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Asia expecting increased demand for data centers amid AI boom

Asia expecting increased demand for data centers amid AI boom

The Asian Pacific is expecting a heavy surge in the demand for data centers. This comes in the wake of the boom in the Artificial Intelligence (AI) sector. Microsoft, for one, has committed to invest approximately $2.2 billion in Malaysia in the next four years. Funds are estimated to harvest growth in the AI sector of Malaysia through different services including, but not limited to, skill development and education.

At the center is the expected rise in the demand for data centers. The growth of AI globally has brought the need for better and more data centers. This is linked to the demand for digital infrastructure to support the AI sector. Industry experts have recognized this trend and said that companies and countries are responding to the booming demand for AI, calling for more data capacity.

Asia Pacific region is building on the ground, wherein data center deals hit the milestone of $3.45 billion in the previous year, 2023. Several large transactions are in the pipeline. These have set expectations straight about a higher estimate in 2024. M&A in Asia Pacific has already bagged a total of $840.47 million. This represents more than 50% of the global amount.

What seems best is that the trend in Asia Pacific resembles the trend prevailing in the US and across Europe. Tech giants like Meta and Amazon are looking for ways to expand their AI capabilities. Microsoft is leading the charge. An early commitment by the computer company is scheduled to appear in Thailand. This will be the first Asian data center with investments worth more than $1.7 billion in cloud and AI facilities.

Goldman Sachs Asset Management has reportedly deployed over $1 billion to develop an Asian data center. This comes after it invested in AirTrunk in 2017 and before selling the stake after three years.

AirTrunk is at the center because it owns 11 hyperscale data centers across Australia and other regions. Financial sponsors like BlackStone have expressed their interest in acquiring AirTrunk. The company is currently aiming to achieve a valuation of A$15 billion. This roughly translates to $9.8 billion, making it the most significant data center transaction in Asia this year.

Garren Cronin, the Managing Director of Cadence Advisory, has said that there could be an unprecedented wall of demand for quality data centers as the AI revolution gains pace. Garren added that the new capacity built in the next three to five years will be simply mind-blowing – intensifying the industry in 2024.

The trajectory in Asia Pacific continues to follow the trend prevailing in the US and Europe. The region only has a lot to gain in every possible sense – AI and investment – as the industry grows in the future.

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ToAI Team
Fueled by a shared fascination with Artificial Intelligence, the Times Of AI journalists team brings together various researchers, writers, and analysts. We aim to provide a comprehensive knowledge of AI for a broad audience of the Times Of AI. Through in-depth analysis of the latest advancements, investigation of ethical considerations around AI development, AI governance, machine learning, data science, automation, cybersecurity, and discussions about the future impact of AI across various sectors, we aim to empower readers with the details they need to navigate this rapidly evolving field.

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