UAE tech firm G42, Vietnamese partners plan $2 bln hyperscale data center in southern Vietnam hub

The United Arab Emirates's (UAE) state-backed firm G42 plans to partner with Vietnamese companies to develop a $2 billion hyperscale data center in Vietnam's southern hub Ho Chi Minh City.

Group 42 Holding Ltd (G42) boasts major shareholders including a UAE sovereign wealth fund and Microsoft, while its Vietnamese partners are FPT Corporation, investment fund manager VinaCapital, and Viet Thai Group.

In its proposal to Prime Minister Pham Minh Chinh, the municipal People’s Committee said the project aims to offer comprehensive AI solutions, combined with cutting-edge technological infrastructure, targeting cloud service customers across Asia and globally.

Designed as an "AI factory," the center is expected to drive technological applications across multiple sectors.

Given its strategic importance, the project is anticipated to have a wide-reaching impact on HCMC’s socio-economic development. It is expected to significantly contribute to local GDP growth, enhance the city’s appeal for international investment, and create thousands of high-quality jobs, while also supporting the development of a skilled IT workforce.

However, the committee noted that the investors are facing legal and regulatory hurdles and proposed the Prime Minister consider resolving these issues.

One challenge stems from the inconsistency between domestic and international legal frameworks, especially regarding data monitoring and traceability, it said, adding these inconsistencies could prompt investors to shift to countries with cross-border data storage policies.

Therefore, the municipal People’s Committee proposed implementing a special regulatory framework for projects with international business models, similar to Singapore’s approach.

For instance, Singapore allows cross-border data storage and retrieval, without mandating data to be stored locally. Companies may store data abroad as long as they meet data protection and privacy standards, which supports the operation of cross-border cloud computing systems.

Ho Chi Minh City also recommended a policy to prioritize cloud computing infrastructure over on-premises IT systems to enhance security and compliance with national security standards.

G42, founded in 2018 in Abu Dhabi, is a global leader in AI, cloud computing, and digital infrastructure. Currently, it operates 24 data centers with a total capacity of 204 MW and is a strategic partner of Microsoft. The company plans to increase its data center capacity to 500 MW across six countries by 2029.

In Vietnam, G42 intends to launch intelligent AI platforms, including distributed cloud computing models to boost national revenue and job creation, training programs to enhance digital skills and employment opportunities, and AI applications in public services to improve quality of life.

According to a May report from the Ministry of Science and Technology, Vietnam currently has 41 commercial data centers nationwide, operated by 12 companies, with a total designed capacity of 221 MW.

In April, military-run Viettel began construction on a new data center with a designed capacity of 140 MW, among the top 10 in Southeast Asia. Located in HCMC, the 4-hectare facility will support approximately 10,000 server racks and is expected to begin operations in early 2026. Once completed, it will be Vietnam’s first data center to exceed 100 MW in capacity.

In March, Saigon Asset Management (SAM), a U.S.-based private equity fund led by Shark Louis Nguyen and headquartered in HCMC, announced the launch of its SAM DigitalHub data center project.

The center will be built on a 50-hectare site in the Vietnam-Singapore Industrial Park (VSIP) in former Binh Duong province with a projected capacity of 150 MW and a total investment of up to $1.5 billion. The project will be developed in phases, with the first facility expected to go operational within two years. (HCMC, Ba Ria-Vung Tau, and Binh Duong have been merged to establish new HCMC).

On December 5, 2024, Prime Minister Pham Minh Chinh held a working session with Jensen Huang, founder, president and CEO of U.S. tech giant Nvidia, and witnessed the signing of an agreement between the Government of Vietnam and Nvidia on cooperation in establishing an AI R&D center and an AI data center in Vietnam.

The Prime Minister suggested that both sides collaborate in AI research and development to create a new production force based on Vietnam's AI capabilities in partnership with Nvidia, and outlined several specific directions for cooperation.