Scaling Data Centers and AI in Thailand: A Strategic Investment Briefing

Amid a global AI boom, computing power has become a critical resource of this decade.Worldwide, data centers are scaling up to meet surging demand - so much so that nearly USD 7 trillionin capital investment may be required by 2030. This global race to build infrastructure is now reachingThailand, where supportive policies and strategic location are positioning the country as an emergingdata center hub in Southeast Asia. Private investors and tech executives are taking note: Thailandoffers generous incentives, growing market demand, and integration with related sectors (cloudservices, semiconductors, green energy) - yet faces challenges of scaling sustainably andcompetitively. This briefing provides a comprehensive overview, outlining key trends, governmentincentives, and case examples shaping Thailand's data center and AI industry.II. Global Compute Expansion and the Rise of AI-Centric InfrastructureThe accelerating demand for compute capacity - the integrated combination of processinghardware, storage, memory, and power - continues to reshape global infrastructure priorities. Asfoundation models and machine learning applications expand, data centers have become critical tothe global AI economy. Between 2023 and 2030, cumulative capital expenditure on data centers isexpected to reach approximately USDථϲ.ϳථtrillion, with an estimated USDථϱ.Ϯථtrillion directed towardAI-optimized facilities. Traditional IT workloads account for the remaining USDථ1.ϱථtrillion. This shiftreflects the rising dominance of AI-related demand, expected to reach 70% of global computeworkloads by 2030, compared with only a 30% share today.This transformation presents both opportunity and complexity. Firms across the value chain -cloud hyperscalers, real estate developers, utilities, semiconductor suppliers, and digital infrastructureproviders - are deploying capital at scale to capture the emerging compute economy. Yet futuredemand curves remain uncertain. On one hand, rapid innovation in AI applications across language,vision, and predictive analytics may further accelerate compute intensity. On the other hand, advancesin chip architecture and algorithmic efficiency could temper infrastructure requirements. Investorsmust therefore calibrate investment strategies carefully: overcapacity risks underutilized assets, whileunderinvestment could constrain competitiveness and digital growth.The expansion of AI-scale infrastructure also raises urgent questions around energy usage andenvironmental sustainability. In 2024, global data centers consumed approximately ϰ1ϱථterawatt-MPG | Scaling Data Centers and AI in Thailand, Page 5 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedhours (TWh) of electricity, equivalent to 1.5% of the global power demand1. This figure could morethan double to ϵϰϱථTWh by Ϯ0ϯ0 - making up roughly 3% of worldwide usage2. As a result, futureready data centers must incorporate energy-efficient designs, sustainable cooling systems, and lowcarbon power sourcing. Leading markets are embedding these requirements into regulatory andcommercial frameworks, balancing the digital imperative with climate objectives.Thailand is increasingly positioned to benefit from this global pivot. With rising digital consumption,expanding e-commerce, and a growing demand for cloud and AI services, the country is attractingheightened interest from regional and global investors. Policy support - such as investment privilegesfrom the Thai Board of Investment (BOI), enhanced connectivity infrastructure, and nationalrenewable energy targets - further strengthens Thailand's value proposition. Yet, capitalizing on thismomentum will require coordinated action across multiple dimensions: land access, grid stability,permitting, talent, and long-term power procurement. As the global race for compute intensifies,Thailand has a window to establish itself as a next-generation data center and AI hub for SoutheastAsia. Strategic, sustainability-aligned investment decisions taken today will shape the country'scompetitiveness in the digital economy of the next decade.Exhibit 1. Global Data Center Investment Needs by 2030. By 2030, AI-optimized data centers areprojected to draw over USD 5.2 trillion in investment, exceeding 75% of total infrastructure spend.1 Siemens, Data Center Conference (Bangkok, Friday, June 06, 2025); remarks by Sarat Prakobchat, Deputy Director,Energy Policy and Planning Office (EPPO), "Empoǁering Sustainable Data Centre Groǁth through Thailand͛s CleanEnergy Policy". 2 Ibid.2.61.61.04.73.32.60.60.30.20.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0Accelerated demandContinued momentumConstrained momentumData Center Infrastructure IT Equipment Power3.85.27.9Annual CapacityAdditions (in Gigawatts)78124205MPG | Scaling Data Centers and AI in Thailand, Page 6 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedExhibit 2. Global Data Center Capacity Index (2023ʹ2030). Global data center capacity is projected tosurge by 255% by 2030, driven primarily by the rapid growth of AI workloads, which will more thantriple during this period. Annual capacity additions are set to rise from 13 GW to 31 GW, underscoringthe shift toward AI-optimized, high-density infrastructure powering the next wave of compute demand.III. Thailand's Evolving Role in the Regional Compute EconomyThailand is rapidly emerging as a competitive node in the global data center and AI infrastructurelandscape, supported by rising domestic digital demand, regulatory tailwinds, and strategic geographicpositioning within Southeast Asia. In Ϯ0Ϯϯ, Thailand's data center industry generated an estimatedTHBථϳϰ.ϴථbillion (approximately USDථϮ.1ϱථbillion) in revenue, reflecting healthy year-on-year growth of9.1%. The market spans the full digital infrastructure stack - from backbone network operations tohigh-performance compute and cloud storage - serving both domestic enterprises and regionalspillover demand.Network infrastructure services remain the dominant revenue stream, contributing approximatelyϳ1й of industry value (USDථ1.ϱϯථbillion) through enterprise connectivity, data transmission, andnetwork security offerings. Server systems - including compute hardware, colocation hosting, andplatform services - comprise 1ϵй (USDථϰ00ථmillion), while storage solutions such as enterprise andcloud-based storage account for the remaining 10й (USDථϮϮ0ථmillion). This composition reflects amaturing ecosystem capable of end-to-end digital enablement, increasingly aligned with demand forAI workloads, cloud-native applications, and data-intensive services.44 62 83 102 124156384045505664040801201602002402025 2026 2027 2028 2029 2030Non-AI WorkloadAI WorkloadAnnual CapacityAdditions (in Gigawatts) 13 18 21 19 22 31255%increase82102128152180220MPG | Scaling Data Centers and AI in Thailand, Page 7 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedWhile Thailand's current data center footprint remains moderate by regional standards,momentum is accelerating. As of 2024, the country hosts approximately 42 operational data centersites - compared with 99 in Singapore, 84 in Indonesia, and 61 in Malaysia. Around 88% of thesefacilities are concentrated in greater Bangkok, the country's primary commercial and networkexchange hub, while others are located in secondary urban or industrial corridors such as Chonburi,Chiang Mai, and Phuket. Relative capacity benchmarks underscore the scale of Thailand's growthopportunity: as of 2023, installed capacity was approximately 2.5 times smaller than Indonesia's,3.2 timessmaller than Malaysia's, and nearly 1ϰ timessmaller than Singapore's. This gap, coupled withgrowing demand, policy support, and hyperscaler interest, positions Thailand as a compelling frontierfor regional compute expansion.Investor sentiment reflects this thesis. To date, the Thai Board of Investment (BOI) has approved45 data center and cloud infrastructure projects, representing a combined investment value ofapproximately THBථϯϴ0.ϴථbillion (USDථ10-11ථbillion). The pipeline continues to expand, with severallarge-scale projects under advanced review. Notably, a THBථ1ϳϱථbillion (USDථϱථbillion) joint venturebetween Global Infrastructure Partners (BlackRock) and CP Group to develop giga-scale data centersunderscores Thailand's appeal as a digital infrastructure hub. GIP's leadership cited Thailand'sinfrastructure readiness, energy resources, and skilled workforce as key enablers for long-term growth.Global cloud providers are also establishing substantial local footprints. AWS launched its first Thaicloud region in early Ϯ0Ϯϱ, as part of a USDථϱථbillion commitment over a duration of 15 years. Googleannounced a separate USDථ1ථbillion investment for a Google Cloud region in Bangkok and a hyperscaledata center campus in the Eastern Economic Corridor (EEC). Microsoft, too, is executing plans to builda Thai cloud region, reaffirming CEO Satya Nadella's earlier commitment. These investments not onlyimprove latency and regulatory compliance for Thai businesses but also signal growing regionaldependence on Thai infrastructure.Local and regional players are scaling up in parallel. True IDC is developing a four-building datacenter campus in Bangkok's Bangna district with over THBථ10ථbillion in planned investment between2024 and 2027. State-owned National Telecom (NT) is upgrading its facilities, including a new Tier IIIdata center and additional planned sites. Foreign-backed ventures are expanding as well: Singapore'sST Telemedia has established a presence in Bangkok, and Digital Edge, in partnership with B. Grimm,recently broke ground on a 100ථMW AI-optimized data center campus in Chonburi - part of aUSDථ1ථbillion roadmap to build renewable-powered hyperscale facilities across Thailand.MPG | Scaling Data Centers and AI in Thailand, Page 8 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedThis acceleration of investment reflects a broader shift toward giga-scale, AI-ready infrastructure.As Thailand deepens its integration into the regional digital value chain, scaling capacity through sitereadiness, power reliability, and renewable integration will be critical enablers. Strategic policyalignment - particularly around tax incentives, green energy procurement, and workforcedevelopment - can further position Thailand to capture a growing share of Southeast Asia's computeeconomy.IV. Key Demand Drivers: Digitalization, AI Adoption, and Network ExpansionThailand's data center industry is entering a period of sustained expansion, with projected revenuegrowth of 7.5% to 8.5% annually between 2025 and 2027. This growth is underpinned by multipledemand-side trends that are reshaping the country's digital infrastructure landscape. Chief amongthese is the rapid digital transformation of enterprises and public sector institutions. Organizations areincreasingly deploying cloud platforms, advanced analytics, and AI-enhanced applications to supportcustomer engagement, operational efficiency, and real-time decision-making.Sectors such as banking, financial services, insurance (BFSI), and telecommunications have beenearly adopters of high-performance digital infrastructure. These sectors require secure, highavailability environments to support mission-critical services - including mobile banking, paymentplatforms, and digital customer interfaces - driving robust demand for domestic data center capacity.Thailand's digital payments market exemplifies this momentum: transaction value is forecast to growfrom THBථϰ.ϵථtrillion in Ϯ0Ϯϰ to THBථϴ.ϳ-10.ϴථtrillion by Ϯ0ϯ0 (USDථ1ϰ1-ϯ10ථbillion), reflecting a CAGRof 10-14%. Likewise, the e-commerce sector is expected to expand from USDථϮϲථbillion in Ϯ0Ϯϰ toUSDථϲ0ථbillion by Ϯ0ϯ0 - growth of approximately 15% annually. These shifts generate increasingrequirements for low-latency compute, secure data hosting, and scalable transaction processinginfrastructure.AI adoption is emerging as a second major catalyst. In 2023, Thai enterprises increased spendingon high-performance computing systems, reflected in a 21.2% year-on-year expansion of serverinfrastructure revenue. Use cases span from customer-facing AI chatbots to predictive maintenanceand intelligent automation in industrial settings. Demand for GPU-accelerated servers and advancedcompute nodes continued to surge, with server infrastructure growing by an estimated 10-11% in2024.MPG | Scaling Data Centers and AI in Thailand, Page 9 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedAt the same time, cloud migration is accelerating as organizations seek flexible, cost-effective ITenvironments. This trend is bolstering both the server and storage segments of Thailand's data centermarket. Storage infrastructure - driven by enterprise analytics, IoT telemetry, and regulatorycompliance - grew by over 22% in 2023 and maintained growth rates near 10% in 2024. Theintroduction of stricter data retention and privacy frameworks, including the Personal Data ProtectionAct (PDPA), has also increased demand for secure, redundant storage and backup solutions.Thailand's consumer and network infrastructure landscape further reinforces digital infrastructuregrowth. The country now boasts 89.5% internet penetration (up from ~67% pre-pandemic) and someof the fastest mobile internet speeds globally. With 5G coverage reaching over 89% of the population,Thailand ranks among the highest in ASEAN for next-generation connectivity. These advances have ledto a significant uptick in data consumption: total internet bandwidth reached ϯϲ.ϳථmillion Mbps in2023, growing by 16% year-over-year, and is projected to increase by 9-10% annually over the mediumterm. High-definition streaming, video conferencing, and AI-powered applications are all contributingto the surge in data traffic.Between Ϯ0Ϯϯ and Ϯ0ϯ0, Thailand's total data traffic is expected to grow by 1.ϳϱ times, creatingsustained demand for localized processing, content delivery, and storage capacity. As enterprises andconsumers scale their use of digital services, the role of domestic data centers in supporting resilient,low-latency infrastructure will only grow more central to the country's digital economy.V. Investment Incentives and Supportive PoliciesThailand's government has been proactive in incentivizing data center and AI investments as partof its Thailand 4.0 digital economy strategy. Key policy frameworks and incentives include:ƒ BOI Promotion Incentives: Data center operators that meet certain criteria can receive 8-yearcorporate income tax exemptions (uncapped), followed by a 50% tax reduction for 5 additionalyears. Eligible projects also enjoy import duty exemptions on machinery and often VATexemptions for core data center services. To qualify, projects historically needed to investш THB 5 billion (excluding land) and operate at least two Thai data center sites withinternational security certifications (e.g., ISO/IEC 27001). In May 2025, the Thai Board ofInvestment (BOI) refined these criteria to raise the bar for maximum incentives: to earn thefull 8-year tax holiday, new projects must incorporate advanced computing technologies (e.g.,GPU-based AI capabilities) and meet high efficiency standards such as low Power UsageMPG | Scaling Data Centers and AI in Thailand, Page 10 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedEffectiveness (PUE). Projects not meeting these advanced criteria will be capped at 5-year CITexemption. Additionally, applicants must now submit a clear plan for how the project willdevelop Thailand's economy and workforce - for example through technical training programs,R&D partnerships with local universities, SME supplier development, etc. The BOI will requireimplementation of these plans before companies can fully utilize their tax incentives.Exhibit 3. Thailand͛s BOI Basic Incentiǀes͘ƒ Cloud First and Digital Hub Vision: The government's Cloud First policy, under the Thailand 4.0agenda, prioritizes adoption of cloud and AI across public and private sectors. By migratinggovernment services to the cloud and encouraging enterprises to do the same, Thailand aimsto stimulate domestic demand for data center services. The ultimate vision is to establishThailand as a regional digital hub in Southeast Asia. This goal is echoed in national targets - forinstance, the administration aims for the digital economy to comprise 30% of GDP by 2030.Achieving this would mean nearly one-third of Thailand's economy is driven by digitalindustries, up from roughly 17% in 2022 (latest estimate)3. In practice, this push involves notonly welcoming foreign data center investors but also upgrading broadband, 5G, and IoTinfrastructure, and improving digital government services.ƒ National AI Strategy: Thailand approved a National AI Strategy and Action Plan (2022-2027) tofoster an AI-ready economy. This strategy addresses regulations and ethics, AI research,workforce development, and infrastructure. For example, THB 1.5 billion was recentlybudgeted for AI flagship projects, including THB 1 billion dedicated to training 30,000 AI-skilledworkers. The government recognizes that human capital is as crucial as physical infrastructure.3 Reuters, "Thailand to pursue new policies to boost and protect digital economy", November 8, 2024, 1:43 PM GMT+7Activities Corporate IncomeTax Exemptionmachinery importduty exemptionDuty exemption onR&D raw materialsRaw materials dutyexemption (export)Non-taxincentives✓ ✓ ✓ ✓✓ ✓ ✓ ✓8.2.1 Data centers &8.2.2 Cloud Services8.2.1.2 Other datacentersA2ActivityGroupsA38 Years5 YearsMPG | Scaling Data Centers and AI in Thailand, Page 11 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedPrograms like Microsoft's "AI Future Ready Academy" and Google's skills training initiativescomplement this effort. The economic payoff of AI is expected to be significant: studies suggestAI could unlock THB 2.6 trillion (approximately USD 75 billion) in annual economic benefits forThailand by 2030 - equivalent to a 10-15% boost to GDP. Ensuring the necessary computeinfrastructure (data centers) is in place is a precondition for capturing this value.ƒ Eastern Economic Corridor (EEC) and Infrastructure: The EEC - a special development zonespanning Chonburi, Rayong, and Chachoengsao provinces - has become a focal point for largescale data center projects. Digital Park Thailand (EECd) in Chonburi offers land, fiberconnectivity, and streamlined permitting for data center campuses. Investors like Google,Digital Edge/B. Grimm, and DayOne (a global data center firm building a campus in Amata City,Chonburi) are leveraging the EEC's advantages. The Thai government has invested in powerand fiber upgrades in this corridor to support high-density computing facilities. For privateinvestors, these industrial zones provide ready infrastructure and regulatory support, reducingthe lead time for new data center construction.Exhibit 4. Exploring the Seven Specialized Economic Zones of the Eastern Economic Corridor (EEC).ƒ Green Energy and Power Grid Support: Recognizing that data centers consume massiveelectricity, Thailand is aligning its energy policy to support this growth sustainably. The updatedPower Development Plan (PDP) targets at least 50% of power generation from renewables by2037, alongside a 30-40% reduction in power sector emissions. It also commits to keeping1. EECh (High-Speed Rail): Located along a 220-kilometer high-speed rail track connectingDon Mueang, Suvarnabhumi, and U-Tapao Airports.2. EECg (Genomics): Situated at Burapha University in Chonburi, serving as a hub forgenomic research and testing.3. EECa (Airport): Based at U-Tapao International Airport in Rayong, featuring commercialand cargo terminals, aviation training centers, and Free Trade Zone facilities.4. EECmd (Medical Hub): Found in Bang Lamung District, Chonburi, aspiring to becomeThailand's premier medical destination, offering comprehensive healthcare services.5. EECd (Digital): Located in Si Racha District, Chonburi, serving as a hub for digitalinnovation with state-of-the-art data centers and IoT facilities.6. EECtp (Tech Park): Situated in Ban Chang, Rayong, focusing on technological innovationand research and development.7. EECi (Innovation): Positioned in Wangchan Valley, Rayong, promoting entrepreneurshipand technology transfer, fostering startup growth and industrial applications.ChachoengsaoRayongChonburiEEChEECgEECdEECmdEECa EECtpEECiMPG | Scaling Data Centers and AI in Thailand, Page 12 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedelectricity affordable (retail power < THB 4 per kWh, roughly USD 0.11) to maintain costcompetitiveness. Specific programs include: a "Green Electricity Tariff" allowing data centersto purchase 100% renewable power from the grid, and pilot projects for direct power purchaseagreements (PPA), allocating 2,000 MW of renewable capacity that data center operators cancontract directly. In 2024, regulators even trialed systems for data centers to buy green powerto meet tech giants' Ϯϰпϳ sustainability goals. These policies make Thailand attractive to firmswith carbon neutrality pledges. For example, the upcoming 100 MW Chonburi campus byDigital Edge will be powered entirely by B. Grimm's renewable energy portfolio - a selling pointfor hyperscaler clients.VI. Key Trends and Case Studies in Thailand's Data Center & AI IndustrySeveral important trends are shaping Thailand's data center and AI landscape in practice:ƒ Hyperscalers Localizing Infrastructure: The entry of AWS, Google, Microsoft and others is agame-changer. Cloud regions launched in Thailand mean lower latency and betterperformance for local customers, which in turn spurs more cloud adoption. It also reflectsintra-ASEAN shifts: for years, Singapore was the dominant data center hub, but space andpower constraints there prompted a brief moratorium on new centers. Now, Thailand (alongwith Malaysia and Indonesia) is capitalizing on that overflow of demand. Hyperscalers aretreating Thailand as a central node to serve not just the domestic market but also neighboringCLMV countries (Cambodia, Laos, Myanmar, Vietnam). In the AWS Thailand Region launch, thecompany noted Thailand's proximity to Indochina and the government's proactive cloudpolicies as key factors. Case example: AWS's committed USD 5 billion investment is projectedto add USD 10 billion to Thailand's GDP and 11,000 jobs over 1ϱ years, according to AWS andThai government statements. For investors, this hyperscaler influx signals strong confidence inmarket growth - but also intensifies competition in cloud services.ƒ Surge in Large-Scale "Giga" Data Centers: Where a typical enterprise data center might havebeen 1-5 MW a decade ago, Thailand is now seeing projects 20 times that size. Industryobservers note that just a few years ago, most data center tenders in Thailand were in the 12-20 MW range, but now proposals of 100 MW are appearing. This reflects the arrival of hyperscalers and AI-heavy workloads that require far bigger facilities. For example, the plannedGreen Data Center Park in Chonburi spans 300 acres and is designed for hyperscalers and GPUclusters, with operations from 2026. The CP-GIP venture also explicitly envisions "Giga DataMPG | Scaling Data Centers and AI in Thailand, Page 13 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedCentres" supporting gigawatt-level capacity for cloud and AI needs. These mega-projectsbenefit from economies of scale, but they demand significant upfront capital and robust powerinfrastructure. They also indicate consolidation of capacity - rather than many small serverrooms, the future is a few large campuses. Private investors may find opportunities insupporting infrastructure (power distribution, cooling solutions, backup energy systems, etc.)for these giant campuses.ƒ AI-Driven Demand and Specialized Facilities: AI training and inferencing are more computeintensive and power-hungry than traditional enterprise IT. In Thailand, data center operatorsare already catering to AI clients requiring high-density racks and GPU clusters. True IDCreports that demand from AI-focused customers has risen much faster than anticipated,prompting it to fast-track new large-scale facilities. Many new data centers are advertised as"AI-ready," featuring liquid cooling, higher rack power (10-30 kW per rack vs. 5-6 kW typicalin the past), and enhanced networking for distributed training jobs. Case example: The DigitalEdge/B. Grimm Chonburi facility is explicitly positioned as an AI hub for Southeast Asia, offeringhigh-density colocation tailored to machine learning workloads. Even global issues like theshortage of AI-accelerator chips (GPUs) have local implications - AWS Thailand's countrymanager noted that many customers struggle to procure GPUs for AI, increasing reliance oncloud providers to supply that capacity. This dynamic is an opportunity for data centerinvestors to offer GPU-as-a-service or partner with AI chip providers. It also underscores thatdata centers and chip supply chains are interlinked. Recognizing this, Thailand is attempting toboost its semiconductor sector (e.g., courting a major Taiwanese electronics manufacturer'sTHB 10.5 billion investment in semiconductor machinery, and launching a NationalSemiconductor Policy targeting THB 500 billion FDI by 2029). While Thailand is not yet a playerin advanced chip fabrication, it aims to support back-end manufacturing and chip-adjacentindustries (like precision equipment for fabs). Over time, such moves could ensure closeraccess to critical AI hardware for Thai data center operators.ƒ Sustainability and Energy Efficiency as Requirements: The cost of power is a dominantoperating expense for data centers, and sustainability commitments are increasingly nonnegotiable for global clients. Thailand's approach has been to bake efficiency and greenmeasures into its promotion criteria. As noted, new DC projects must demonstrate low PUE(Power Usage Effectiveness) to qualify for full Board of Investment (BOI) incentives. Companiesare responding by adopting cutting-edge cooling and energy management. For instance, anupcoming Asian Development Bank-backed data center project in Thailand is targeting a PUEMPG | Scaling Data Centers and AI in Thailand, Page 14 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedof 1.4, significantly more efficient than older facilities (which often had PUE 1.8-2.0). On theenergy sourcing side, the introduction of a direct renewable energy procurement system is amajor enabler. In 2023-20Ϯϰ, Thailand's regulators approved initial rules for corporate PPAs,allowing data centers to contract directly with solar and wind producers via the grid. This iscritical for attracting operators like Google, which has a global goal of 24/7 carbon-free energy.ƒ Broader Ecosystem Growth - Cloud, Edge, and 5G: The rise of data centers is happeningalongside Thailand's ϱG rollout and cloud services boom. With ϱG coverage expanding in cities,more IoT and real-time applications are expected, which may drive edge data centerdeployments (smaller facilities closer to end-users to reduce latency). While most investmentso far is in large core data centers, telecom operators like AIS and True have hinted at edgecomputing sites to support smart city initiatives and content delivery. Moreover, the cloudservices market in Thailand is growing approximately 25% annually, with an estimated valueexceeding USD 1 billion by 2025. As enterprises modernize IT via cloud and as AI getsembedded into software-as-a-service, demand for data center capacity further increases. Inthe public sector, the government's own Government Data Center and Cloud (GDCC) projectis consolidating state IT systems onto a centralized cloud, which is driving upgrades ofgovernment-run data centers or leases from commercial ones. All these ecosystemdevelopments reinforce a virtuous cycle: better digital infrastructure attracts more techinvestment (e.g., fintech, digital banking - Thailand just greenlit digital banks, which will relyon cloud/data centers), and more digital services usage justifies further infrastructure.ƒ Risks and Considerations: Despite the positive momentum, investors should remain mindful ofrisks. One concern is demand uncertainty - the AI wave is real, but its slope could fluctuate. Ifenterprises find fewer high-value AI use cases than expected, compute demand mightundershoot projections; conversely, a breakthrough "killer app" (for example, AI in healthcarediagnostics or manufacturing optimization) could cause an even steeper demand surge. Thisuncertainty reinforces the wisdom of phased investments and modular data center designs.Given the unpredictability of AI's evolution, investors are advised to adopt a phasedinvestment approach, evaluating returns at each stage. Another challenge is competition:Southeast Asia's data center race is heating up, with Indonesia, Malaysia, and Vietnam alloffering incentives and new facilities. Singapore has lifted its moratorium with stricterefficiency rules, meaning it hasn't ceded its crown easily. Thailand will need to keep improvingits value proposition - through reliable and cheap power, skilled workforce, and politicalstability - to win regional deals. Lastly, the rising cost per MW of new data centers is an issue,MPG | Scaling Data Centers and AI in Thailand, Page 15 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedas noted by industry experts. Future-proofing for AI (e.g., extra power and cooling capacity)and supply chain inflation have driven up construction costs. Developers in Thailand aremitigating this by careful design and cost control, but higher capex could pressurize returns ifpricing for data center services doesn't increase correspondingly. Close attention to efficientdesign and capital productivity will differentiate winners in this space.VII. Convergence with Cloud, Semiconductors, and SustainabilityThe data center industry in Thailand does not operate in isolation; it is deeply intertwined with thebroader cloud computing, semiconductor, and energy ecosystems. These intersections are reshapingboth the opportunities and the strategic direction of new investments.ƒ Cloud Services and Digital Adoption. Thailand's accelerating digital transformation is drivingrobust demand for cloud and data infrastructure. As enterprises modernize their IT systems,they are increasingly migrating to cloud-based environments to enhance scalability, efficiency,and cost control. According to Krungsri Research (2024), approximately 17.8% of Thaiorganizations were already utilizing AI - up from 15.2% in 2023 - while more than 73% plan toadopt AI technologies in the near term. This trend, reinforced by growth in e-commerce,fintech, and IoT ecosystems, underpins the need for localized cloud regions and edge datacenters. The entry of major hyperscalers - AWS, Microsoft Azure, and Google Cloud - into theThai market exemplifies both a response to this digital momentum and a catalyst for furtherenterprise adoption (Krungsri Research, 2024). In parallel, digital consumption continues tosurge. LH Bank Research projects mobile data traffic per smartphone to double from 19GB/month in 2024 to 38 GB/month by 2030, while overall internet bandwidth usage in Thailandis forecast to grow by approximately 10% annually between 2025 and 2027 (Krungsri Research,2024). Collectively, these indicators underscore a resilient foundation of demand for compute,connectivity, and storage services - securing the long-term relevance of Thailand's data centermarket.ƒ Semiconductor and Chip Sector Synergies. The growth of AI workloads and advanced datacenters depends on semiconductor innovation. Recognizing this, Thailand is nurturing itsemerging semiconductor ecosystem, aiming to capture a greater share of the upstream valuechain. In early 2025, Lumentum (U.S.) announced a THB 2.3 billion expansion to manufacturehigh-performance photonic chips in Thailand. These chips - critical for high-speed data centerinterconnects and AI accelerators - will anchor Thailand's first full-scale chip R&D center,MPG | Scaling Data Centers and AI in Thailand, Page 16 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedtransitioning the country's role from assembly to design and innovation. Similarly, UniEQTechnology (China) secured the Board of Investment (BOI) approval for a THB 10 billioninvestment in a new chip packaging and testing facility within the Eastern EconomicCorridor (EEC). The initiative will serve high-performance computing and AI applications,directly linking Thailand's semiconductor sector with its data infrastructure ambitions. WhileThailand remains modest compared to established semiconductor hubs such as Taiwan orSouth Korea, these developments reflect a strategic pivot toward higher-value AI hardwaremanufacturing. Combined with regional supply chain diversification, this positions Thailand asan emerging contributor to the AI-cloud-chip value chain.ƒ Green Energy and Sustainability. Energy strategy has become a defining factor for Thailand'sdata center competitiveness. Data centers are inherently power-intensive, and their long-termviability now hinges on energy affordability, reliability, and sustainability. Thailand's electricitycosts remain regionally competitive, but its generation mix is still dominated by natural gas andcoal. As investors and tenants adopt stronger ESG mandates, the shift toward renewable andlow-carbon energy is accelerating. The government's Climate Change Act (pending) and itspledge toward carbon neutrality by 2050 will likely impose new sustainability requirements onenergy-intensive industries (LH Bank Research, 2024). In alignment, the Board ofInvestment (BOI) has begun promoting energy efficiency metrics - such as Power UsageEffectiveness (PUE) thresholds - in data center incentive packages (Global Data Center Hub,2024). Developers are increasingly designing facilities with renewable integration in mind,exploring corporate Power Purchase Agreements (PPAs) for solar and wind energy. Thailand'slatest Power Development Plan (PDP) prioritizes expanding renewable capacity, which shouldenhance the green credentials of data centers in the coming years. Moreover, sustainabilityinnovation is extending to cooling technologies (e.g., liquid and immersion cooling), waste heatreuse, and IT hardware circularity. As Krungsri Research (2024) notes, leading investors nowview energy strategy as integral to IT strategy - a prerequisite for attracting top-tier cloudproviders and hyperscale tenants. Thailand's ability to offer clean, cost-competitive power isbecoming a decisive advantage in regional data center investment decisions. MPG | Scaling Data Centers and AI in Thailand, Page 17 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedExhibit 5. Thailand͛s Data Infrastructure Reǀenue Composition and Groǁth Outlook ;ϮϬϮϰ ProjectionͿ.Network infrastructure remains the dominant revenue contributor, generating approximately THB 53.2billion (71% of total market value), followed by server systems (THB 13.9 billion) and storage systems(THB 7.7 billion). While network infrastructure shows moderate expansion at 4%, both server andstorage segments were projected to grow at a robust 10.5% in 2024, reflecting increasing demand forhigh-performance computing and cloud storage capabilities.VIII. Outlook and Strategic ConsiderationsThailand's data center and AI infrastructure sector is on a strong growth trajectory, bolstered byglobal trends and local policy support. The country is steadily establishing itself as a regional computinghub, as evidenced by the billions in commitments from both tech giants and international investors.The convergence of enablers - robust incentives, improving renewable energy availability, a growingtalent base, and adjacent growth in cloud, semiconductor, and 5G industries - creates a favorableenvironment for continued expansion. Indeed, Thai officials and industry leaders often speak of anambition for Thailand to become "the digital and AI hub of ASEAN", and current investment trendssuggest this is within reach.For private investors and technology executives considering Thailand, several strategicconsiderations emerge.ƒ Leverage Incentives, but Prepare to Deliver Value: The generous Board of Investment (BOI)incentives (tax holidays, etc.) significantly boost project ROI. However, they come withconditions - particularly around technology advancement, energy efficiency, and local value53.213.97.7Revenue (THB billion)NetworkInfrastructureServer Systems410.5 10.5024681012Network Infrastructure Server Systems Storage Systems2024 Projected Growth Rate (%)MPG | Scaling Data Centers and AI in Thailand, Page 18 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedadd. Investors should integrate these requirements into their project plans from the outset.For example, adopting world-class cooling systems to achieve low PUE not only secures taxbenefits but also reduces operating costs in the long run. Similarly, partnering with Thaiuniversities or launching IT training programs can fulfill BOI obligations and build a talentpipeline for the data center's staffing needs. In short, aligning business goals with Thailand'sdevelopment objectives creates a win-win scenario.ƒ Capitalize on AI and Cloud Growth - but Stay Agile: The demand boom from AI is a core reasonto invest now. Thailand's enterprises in sectors like manufacturing, retail, finance, andagriculture are beginning to deploy AI at scale, supported by cloud platforms. New services(from banking chatbots to smart farming drones) will require more localized computing power.Investors can target offerings to high-growth segments - for instance, providing specialized "AIcloud" capacity for companies that need to train models domestically. At the same time, agilityis key. Keeping data center designs flexible (e.g., space that can convert from general IT use tohigh-density AI use) will hedge against shifting demand. The uncertainty around AI efficiencyimprovements means capacity planning should be revisited frequently. Investors might followa modular build-out strategy: commit capital in tranches as racks fill up, rather thanconstructing an entire campus at once. This approach can improve odds of strong returns in afast-evolving market.ƒ Integrate Sustainability into the Core Strategy: With power costs and green expectations bothhigh, any data center project in Thailand must have a clear energy strategy. Investors shouldsecure access to renewable energy, whether via the Board of Investment (BOI)'s green tariffprogram or direct PPAs, to appeal to global clients and potentially enjoy long-term pricestability. Given the PDP's target of ϱ0й renewables by Ϯ0ϯϳ, renewable supply should increase,but competition for green energy could also rise as more corporates seek it. Early moveradvantage in signing renewable deals is real. Additionally, exploring on-site generation (solarrooftops, etc.) and energy storage could provide backup resilience and cost savings.Environmental sustainability is not just about corporate responsibility - in this sector it directlyties to attracting business and even obtaining permits (as some local authorities now considerenvironmental impact in data center approvals).ƒ Consider Related Opportunities in the Value Chain: As data centers flourish, so do ancillarysectors. There are opportunities in fiber networks (to connect new campuses to internetbackbones), advanced electrical equipment (HV substations, switchgear tailored for largeloads), cooling technology, and facility management services specialized for mission-criticalMPG | Scaling Data Centers and AI in Thailand, Page 19 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedoperations. Some investors may also look at the real estate angle: developing industrial landinto ready-made data center parks (with energy and cooling pre-installed) to lease tooperators. The Eastern Economic Corridor (ECC) offers a template, and private industrial estatedevelopers are getting involved in such projects. Moreover, Thailand's push in thesemiconductor and electronics sector - aiming to support data center and EV industries -could yield partnerships. For example, data center firms might collaborate with newsemiconductor facilities on testing or R&D for AI chips, or simply benefit from shorter supplylines for hardware replacement components. The ecosystem is broad, and a strategic investormight not limit themselves to just owning a data center; complementary investments canreinforce the core business.ƒ Monitor Geopolitical and Regulatory Developments: Finally, tech executives should keep aneye on external factors. Geopolitics can affect the AI and data center realm - export controlson chips, cross-border data regulations, and shifts in trade policy could all impact Thailand'saspirations. For instance, restrictions on advanced AI chip exports (aimed at certain countries)have thus far spared Southeast Asia, allowing Thailand ample access to latest GPUs. However,any change in international policy (e.g., US-China tech tensions) could trickle down to localavailability of technology. On the regulatory front, Thailand is updating laws on data (PDPA)and cybersecurity, which will influence how data center customers (especially infinance/health) use cloud resources. Overall, Thailand remains a friendly environment fordigital business, but investors should engage with policymakers via industry groups to stayahead of new rules or to advocate for supportive measures (such as streamlined licensing,spectrum for connectivity, etc.).IX. Forging Thailand's Digital Advantage: A Decade of Opportunity AheadThailand's data center and AI ecosystem stand at a strategic inflection point. As compute capacitybecomes the defining infrastructure of the digital economy, Thailand is rapidly transitioning from anemerging participant to a serious contender in the regional and global digital value chain. Theconvergence of global AI demand, national digital ambitions, and private sector dynamism has laid thegroundwork for scaled and sustained growth.This momentum is more than cyclical - it is structural. AI adoption, cloud transformation, anddigital services are becoming foundational across industries, reshaping compute requirements acrossSoutheast Asia. With strong underlying demand and a digitally connected population, Thailand is well-MPG | Scaling Data Centers and AI in Thailand, Page 20 of 22Copyright © 2025 Mahanakorn Partners Group. All rights reservedpositioned to capitalize on this shift. The government has signaled its commitment through targetedinvestment incentives, progressive regulatory frameworks, and support for high-impact sectors suchas cloud, semiconductors, and hyperscale data infrastructure.Global and regional players have taken notice. Leading hyperscalers, colocation specialists, andinfrastructure investors are deploying capital at scale, establishing data center regions, AI campuses,and cloud platforms across the country. The shift from edge deployments to giga-scale campusessignals a long-term bet on Thailand as a digital infrastructure hub for the region.Yet the path forward will not be automatic. Realizing Thailand's digital potential will requirecontinued coordination across four critical enablers: (1) power grid resilience and access to low-carbonenergy, (2) streamlined permitting and site development readiness, (3) high-quality workforcedevelopment aligned to AI and data infrastructure, and (4) clear national strategies on datalocalization, sustainability, and regional competitiveness. These will determine the pace and quality ofscale.For investors, infrastructure developers, and technology firms, the case for engagement iscompelling. Thailand offers a combination of scale potential, strategic location, and policy alignmentthat few regional markets can match. With global data center investment expected to exceedUSDථϲ.ϳථtrillion by Ϯ0ϯ0 -- driven predominantly by AI-related workloads - Thailand has a credibleopportunity to capture a meaningful share of this capital and capacity build-out.The next decade will define digital leadership in Southeast Asia. By acting now, and aligning withThailand's national digital priorities, stakeholders can forge durable competitive advantage in one ofthe world's most dynamic infrastructure races. The opportunity is not just to participate - but to shapethe future of compute in the region.