The rise in enterprise AI deployment has sparked a data centre boom in the Asia-Pacific (APAC) region. However, AI isn’t the only factor driving this regional growth.
CtrlS Datacenters, which operates 15 data centres across India, is playing a role in this expansion. Sridhar Pinnapureddy, the company’s Founder and Chief Executive Officer, sat down with Frontier Enterprise at Tech Week Singapore to discuss the evolving APAC data centre market, including key trends, regulatory challenges, and future industry expectations.
How do you see APAC outpacing other markets in terms of data centre investments and infrastructure growth?
Industry research shows that the operational capacity of the APAC data centre market has surpassed the 10 GW mark, with approximately 800 MW of new supply added in H2 2023. This brings the total regional live capacity to 10.6 GW. The region is expected to see a robust development pipeline, with 3.9 GW under construction and 9.4 GW in the planning stages.
The APAC region grew at a 19.1% CAGR (6.5 GW) compared to the Americas at 16.7% (9.3 GW) and EMEA at 13.6% (4.2 GW) between 2018 and 2023. APAC is forecasted to grow from 11.1 GW in 2023 to 26.7 GW by 2028.
India and Malaysia account for half of the total 10.5 GW increase across all APAC markets. India alone added over 2 GW of committed and early-stage supply, with 36 projects exceeding 50 MW. This is compared to 21 and 23 projects in Australia and Japan, respectively. India, with 1,074 MW currently in operation, has joined Mainland China (4 GW), Japan (1.3 GW), and Australia (1,168 MW) as >1 GW-sized markets.
Data centre transactions in APAC rose about 2.4 times to approximately US$22 billion between 2019 and 2023. The region is expected to become the world’s largest colocation data centre market, with projections suggesting the market will double to US$52 billion by 2026.
The APAC data centre market is experiencing rapid growth, outpacing other regions in terms of both investment and infrastructure development. This growth is driven by rapid digitalisation, advancements in AI, and the increasing adoption of 5G technologies. These factors are driving significant demand for data storage and processing capabilities.
However, APAC’s growth isn’t just a reflection of global trends. It’s shaped by region-specific factors, such as stringent data localisation laws, diverse socio-economic landscapes, and proactive government initiatives aimed at fostering sector growth.
How has CtrlS adopted global technologies or best practices in data centre management to stay competitive, especially in the APAC region?
CtrlS Datacenters operates 15 data centres with over 250 MW of capacity across eight major Indian cities. We’ve recently announced a US$2 billion investment plan to add around 350 MW of AI and cloud-ready hyperscale and edge data centres, both in India and select overseas markets.
We’re responding to growing global demand for AI-driven data centre requirements. We’ve also seen a new wave of customers who are building their own infrastructure to support AI and ML capabilities so they can meet the growing demand for AI/ML applications.
Our AI and ML-ready facilities support high-power racks and incorporate cooling methods like direct free cooling, submerged racks, and liquid immersion cooling. In addition to growing cloud adoption, we expect an increasing demand for AI training and large language models (LLMs) in India and surrounding regions.
Our cooling platform is designed with energy efficiency and scalability in mind. It meets Rated-4 guidelines and can be customised to meet specific customer needs. We use a combination of technologies to improve power usage effectiveness (PUE) and implement pass-through power billing models.
We integrate renewable energy sources, including solar power, and follow global sustainability standards like LEED certification. Automation and AI-driven processes help us minimise downtime and improve operational efficiency, while international security protocols ensure data protection across all our facilities.
As part of our sustainability efforts, we’ve established a captive power plant, and we’re working towards 100% renewable energy by 2030.
In terms of network technology, we’ve deployed high-capacity infrastructure to handle increasing traffic demands. By developing our own fibre network, we support low-latency, high-capacity connections while maintaining control over network security.
What factors are driving the expansion of data centre capacity in APAC, and are they likely to remain viable in the long run?
The growth of the APAC data centre market can be attributed to the development of the industrial sector. The increasing adoption of technologies such as cloud computing and AI across various industries has significantly increased demand for data centre infrastructure.
APAC has become a major hub for data centre investments, driven by rising data consumption and the adoption of cloud-based technologies in some of the world’s fastest-growing digital economies.
The demand for data centres in APAC continues to rise as businesses accelerate their digital transformation journeys. Investment in technologies such as AI, VR/AR, and the Internet of Things (IoT) also contribute to this trend.
Key factors driving this expansion include rapid digital transformation across industries, increasing cloud adoption, growing demand for AI and big data analytics, and the rollout of 5G networks. Additionally, the growth of IoT, increasing internet and smartphone penetration, and stringent data localisation laws in some countries are further supporting this expansion. Government policies that promote digital infrastructure, along with APAC’s large young population and its strategic location as a global data hub, are also key contributors.
These factors are likely to remain viable in the long term, thanks to sustained economic growth and continued technological advancements. However, the industry faces challenges such as high energy consumption, environmental concerns, workforce shortages, geopolitical tensions affecting cross-border data flows, and potential market saturation in certain regions.
To ensure long-term sustainability, the data centre industry must focus on investing in AI and other emerging technologies, adopting eco-friendly solutions, developing a skilled workforce, and adapting to evolving regulatory landscapes.
What do you think sets APAC’s data centre ecosystem apart in terms of customer demands and market readiness compared to other regions?
The APAC data centre ecosystem is marked by rapid growth and unique market dynamics. The region is projected to grow at a 13.3% CAGR from 2023 to 2028, outpacing global averages. This growth is driven by widespread digitalisation, cloud adoption, the rollout of 5G networks, the proliferation of IoT, and the surge in AI applications.
Emerging markets like India, Thailand, Malaysia, Indonesia, and Vietnam are becoming new development hotspots. These countries offer lower operational costs and supportive government policies, making them attractive alternatives to more saturated markets.
Meanwhile, governments across APAC are actively promoting data centre growth through incentives and industry-friendly policies. They recognise the sector’s critical role in driving their digital economies.
In addition to growth, the region is also addressing sustainability concerns with innovative solutions like undersea and floating data centres. These approaches help tackle land and energy constraints, particularly in densely populated areas.
The influx of hyperscale facilities from major tech companies, along with the sector’s attractiveness as an alternative asset class, is drawing significant capital investments to APAC’s data centre ecosystem.
What lessons have you learned that might indicate whether APAC is truly outpacing others or simply responding to unique local demands?
APAC has become globally competitive and we are seeing a lot of global workloads coming in, especially to India. The current demand for data centres is largely driven by AI workloads, and AI-related industries are showing massive potential with multi-megawatt requirements.
APAC is outpacing other regions due to several intrinsic strengths, such as reliable infrastructure, lower power costs, proactive government policies, and the availability of a skilled talent pool.
