Thailand needs data centres but must prepare to use them wisely

Thailand needs data centres to underpin its artificial intelligence (AI) economy, speed up digital services and strengthen national security, but investment in the facilities must be matched by greater business readiness, improved workforce skills and regulatory clarity, executives told a Bangkok forum on Tuesday (October 20).

The message emerged from the “Data Centre — Built for the Intelligence Economy” discussion at Nation Forum 2027: Thailand's Agenda, where speakers argued that building infrastructure was only the first step towards capturing economic value.

Preesan Rakwatin, acting senior executive vice president of the Digital Economy Promotion Agency (DEPA), pointed to financial services, smart technologies and industries in eastern Thailand as areas requiring rapid access to data. Facilities close to users could reduce delays, but their value would ultimately depend on whether businesses were prepared to make use of them.

“Data centres can be built in Australia or Singapore, but what matters is who will use the data, how quickly it can be used and what value it will create for Thailand,” he explained.

Business readiness remains a challenge

Preesan cited a survey that put readiness to use AI effectively at only about 5%. He identified poor data quality and weak connections between systems as obstacles that could persist even as Thailand expanded its data centre capacity.

The agency was therefore seeking to connect Thai hardware and software developers with small and medium-sized enterprises (SMEs), enabling more businesses to adopt useful digital tools rather than simply gain access to additional infrastructure.

Encouraging firms to use Thai-made software would require recognised standards, more affordable technology and a workforce able to adapt, he argued.

Partial government financial support could ease SMEs' cash-flow pressures, while tax incentives and training could help workers adapt to new software as factories upgraded their machinery.

Preesan also highlighted the need for incentives to help Thai software businesses expand overseas, noting that insufficient funding remained an obstacle. Competition was no longer limited by national borders, and local firms needed support to expand beyond the domestic market.

Another priority was clarity about data protection and storage. He questioned what happened to information when businesses sold or used software across borders, warning that uncertainty over where data was held could undermine confidence.

“Regulations and rules must be clear so operators can prepare without confusion. The government has an important role in supporting private businesses so they can grow and expand,” he argued.

Local data centres could help retain more economic value

Smith Banomyong, chief strategy officer of Gulf Development Public Company Limited (GULF), also made the case for domestic data centres, noting that nearby facilities could accelerate bank-transfer verification and reduce delays in services such as video streaming.

With the widespread use of mobile phones, online platforms and digital payments, Thailand already had substantial demand for such services. The question was where the systems supporting them were hosted and how much spending remained in the Thai economy.

Recalling the Covid-19 lockdowns, Smith noted that Thailand had run a services deficit of roughly US$3 billion a month even when tourism had virtually stopped. He estimated that digital services accounted for about one-third of that figure, or US$1 billion (around THB30 billion) a month.

Thai companies paid for accounting software and other overseas digital platforms, while individual users and online sellers relied on international technology providers.

When the associated data services were hosted abroad, he argued, more of that expenditure flowed out of Thailand. Domestic data centres could help the country retain part of the economic value, even when the service providers were foreign companies.

Data centres provide the foundation for higher-value jobs

Smith compared digital infrastructure with a road that enables businesses to develop around it.

“A road itself may create few jobs, but without it there would be no hotels or restaurants at the destination. Data centres are similar: the higher-value jobs come from what is built around them,” he explained.

Although data centres might employ relatively few people directly, he argued that they could provide the foundation for more valuable economic activities, including software development and AI engineering.

For Thailand, the broader opportunity was therefore not confined to constructing facilities. The infrastructure could support the development of new businesses and help raise economic productivity as the country's workforce declined.

Energy and water concerns require informed assessment

Smith also addressed concerns about electricity demand, water consumption and emergency fuel storage. He contended that centralised data centres could use cooling systems that were more efficient than those used in separate computer rooms maintained by individual companies.

He encouraged the public to consider Thailand's circumstances rather than assume that concerns arising in water-scarce regions, such as Nevada in the United States, applied equally to the Eastern Economic Corridor.

Citing figures for eastern Thailand, he put annual water volumes at approximately 12 billion cubic metres, with roughly 8 billion cubic metres flowing to the sea.

Large shopping centres also used backup generators and stored fuel, he noted, arguing that discussions about data centre safety should be based on a clearer understanding of how such facilities operated.

He also questioned public attitudes towards international investment, observing that there had previously been concerns about Thailand falling behind Malaysia in attracting major technology investment, while some people now appeared reluctant to welcome data centre projects.

Beyond their commercial value, Smith regarded domestic data centres as a matter of national security.

Relying entirely on systems abroad could leave Thailand exposed if geopolitical tensions led to restrictions on access to AI services or other digital infrastructure.

Developing domestic data storage and processing capabilities was therefore important not only for economic growth but also for the country's long-term technological security.

The speakers' shared message was that Thailand needed data centres to compete in the digital economy, but building facilities alone would not be enough.

Realising their potential would depend on preparing businesses to use technology effectively, developing skilled workers, establishing clear regulations and improving public understanding of the infrastructure required for Thailand's digital future.