The data center industry in Southeast Asia is experiencing rapid expansion, driven by soaring demands for digital services, cloud computing, and artificial intelligence (AI). Investment in the region’s data centers reached USD 10.23 billion in 2023, with projections expecting this figure to climb to USD 17.73 billion by 2029, reflecting a robust compound annual growth rate (CAGR) of 9.59%. Neighboring Vietnam and Thailand are already witnessing major investments: Vietnam secured USD 460 million in data center FDI in early 2024, while Thailand approved data center projects worth USD 1.8 billion, including major investments from global tech leaders.
Laos: A Strategic Choice for Data Centers
Amidst this booming landscape, Laos emerges as an exceptional candidate for data center establishment, uniquely positioned to become a pivotal hub for data and AI training in the region.
Abundant, Affordable, and Green Energy
Laos boasts substantial hydroelectric power capacity, providing a reliable and renewable energy source essential for energy-intensive operations like data centers and AI training facilities. This abundant green energy not only reduces operational costs but also aligns with global sustainability efforts, increasingly prioritized by tech giants and international businesses. Both Vietnam and Thailand imports electricity from Laos.
Cost-Effective Land and Infrastructure Development
Laos offers competitively priced land, significantly lower than neighboring nations, allowing cost-effective infrastructure development. These savings can be redirected towards advanced technological infrastructure, essential for accommodating extensive computing requirements and future growth.
Robust Regional Connectivity
Strategically located at the heart of Indochina, Laos benefits from terrestrial fiber networks linked directly with China and Thailand. This provides stable, high-speed, and low-latency connectivity, a critical factor for data center operations and AI model training, facilitating seamless integration into broader Asian and global digital economies.
Stable Environment and Government Support
Laos provides a politically stable environment, increasingly supportive of technological innovation. The government’s commitment to digital transformation, evident through proactive infrastructure projects and policy incentives, ensures favorable conditions for investment in data centers and AI development.
Challenges and Opportunities for Laos
Despite these advantages, Laos has not yet become the leading destination for data centers due to certain constraints. Its relatively small population and underdeveloped digital ecosystem, compared to its neighbors, have posed challenges in attracting large-scale technology investments. However, viewing Laos as a regional data hub rather than solely a local market significantly enhances its attractiveness. Leveraging its geographical position, connectivity, and energy advantages allows Laos to transcend these limitations and become an integral part of Southeast Asia’s expanding digital infrastructure.
Laos as an AI Training Hub
The global AI boom necessitates data centers capable of immense computational power. Laos, with its low-cost renewable energy, affordable operational costs, and reliable connectivity, positions itself ideally for AI training. Moreover, Laos’s strategic geographical location makes it attractive as a data aggregation and processing center, enabling efficient AI model training and deployment across the region.
Datacenters in Laos
Laos is steadily advancing its digital infrastructure, with several key data centers playing pivotal roles in this development:
GDMS (Global Digital Management Solutions): GDMS stands at the forefront of cloud and data center services in Laos. They operate the National Cloud, a sovereign solution that integrates the two government-owned National Data Centers, providing a secure foundation for digital services nationwide. GDMS offers a comprehensive suite of services, including colocation, dedicated servers, backup solutions, and various cloud services tailored to meet the needs of businesses and government agencies.
Unitel Data Center: Unitel, a trademark of Star Telecom and a joint venture between Lao Asia Telecom and Viettel Group, is the leading mobile operator in Laos, boasting extensive network coverage. While specific details about Unitel’s data center facilities are limited, their robust infrastructure supports a wide range of telecommunications and data services across the country.
Lao Telecom Data Center: Lao Telecommunication Public Company, commonly known as Lao Telecom, is a major player in the country’s telecommunications sector. They have launched Laos’ inaugural 5G high-speed internet service and showcased advanced technologies, including cloud computing services. This indicates a significant investment in data center capabilities to support their expanding service offerings.
Best Telecom Data Center: Best Telecom Co Ltd. is recognized as one of the key players in the Laos telecom market. In May 2024, they partnered with OCK Group Bhd to construct and lease telecommunications towers, signaling their commitment to enhancing the nation’s digital infrastructure. While specific information about their data center operations is scarce, their involvement in infrastructure projects suggests a role in data hosting and related services.
These organizations collectively contribute to strengthening Laos’s digital landscape, providing essential services that support both public and private sector initiatives.
Conclusion: Investing in Laos’s Digital Future
Laos stands ready to capitalize on Southeast Asia’s data-driven future. Its combination of sustainable, affordable energy, strategic geographic location, favorable governmental policies, and robust connectivity makes Laos not only a prime choice for data centers but also a promising destination for AI innovation and training. Investing now positions businesses at the forefront of regional digital growth, powered sustainably and strategically.
