Thailand billionaire Sarath Ratanavadi plans to invest $271 million, doubling data centre capacity to 50 MW by March.
TakeAway Points:
- Gulf Energy Development intends to double its energy use to 50 megawatts by investing an additional $271 million in the expansion of its data centre in Bangkok.
- Gulf Energy, which targets sectors requiring high data security, has teamed with Google Asia Pacific for cloud computing, with an emphasis on cybersecurity and artificial intelligence.
- Gulf Energy’s non-power operations are anticipated to greatly increase income in the face of growing demand for data centres, despite an 8.5% decrease in shares this year.
Data Centre Expansion
Energy billionaire Sarath Ratanavadi, Thailand’s second-richest person, is accelerating his push into data centers to tap a booming market fueled by rising demand for cloud computing and artificial intelligence. His energy company, Gulf Energy Development Pcl, and its partners plan to spend an additional 10 billion baht ($271 million) to double their outlay on a data centre facility in suburban Bangkok.
The expansion will increase the center’s energy consumption to 50 megawatts from a previously announced 25 megawatts, with completion expected in March, Gulf Energy Chief Financial Officer Yupapin Wangviwat told reporters on Thursday.
Sarath is expanding his empire into virtual banking, cryptocurrency trading, and other technology businesses as electricity generation in Southeast Asia’s second-biggest economy has excess capacity. Demand for data centers is rising in the region, with global tech companies spending billions of dollars to spur cloud computing and AI services.
“We set the expansion of the second phase now because we expect a surge in demand for our data center services. A jump in AI adoption and cloud computing will substantially increase demand for our data center bandwidth.” Sarath said this at the press conference in Bangkok.
Gulf Energy and Alphabet Inc. Partnership
Earlier this week, Gulf Energy and Alphabet Inc. held a joint briefing about their cloud computing partnership in Thailand. Gulf Edge Co., a unit of Gulf Energy Development, has entered into a partnership with Google Asia Pacific Co. to jointly invest in the cloud business in the Southeast Asian nation.
The deal will allow Gulf to further expand its digital infrastructure business and respond to the rapidly increasing demand for data storage and processing within Thailand’s digital infrastructure ecosystem, the company said in an exchange filing Tuesday.
The venture will operate the “Google Distributed Cloud air-gapped configuration” in Thailand. “Collaboration marks the initiation of a strategic alliance in cloud, cybersecurity, and AI in the country to advance digital transformation and innovation,” Gulf Energy said in the statement.
GDC is a fully disconnected sovereign cloud solution that requires no connectivity to the public internet, providing high stability and data security. Target customer groups include industries requiring storage and processing of sensitive or confidential data, such as healthcare, energy and utilities, and public safety services.
Market Dynamics
Shares of Gulf Energy have declined 8.5% this year, compared with a 7.5% drop in the benchmark SET Index. Despite this, Sarath has a net worth of $9.1 billion, making him Thailand’s richest person after property tycoon Charoen Sirivadhanabhakdi, according to the Bloomberg Billionaires Index. Technology and other non-power businesses are expected to contribute a “significant proportion” of Gulf Energy’s revenue in the near future, said Sarath, declining to elaborate.
An AI data center boom is coming, according to Jefferies, which noted that demand for data center space has increased between 10% and 20% each year for most of the past 15 years.
“However, in the past two years, demand has exceeded 30% in most markets, with no signs of slowing,” the investment bank’s analysts wrote in a June 18 note.
They expect data center growth to “remain robust,” but power generation constraints, supply chain issues, and labor market limitations will likely curb the rate of acceleration. Data centers house the equipment needed to store and process the vast amounts of data used by computing systems, with AI-related models requiring even more data processing than traditional computing.
