Piyush Jain, Executive Director, Monitor Deloitte. Views and opinions expressed are individual and do not represent Deloitte.
Where will the next billion dollars of AI infrastructure be built? The answer may not only be Silicon Valley, or only China, but Southeast Asia, where regulatory momentum and geopolitical tailwinds are converging. By 2030, data centers powered by AI could consume more than twice the electricity demand of today’s facilities. Southeast Asia is positioning itself not just as a beneficiary, but as a serious contender and active construction and monetization zone for this new wave of infrastructure.
Recent global tariff uncertainties could amplify this trend. In response to rising geopolitical friction, many are turning to markets with fewer restrictions, freer trade flows and more scalable opportunities. Southeast Asia increasingly fits the bill: abundant land, renewable energy potential, competitive labor costs and a growing investor base make it an appealing destination for AI-driven infrastructure expansion.
But being in the right place at the right time is not enough. I believe whether Southeast Asia becomes a leading hub or a supporting node will depend on the decisions governments and enterprises make in the next two to three years.
The Foundation And Infrastructure For AI
Building for AI demands a rethinking of core infrastructure across five domains: power, connectivity, data centers, cooling and governance. LLMs and foundation models require GPU clusters that exert pressures very different from conventional data center workloads. Cooling systems alone account for over a third of total power consumption in these environments. These systems also depend on fast, redundant fiber connections to ingest and process massive volumes of data with low latency.
In parallel, regulatory frameworks must evolve. Many governments are beginning to understand that digital infrastructure cannot be treated as an ancillary service, as it has been in the past. Today, it’s a key factor in national competitiveness, intertwined with energy strategy, trade policy and industrial development.
Southeast Asia’s Strategic Position
The diversity of approaches across Southeast Asia presents investors with a portfolio of differentiated opportunities:
Malaysia is emerging as a standout beneficiary of the AI infrastructure boom. Johor, the southern state adjacent to Singapore, has become one of the fastest-growing digital infrastructure markets in Asia. With over 1.2 GW of planned capacity and proactive government policies, such as the Green Lane Pathway to accelerate build approvals, Malaysia is capturing an increasing share of hyperscaler interest. The country’s lower power costs, renewable energy potential and land availability make it an attractive build location for AI-ready data centers.
Singapore, despite its land and energy constraints, remains Southeast Asia’s most mature market. Its dense concentration of subsea cables and political predictability has long attracted regional headquarters and high-value deployments. After a temporary moratorium on data center development in 2019, Singapore recalibrated and now offers a carefully controlled expansion path focused on green energy and energy efficiency. Singapore’s Digital Infrastructure Act and strict energy usage guidelines reflect a growing recognition that digital infrastructure must be treated like critical national infrastructure.
Thailand is competing on power economics and clean energy. In early 2024, followed by additional announcements in 2025, the government defined new national goals to reduce power costs and expand direct renewable energy purchase agreements. These are clear signals aimed at attracting hyperscalers and AI infrastructure investors. Several multibillion-dollar data center projects are already in development, with Microsoft and Google among the firms exploring local expansions. Crucially, these initiatives are aligned with Thailand’s broader energy strategy, which targets over 50% renewable energy capacity by 2037.
Indonesia, Southeast Asia’s largest economy, offers unmatched demand-side fundamentals: a population of more than 280 million and a surging digital economy. Jakarta’s data center market is projected to grow at almost 17% CAGR. Multinationals like NTT and Microsoft are investing heavily, with fiber buildouts and new cable landings supporting a shift from single-campus deployments to regional data infrastructure. While permitting and policy execution remain hurdles, Indonesia’s geothermal resources and resource base offer long-term upside for green, AI-ready facilities.
What Business Leaders Need To Understand
In my work advising governments and corporate leaders across the region, three priorities consistently emerge:
1. Energy is the first gate. Access to competitively priced, reliable and renewable power is now a gating criterion for AI deployments. High-density compute reshapes the economic model for data centers. Without predictable energy inputs—secured through green tariffs, direct PPAs or national frameworks—otherwise viable builds become untenable. In Southeast Asia, energy strategy is often the make-or-break factor.
2. Connectivity defines viability. AI applications are bandwidth-intensive. Training and inference at scale require low-latency connections to cloud zones, high-throughput links to data lakes and well-developed integration into national and international fiber networks. Subsea landing stations and cross-border interconnects are now critical pieces of infrastructure strategy. Data centers built without this context risk becoming isolated nodes in an otherwise connected world. Diversity in cable paths is now a risk management issue.
3. Planning must be ecosystem-driven. AI infrastructure does not succeed in a vacuum. Enterprises need enabling conditions: supporting cloud infrastructure, developer talent, efficient permitting process and alignment with data governance frameworks. Governments play a key role here, aligning regulations with these needs and ensuring local infrastructure (such as power, water, fiber) scales with demand. Engaging in public-private dialogue is the most effective way to make sure an investment plan meshes with national digital agendas.
Embracing A Once-In-A-Generation Opportunity
The momentum in Malaysia, the careful recalibration in Singapore, the bold policy shifts in Thailand and the rising investments in Indonesia all paint a picture of a region on the cusp of transformation. But the window will not stay open forever. Other parts of the world are also vying to host the data centers and innovation ecosystems of the future. For executives, the message is clear: Engage with Southeast Asia’s digital infrastructure, or risk missing out on one of this decade’s defining growth stories.
The views expressed in this article are those of the author and do not necessarily reflect the views of his employer.
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