and Amazon are active as well

Malaysia is emerging as a 'data tropical front'. Big tech companies like Google (investment of 2 billion dollars), Amazon Web Services (AWS, 6 billion dollars), and Microsoft (MS, 2.2 billion dollars) have announced additional investments, and by 2028, it is expected that 5 gigawatts (GW), equivalent to one-fifth of the total data center capacity in the Asia-Pacific region, will be concentrated in Malaysia. The attractiveness was enhanced by the low electricity rates and the water price of 0.37 dollars, the lowest among Asia-Pacific countries.

Thailand is also catching up. Google plans to invest 1 billion dollars in Thailand to expand cloud infrastructure and build a data center.

Nvidia has designated Vietnam as its 'second base'. Jensen Huang, CEO of Nvidia, highly evaluated Vietnam's AI industry potential and announced plans to expand cooperation on semiconductor and AI development with Vietnam. Nvidia has agreed to open an AI R&D center in Vietnam. Google is also eyeing the Southeast Asian market by opening a hyperscale center (large-scale data center) near Ho Chi Minh.

rejune1112@fnnews.com