Google commits $1 billion to Thailand, marking its first data centre investment in the kingdom. Prime Minister Paetongtarn highlights the digital economy’s potential to reduce inequality and overcome structural issues impeding growth as Thailand shifts focus.
Thai Prime Minister Paetongtarn Shinawatra on Monday evening heralded a breakthrough investment by Google in Thailand of $1 billion. The investment will see the tech giant establish its first database in the kingdom. The PM praised the efforts of Srettha Thavisin, who particularly helped foster this week’s announcement. She also highlighted the strategic importance of the kingdom’s growing digital economy in fighting inequality. At the same time, it allows the country to look past its chronic structural problems impacting manufacturing. The announcement of the investment was made during a visit by Google’s Chief Investment Officer, Ms. Ruth Porat. Ms. Porat attended an exhibition staged by the government on Monday evening at Government House, attended by top cabinet ministers.
On Monday evening, Google announced that it will locate its first data centre in Thailand. The investment is estimated at $1 billion. This comes after talks in the United States in November 2023 between former Prime Minister Srettha Thavisin and Google.
Indeed, those talks produced a Memorandum of Understanding between the worldwide tech giant and the Thai government, which led to this week’s landmark investment.
Thailand sees a major opportunity for its economy as manufacturing declines due to chronic structural issues
The news is certainly welcome and critical for the Pheu Thai-led government’s plans to develop the economy. For instance, last Thursday, the Office of Industrial Economics (OIE) confirmed that Thai manufacturing will contract by up to 1% this year.
At length, structural issues and a range of problems are hindering manufacturing growth in Thailand. In the meantime, the possible development of digital business activities represents an opportunity for the country’s population.
Certainly, the kingdom has one of the most engaged audiences worldwide when it comes to online applications and social media. A January 2024 study shows the Thai population ranks 17th in the world for online engagement.
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In the meantime, over 91% of Thai adults use Facebook, while 90.5% use the LINE application. At length, the announcement by Google took place on Monday at Government House. Prime Minister Paetongtarn Shinawatra was on hand with top ministers at an exhibition showcasing the growth of Thailand’s digital economy.
Google’s $1 billion investment underlines US tech sector interest in Thailand’s digital expansion efforts
The guest of honour was Ruth Porat, Chief Investment Officer of Google (or Alphabet). Certainly, Ms. Porat is an influential figure. In 2023, Forbes named her the 16th most powerful woman in the world.
At the same time, Fortune magazine rated her as the eighth most powerful. Prime Minister Paetongtarn was keen to begin with the efforts made by her predecessor to develop Thailand as a digital centre, particularly the growth of data centres in the kingdom.
Certainly, this began with the government of General Prayut Chan-o-cha when server company AWS announced the first major investment in Thailand. In summary, that was back in October 2022.
Amazon’s investment in Thailand was a much-needed boost for the digital economy. However, Srettha Thavisin’s efforts, including proposed regulatory changes to allow the direct purchase of green energy in Thailand, have been successful. This Google announcement, in particular, is of critical importance.
Thailand’s developing business-friendly environment promises to be key to attracting tech giants like Google
On Monday, Ms. Paetongtarn underlined the popularity of Google products and services in Thailand. At the same time, she heralded Thailand’s new business-friendly environment for the computer services sector.
“We aim to boost self-improvement, productivity, and innovation, thereby reducing inequalities and providing greater opportunities for all,” she explained. The PM referred to the Direct Power Purchase Agreement (Direct PPA) championed by her predecessor.
However, she did not mention the competition across Southeast Asia and the Asia-Pacific between US and Chinese firms. In particular for Thai markets.
For instance, many US firms will not be linked or associated with Chinese technology. Hence, there has come to be dual-path development of data centres and data technology services.
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Indeed, this may become a point of contention, as the United States has consistently urged its allies, including Thailand, not to use Huawei technologies and 5G systems.
In truth, China and the United States are already engaged in a tech war, which extends to the data centre sector in particular.
The PM explained that the growth of the digital economy was an opportunity for Thailand to make progress in reducing inequality.
“We aim to boost self-improvement, productivity, and innovation, thereby reducing inequalities and providing greater opportunities for all,” she declared. In the course of her address, the PM highlighted the government’s commitment to developing advanced and robust digital infrastructure. Significantly, she also insisted that Thailand was technologically neutral.
Google’s investment further boosts Thailand’s push toward digital transformation and leadership in society
In the meantime, the kingdom’s population has embraced digital activities online, including self-improvement efforts and online income generation.
“We are pleased to acknowledge that Google and the Board of Investment have been working closely together to explore the establishment of the first data centre in Thailand,” Ms. Paetongtarn announced.
After that, the PM outlined a vision of Thailand as a hub for Google. She said she hoped the kingdom would be able to position itself as a leader in the Southeast Asian technological sector.
In effect, the Thai government would create the environment for firms such as Google to establish in Thailand and prosper in the years to come. Indeed, the PM acknowledged the singular importance of Google in Thailand.
“Google’s services have become an integral part of daily life for many Thais,” expanded Ms. Paetongtarn. After that, she mentioned the tech giant’s string of services such as YouTube, Google Search, Gmail, and its cloud service platform. Undoubtedly, these are part of daily life for a vast majority of the Thai public.
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