Following the implementation of controversial data storage regulations, Vietnam has opened up its data center market to foreign investors, allowing 100 percent ownership, a development expected to attract major industry players such as: Amazon.com Inc. Amazon Amazon Web Services and Keppel.
what happenedVietnam’s new telecommunications law, which came into force last week, removes foreign investment limits for data and cloud providers, a significant departure from the 49 percent foreign ownership cap in other sectors, the Nikkei newspaper reported.
Moreover, according to the law, the law gives these providers an “unprecedented exception” to the licensing rules, effectively exempting them from normal market entry restrictions. VDB MethodThe change is largely due to other regulations, such as the Cybersecurity Law, which requires companies to store data within Vietnam.
Despite opposition from big tech companies, Meta Platforms Inc. Meta Facebook and Google Parent Company alphabet Google GoogleThe Vietnamese government’s insistence on data localization has led to a surge in demand for local data centers that the domestic market is struggling to keep up with.
“The need to store data locally can increase a company’s operational costs.” Leif SchneiderLaw firm advisor Luther“Additionally, there is the challenge of ensuring that domestic data centers comply with international standards for data security and privacy,” he said, according to the report.
The law states that cloud and data providers are not responsible for content stored on behalf of their customers, but they must block content at the request of competent government agencies. Additionally, companies are prohibited from surveilling information about people who use their services unless requested to do so by the government.
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Why is this important?: The global cloud computing market is undergoing major investments and expansion. For example, Amazon Web Services is in negotiations with the Italian government to invest billions of euros in expanding its data center operations in the country. This move is in line with Amazon’s strategy to strengthen its cloud services across Europe.
Similarly, Google announced it would invest $2 billion to establish its first data centre and Google Cloud region in Malaysia, an initiative aimed at driving Malaysia’s digital ambitions and supporting local businesses and public sector organisations.
moreover, Microsoft MSFT Sweden plans to invest $3.2 billion to strengthen its cloud and AI infrastructure, including training 250,000 Swedes in AI skills, further boosting the country’s digital capabilities.
The demand for advanced data center infrastructure is evidenced by increased investments in: NVIDIA Corporation NVDA Analysts note that for every dollar spent on Nvidia infrastructure, cloud service providers can make $5 on GPU hosting, suggesting a big opportunity in the data center market.
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This story was written and edited with Benzinga Neuro. Kaustubh Bagalkote
