Powering ASEAN's Digital Future: Data Centres as Strategic Infrastructure for Growth and Sovereignty

Southeast Asia stands at a pivotal crossroads: to be architects of its digital future or outsource the development of its digital backbone. The answer lies not in the mere pace or scale of data centre growth, but in how deeply these investments are integrated into national competitiveness strategies.

The region's digital economy is entering a defining decade. Projected to approach US$1 trillion by 2030, its growth is fuelled by surging internet use, a young and tech-savvy population, and the rapid rise of cloud services, AI and e-commerce. From banking and logistics to healthcare and smart cities, digitalisation is reshaping how societies connect, learn, and grow.

At the heart of this transformation are data centres – no longer peripheral technical facilities, but strategic assets critical to ASEAN's economic sovereignty, innovation capacity, and long-term resilience.

A Foundation for Economic Multiplier Effects

Across Asia-Pacific, there are now more than 1,800 data centres with 12.2 GW of live capacity, a figure expected to more than double by 2028. Within ASEAN, markets such as Malaysia, Indonesia, and Thailand are among the fastest-growing, projected to reach compound annual growth rates of 32 to 56% in capacity expansion between 2023-2028.

This momentum mirrors the broader digital economy. Indonesia's, for example, is projected to exceed US$130 billion by 2025, driven by 79.5% internet penetration and a vibrant tech ecosystem. Thailand has seen its data centre capacity grow more than twentyfold between 2019 and 2024, with Bangkok now the region's second-largest market after Johor.

Data centre development also drives employment, creating high-value jobs across construction, engineering, and operations. In Malaysia alone, nearly 31,000 jobs a year are expected to be created by 2030, with a multiplier effect of more than three additional jobs supported across the wider economy. 

Yet infrastructure is only as robust as the talent operating it. Addressing the shortage of AI-ready technicians and cloud specialists, particularly in emerging markets, is a strategic necessity. This calls for collaboration between industry, academia and government to establish regional centres of excellence to futureproof its workforce development. 
 

Infrastructure as Strategic Autonomy

As ASEAN negotiates its Digital Economy Framework Agreement, data centres have become a core component of digital sovereignty. Beyond simply storing information, they also safeguard data flows, national interests, and innovation ecosystems. 

Approaches to data governance vary: Indonesia and Vietnam emphasise localisation, while Singapore adopts a more open model that facilities interoperability and secure cross-border data flows. The challenge lies in harmonising frameworks while maintaining sovereignty to support data exchange and growth across these diverse regulatory landscapes.  

This geopolitical dimension extends to supply chains and technology partnerships, and how the region approaches this balance will determine whether it becomes an originator of digital value.  
 

The Energy–Digital Nexus: Managing Growth Within Constraints

As digital infrastructure expands, it must coexist with another urgent transition: energy. ASEAN is now the world's fourth-largest energy consumer, growing at roughly 3% annually. Meeting this demand whilst ensuring energy security and sustainability is both a challenge and opportunity. 

Two key trends are reshaping the landscape. First, power density is rising sharply, driven by AI workloads. Next-generation racks are moving towards 1 MW per rack, up from today's 100–130 kW systems, demanding entirely new approaches to cooling and grid integration. Second, total power demand is climbing – from 55 GW today to 84 GW by 2027, and potentially 165% higher by 2030.

This surge is already straining development in key markets, with a shortage of 15–25 GW projected across Asia-Pacific by 2027–2028 underlining the need for long-term planning. Thus, data centres must be engineered for the future – capable of supporting liquid cooling, advanced thermal management, and renewable energy integration. Far from being passive consumers of resources, data centres can be strategic partners in regional energy systems. Their stable, long-term power loads make them natural offtakers that can catalyse investment in renewables, strengthen grid reliability, and accelerate the energy transition.

The vision of an interconnected ASEAN Power Grid – enabling cross-border renewable energy flows – exemplifies how energy integration and digital development can progress together to reinforce regional resilience. 

The Policy Enablers We Need

No single country can achieve a low-carbon, digitally sovereign future alone. Under the ASEAN Plan of Action for Energy Cooperation, member states have committed to 23% renewable energy in primary supply and 35% in installed capacity by 2025, but enabling policies must evolve to keep pace with investment needs. 

Governments and operators must work in tandem to:

• Streamline approval processes that balance environmental oversight with investment certainty, building on models like Malaysia's Green Lane Pathway initiative

• Cross-border renewable energy procurement mechanisms that enable operators to source clean power regardless of national boundaries

• Balanced data governance frameworks that protect sovereignty without fragmenting markets or inhibiting the cross-border flows that digital economies require

• Coordinated workforce development programmes that address the skills shortage constraining sector growth
   

Data centre operators like STT GDC are increasingly aligning action with these regional priorities. At STT GDC, we are on track to achieve carbon-neutral operations by 2030, with renewables already comprising 78.5% of our electricity consumption in 2024. Our facilities have achieved 11.2% and 34.5% improvement in PUE and WUE respectively since 2020, supported by innovations such as AI-driven cooling, hydrotreated vegetable oil (HVO) for our backup generators in Singapore, and exploring CarbonCure technology for low-carbon construction.  Recognising that sustainable growth also depends on people, we signed an MOU with the Johor Talent Development Council (JTDC) to create a robust pipeline of skilled professionals in data centre operations, supporting Malaysia’s rapidly growing digital economy.

These initiatives underscore how sustainability, innovation and capability-building can advance in tandem – driving operational excellence while contributing to ASEAN’s energy integration and decarbonisation goals.

A Call to Strategic Partnership

The question is no longer whether Southeast Asia will host the world’s digital infrastructure, but whether it will define the principles that shape it. The decisions made today will determine the region’s digital autonomy and its ability to align growth with long-term interests.

Operators, policymakers, and enterprises share a collective responsibility to ensure that digital expansion remains inclusive, sustainable, and resilient. This is Southeast Asia’s moment—to build the infrastructure, develop the talent, and forge the partnerships that will define its leadership in the digital century ahead.