Asia-Pacific Data Centers Gear Up for AI-Powered Growth Spurt

Asia-Pacific Data Center Market Faces Exciting Future with AI Computing Growth

The data center market in Asia-Pacific is entering a new era of rapid growth driven by rising demand for digital services, cloud computing, and emerging technologies like artificial intelligence. This article explores the key trends shaping the Asia-Pacific data center industry and how providers are adapting to meet future needs.

Booming Asia-Pacific Data Center Market Projected to Hit $5 Billion by 2028

Multiple reports predict massive growth ahead for the Asia-Pacific data center market. Research firm Renub projects the market will reach $5.35 billion by 2028, representing a 12% compound annual growth rate from 2023-2028.

Mordor Intelligence also forecasts a 10.21% CAGR in computing capacity from 2024-2029. This growth will be fueled by increasing digitization and cloud adoption among enterprises in the region.

China Leads in Number of Data Centers While Singapore, Australia and Hong Kong Attract Global Players

While China currently has the most data centers in Asia-Pacific at 449 facilities, key hubs like Singapore, Sydney, and Hong Kong are emerging as consolidation points for global enterprises.

Singapore accounts for 60% of Southeast Asia's data centers and recently lifted a moratorium on new facilities to prepare for rising AI demand. Sydney has seen surging capacity from hyperscale cloud providers and now exceeds half a gigawatt of IT power.

Hong Kong may become less favored among Western firms due to geopolitical uncertainties.

AI and High-Performance Computing to Drive Next Wave of Growth  

The rise of data-hungry AI applications requiring high-end GPUs will shape the next phase of Asia-Pacific data center expansion. AI spending in the region is projected to hit $784 billion by 2027.

To support these workloads, providers are exploring new locations and designs optimized for AI's demands. Generative AI may decentralize data centers to tier-two cities with abundant, affordable electricity and water.

Singapore and Australia Invest Heavily in AI-Ready Data Centers

Key markets like Singapore and Australia are ramping up investments in new data center capacity and AI-optimized infrastructure to maintain their regional leadership.

With lifting restrictions, Singapore has been revealed as a major buyer of NVIDIA chips to power AI computing. Sydney is seeing new hyperscale cloud data centers with GPUs for machine learning. Both cities are positioning themselves at the forefront of the AI revolution.

The Future Looks Bright for Asia-Pacific Data Centers

The Asia-Pacific data center industry is entering an exciting period of growth and innovation. While China currently leads in overall facilities, strategic markets like Singapore and Australia are attracting global data center players with cutting-edge capacity optimized for artificial intelligence. As spending on AI skyrockets over the next decade, data center providers across Asia-Pacific will need to adapt to meet the computing power demands of this transformative technology.

Our Hot take:

The Asia-Pacific data center market has an exciting future ahead as AI drives a new wave of growth and consolidation around key regional hubs. Providers that invest early in AI-ready infrastructure and strategic locations will be best positioned to capitalize on surging demand. However, sustainability will be a key challenge as power-hungry AI workloads could strain local electric grids. Data center operators will need creative solutions to support AI efficiently and responsibly.