Billions Are Flowing In — But the Heat Hasn’t Gone Anywhere
Imagine opening a refrigerator under blazing sun, in 35°C heat with 80% relative humidity, and trying to keep everything inside cold all day, every hour, all year long. That is essentially what data centers in Southeast Asia have to do.
While the world is excited about the massive wave of data center investment pouring into the region, there’s one major issue people rarely talk about: tropical heat and humidity can make cooling costs up to twice as high as in colder countries. And this is no minor concern when cooling accounts for 30–40% of a data center’s total energy consumption.
Fortune reports that regional data center demand is expected to grow 20% annually through 2028, while market penetration remains 70% below the levels seen in the U.S. and China. In other words, many more facilities still need to be built — and every single one will face the same thermal challenge.
Thailand Is Becoming a Global Data Center Hub — And the Numbers Are Stunning
If you haven’t been following this story, the scale of what is happening may come as a surprise.
The Largest Investment Wave in History
In just the first half of 2025, over a six-month period, Thailand’s data center sector attracted 521.2 billion baht ($16.1 billion) across 28 projects — a figure unlike anything seen before in the country’s digital economy.
Global tech giants are moving in aggressively:
- AWS — investing $5 billion in data center infrastructure, with projections of adding $10 billion to GDP and creating 11,000 jobs per year
- Google — investing $1 billion in a hyperscale data center in Chonburi
- ByteDance (TikTok) — committing $3.8 billion across three provinces
- Microsoft — naming Thailand as the location of its Lead Regional Data Center for the region
BOI Approvals Keep Coming
In November 2025, Thailand’s BOI approved four new data center projects worth a combined $3.1 billion, including a 200 MW hyperscale facility worth $1.7 billion by Zenith Data Center and Cloud Services.
Then in January 2026, the BOI approved another seven projects worth an additional $3.1 billion, including three data center projects with a combined IT load of 223 MW.
Thailand’s Data Center Market Is Set to Grow 4x in Six Years
Analysts at Arizton forecast that Thailand’s data center market will expand from $1.44 billion in 2025 to $6.28 billion by 2031, representing an average annual growth rate of 27.78% — a pace many other industries would envy.
The Problem Nobody Wants to Talk About — Heat and Humidity
The investment numbers look great, but behind them lies a major engineering challenge.
Why the Tropics Are Harder
Average temperatures in Southeast Asia range between 27–35°C year-round, while the ideal operating temperature for data centers is 18–27°C. Compare that with facilities in Sweden, Finland, or Canada, where outdoor temperatures may stay below 10°C for much of the year — they can often simply pull in cool outside air, a technique known as free cooling.
But in the humid tropics? Free cooling is barely feasible. The incoming air is simply too warm and must be cooled before it can be used.
Professor Lee Poh Seng of the National University of Singapore, an expert in thermal systems, explains that “high humidity makes things even worse — it raises the risk of condensation, corrosion, and long-term equipment degradation.”
Numbers That Force You to Stop and Think
- Data centers in tropical climates use 30–40% of total energy for cooling
- Data centers in colder regions use only 10–15%
- Data centers in Malaysia average a PUE (Power Usage Effectiveness) of 1.4–1.8, compared with Google’s global average of 1.10 (the closer to 1.0, the better)
- For every 1°C increase in temperature, energy use rises by roughly 5%
A simple calculation makes the point clear: if a 100 MW data center has a monthly electricity bill of 200 million baht, and cooling accounts for 35% of that, then cooling alone costs 70 million baht per month. Cut that by just 10%, and the savings would be 7 million baht per month — or 84 million baht per year for just one facility.
Cooling Innovation for the Tropics — A Fast-Heating Battle
The industry is not standing still. Several cooling innovations are starting to reshape the game.
Liquid Cooling — The Shift from Air to Fluid
Instead of relying on air conditioning to blow cold air, newer approaches use special liquids (dielectric fluids) delivered through pipes directly to the chips. These liquids can absorb heat up to 1,000 times more effectively than air, making them far more efficient at cooling GPUs and CPUs running heavy AI workloads.
The global market for data center liquid cooling systems is worth $5.52 billion in 2025 and is expected to grow to $15.75 billion by 2030.
Immersion Cooling — Submerging Entire Servers
An even more extreme approach is to immerse entire servers in non-conductive liquid tanks. It sounds radical, but the results are impressive:
- Up to 91% less water use
- 50% lower energy consumption
- 85% less space required
- Support for power densities above 100 kW per rack
In January 2026, Submer and Inspur partnered to deploy two-phase immersion cooling for hyperscale racks supporting densities above 100 kW per rack — a sign that this technology is moving into the mainstream in Asia.
Singapore’s Tropical Data Center Standard — A New Benchmark for Hot Climates
In March 2026, Singapore made history when BDx became the first company to adopt the Tropical Data Center Standard, a framework designed specifically for data centers in tropical climates. Its goals include:
- Raising operating temperatures to 26°C (from the typical 20–22°C)
- Reducing energy use by up to 40%
- Cutting water consumption by 30–40%
- Achieving a PUE below 1.2 with hybrid air and liquid cooling systems
Singapore’s 0.5 MW Sustainable Tropical Data Centre Testbed serves as a live testing ground, with more than 20 leading companies — including Dell, Intel, and Meta — collaborating to develop solutions built specifically for hot, humid environments.
The Energy Crunch — Data Centers Will Consume Enormous Power
The challenge doesn’t stop at cooling, because more cooling means more electricity must be generated.
The Numbers Are Alarming
A report from Ember finds that data center electricity use in ASEAN will surge from 9 TWh in 2024 to 68 TWh by 2030 — an increase of more than 7x in just six years.
By country:
| Country |
2024 |
2030 (forecast) |
Growth rate |
| Malaysia |
8.5 TWh |
68 TWh |
8x |
| Indonesia |
6.7 TWh |
26 TWh |
4x |
| Philippines |
1.1 TWh |
20 TWh |
18x |
| Singapore |
5 TWh |
8.4 TWh |
1.7x |
| Thailand |
2.4 TWh |
6 TWh |
2.5x |
By 2030, data centers could account for 2–30% of total electricity demand in individual countries. Malaysia, for example, may need to build an additional 8 GW of gas-fired power capacity by 2030 to support demand.
Renewable Energy Still Isn’t Keeping Up
Ember estimates that $45–75 billion must be invested in solar and wind by 2030 if data centers are to source even one-third of their electricity from clean energy. Without that investment, the region’s emissions could rise by as much as 7x by 2030.
Bridge Data Centres in Malaysia offers an interesting example: it already sources half of its energy from solar and is targeting carbon neutrality by 2040, while also exploring hydrogen and nuclear power.
Singapore, meanwhile, is investing $784 million over five years in AI research while putting strong emphasis on sustainable energy use.
The Water Crisis — The Overlooked Problem
Heat is not the only issue. Data centers are also major water users.
Traditional cooling systems consume huge amounts of water for heat rejection. In hot, humid climates, where cooling loads are higher, water usage rises with them — even as many parts of ASEAN face periodic droughts.
That is why zero-water cooling technologies are attracting growing attention:
- Immersion cooling uses synthetic fluid in a closed loop and does not require water
- Direct-to-chip liquid cooling can reduce water use by 30–40%
- Heat reuse captures waste heat for other applications, such as hot water or building heating (though this is less useful in tropical climates)
The World Economic Forum has emphasized that water circularity will be central to the next generation of data centers — not just reducing water use, but getting as close as possible to 100% water recirculation.
A Golden Opportunity for Thai Businesses
Amid the challenges, enormous opportunities are emerging — especially for Thai companies that can see them early and move fast.
1. Energy and Utilities
Data centers are becoming the country’s new class of major energy customers. Power producers, solar farm operators, and energy storage developers are all positioned to benefit directly.
2. Cooling and HVAC
The Southeast Asia data center cooling market was worth $279.20 million in 2024 and is expected to grow at a 15.45% CAGR through 2033. Companies with expertise in large-scale cooling systems have substantial room to expand.
3. Construction and Engineering
Building a data center is not just about putting up a structure — it requires electrical design, cooling systems, backup systems, fire protection, and much more. Every project needs contractors who understand data center-specific standards.
4. IT Services and Cloud
As hyperscalers establish local capacity in Thailand, domestic IT services businesses will benefit from lower latency, lower costs, and the ability to deliver more advanced AI solutions.
5. Sustainability Consulting
Every data center must report on ESG, plan for carbon footprint reduction, and build a roadmap toward sustainability. That creates a new market for consultants with the right expertise.
What the BDx CEO Said — And What Thailand Should Hear Clearly
Mayank Shrivastava, CEO of BDx Data Centers, which is headquartered in Singapore and operates in five markets, including six data centers in Indonesia totaling 500 MW, made a striking point:
“Economic value will flow to countries that can convert raw materials into finished products.”
That statement goes straight to the heart of the issue. A country that attracts data centers does not automatically capture the greatest economic benefit. The real winners will be the countries that build a complete ecosystem around those data centers.
Thailand should not be just a “location” for data centers. It needs to become a player across the value chain — from cooling system design to AI applications running on top of that infrastructure.
Looking Ahead — 3 Trends to Watch
1. AI Workloads Will Make Cooling Even Harder
AI GPUs such as NVIDIA’s H100 and B200 consume far more power than traditional CPUs, pushing rack power density from 10–15 kW to 50–100+ kW. Traditional air cooling cannot handle that. New AI-ready data centers will need liquid cooling as a standard feature.
2. Sustainability Regulation Will Tighten
As data centers consume more electricity, governments will begin enforcing rules on maximum acceptable PUE, minimum clean energy requirements, and Water Usage Effectiveness (WUE) reporting. Singapore has already begun with its Tropical Data Center Standard, and other countries are likely to follow.
3. Edge Data Centers Will Become More Distributed
Not every workload belongs in a hyperscale facility. Smaller edge data centers located closer to users will become more common, and they will face cooling challenges on a different scale — no on-site engineering teams, no massive centralized cooling systems, and a much greater reliance on automation and AI-driven cooling.
Conclusion — Heat Will Shape ASEAN’s AI Future
This is a pivotal moment. Tens of billions of dollars are flowing into the region, global technology companies are choosing Thailand as a strategic base, and the data center market is on track to grow 4x in six years.
But none of that will matter unless we solve the heat problem — not just well enough to keep data centers running, but well enough to make them efficient, economically viable, and sustainable in a hot, humid tropical climate.
Whichever country solves that challenge first will become the true AI hub of ASEAN.
For Thai businesses that recognize the opportunity — in energy, cooling, engineering, or IT services — now is the time to act before the window closes.
Looking for advice on IT infrastructure, data strategy, or AI readiness for your business? The Enersys team can help you plan and execute from end to end.
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References
- Southeast Asia could become a booming AI market if its data centers can beat the heat — Fortune
- Thailand strengthens digital hub status with $3.1B data center investments — Light Reading
- Inside Thailand's $3.1bn data center investment wave — RCR Tech
- Thailand data center investments hit US$16.1 billion from 28 projects in 1H 2025 — W.Media
- BOI approves seven data center projects with total investment of $3.1B in Thailand — TechNode Global
- From AI to emissions: Aligning ASEAN's digital growth with energy transition goals — Ember
- Southeast Asia Data Center Cooling Market Size & Growth, 2033 — UnivDatos
- Building energy efficient data centers in the tropics — Data Center Dynamics
- Thailand Data Center Market to Reach USD 6.28 Billion by 2031 — Arizton
- Data centers in Asia Pacific are thirsty and feeling the heat — GRESB
