Google is weighing setting up a "hyperscale" data center close to Ho Chi Minh City, Vietnam's southern economic hub, the source said, declining to be named because the information was not public.

A Google logo at an event in Vietnam, July 2024.

The investment, the size of which the source did not specify, would be a shot in the arm for Vietnam, which has so far failed to attract major overseas capital in data centers due to its patchy infrastructure, with large tech companies preferring to house their centers in rival nations in the region.

It was not clear how quickly Google would reach a decision on an investment, but the source said internal talks were taking place and the data center could be ready in 2027.

A spokesperson for Google declined to comment about the data center plan.

Hyperscale centers are the largest in the industry, with power consumption usually similar to that of a big city.

A hyperscale data center with power consumption capacity of 50 megawatts (MW) could cost between $300 million and $650 million, according to estimates based on data published by real estate consultant Jones Lang LaSalle in a report this year on data centers in Vietnam.

Google's move was motivated by the large number of its domestic and foreign cloud services clients in Vietnam and the country's expanding digital economy, the source said, noting the Southeast Asian nation was one of the fastest-growing markets for YouTube, Google's popular online video sharing platform.

Currently the top data center operators in Vietnam, based on computing space, are industrial investment firm IDC Becamex and telecommunications company VNPT, both Vietnamese state-owned enterprises, according to an internal market report by an industrial park in Vietnam seen by Reuters.

The Nikkei reported in May that Chinese e-commerce company Alibaba was considering building a data center in Vietnam. Alibaba declined to comment on the matter on Thursday when contacted by Reuters.

Google is opening a representative office in Vietnam, and is already hiring dozens of engineers, marketing experts and other professionals, according to ads on LinkedIn.

"We now have a team on the ground to better serve our Vietnam-based advertising customers and support the country's digital transformation," a spokesperson for Google told Reuters.

Google is also offering 40,000 scholarships in Vietnam for basic AI courses and $350,000 each for 20 selected AI start-ups, Google Vietnam Managing Director Marc Woo said on LinkedIn last month.

The company already has a large network of suppliers in Vietnam that assemble its products, including Pixel smartphones.

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Source: VnExpress