Google’s US$5 Billion Bet on Singapore’s Data Center Future

Posted by Written by Ayman Falak Medina Reading Time: 2 minutes

Google has completed its fourth data center in Singapore. With this completion, the company has raised its investment in the country’s digital infrastructure to US$5 billion, an increase from US$850 million in 2022 when Google completed its third data center in the city-state.

The latest data center aims to support the country’s growing ambitions to become a regional data center hub. Singapore currently has more than 70 data centers with a capacity of 1.4 gigawatts – already one of the biggest hubs in the world.

The country is just one of 11 in the world where Google has established a data center. Despite increasing property and construction costs compared to neighboring Southeast Asian markets, Singapore is poised to become the region’s next 1GW city market, following Tokyo. Further, the country has a colocation vacancy rate of just one percent, the lowest in the region, and also signifies that demand in Singapore significantly exceeds supply.

A colocation vacancy rate refers to the percentage of available, unoccupied space in data centers that is set aside for colocation services. In a data center, colocation involves renting out space, power, and cooling for servers and other computing hardware owned by customers.

Singapore expanding its data center capacity

The Singaporean government recently announced the new Green Data Centre Roadmap will expand the country’s data center capacity by at least 300MW over the next few years and another 200MW specifically allocated for data center operators who utilize green energy. As such, Singapore will now only permit the building of data centers that are environmentally friendly. The city-state did suspend the construction of new data centers in 2019 due to their considerable energy consumption as well as limited land availability.

The city-states’ data centers account for 82 percent of Singapore’s information and communications sector emissions. The new roadmap outlines green standards for data center operators such as reducing the energy required to power air conditioning and upgrading equipment to be more energy efficient. Moreover, the Singaporean government will also assist the industry through various incentives such as the Resource Efficiency Grant for Emissions.

Singapore as a regional data center hub

Singapore’s digital economy is anticipated to soar to US$30 billion by 2025. Supported by a robust network serviced by 24 submarine cables, the city-state has become a global leader in cloud connectivity, hosting major players like Amazon Web Services, Microsoft Azure, IBM Softlayer, and Google Cloud.

For foreign investors, Singapore’s data center sector offers an ideal platform to engage in R&D initiatives focused on refining renewable energy technologies. Geothermal and wave energy solutions, which hold the promise of stable and continuous power generation, present untapped opportunities for innovation. Foreign investors can actively participate in piloting and advancing these emerging technologies within the data center context.

Foreign investors can also explore investments in advanced backup power solutions, such as lithium-ion batteries, which align with carbon-free objectives. Collaborative efforts to refine these technologies can enhance the reliability of backup power while minimizing the environmental impact.

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