DAMAC's Thailand data centre expansion faces Bangkok scrutiny

A large data centre in central Bangkok near Praram 9 Hospital has drawn public attention after residents and local business operators complained of a smell resembling fuel, prompting inspections by government agencies. The complaints have also raised questions over who owns the facility, amid assumptions among some members of the public that it may be backed by Chinese investors expanding their technology and artificial intelligence businesses in Thailand.

The project is in fact a joint venture between EDGNEX Data Centers by DAMAC, an affiliate of Dubai-based DAMAC Group in the United Arab Emirates, and PROEN Corp Public Company Limited, or PROEN.

EDGNEX holds a 70% stake as the principal investor and is responsible for managing the data centre, while PROEN holds 30% and contributes its expertise in technology, internet networks, customer relationships and the Thai market.

The project near Praram 9 Hospital is therefore more than a single data centre in an urban community. It represents the starting point of a plan to establish a network of data centres in Thailand under a US$1 billion, or approximately THB32.5 billion, investment programme.

DAMAC chooses Thailand as its first ASEAN base

Hussain Sajwani, founder and chairman of DAMAC, said the group had expanded its data centre business into Southeast Asia, selecting Thailand as its first market because of the country’s potential in digital innovation, smart technology, tourism and services. DAMAC intends to support Thailand’s digital economy by providing infrastructure for modern businesses driven by artificial intelligence, with a target of expanding its data centre capacity in the country to 100 megawatts.

“The announcement of a THB32.5 billion investment to establish a DAMAC Group data centre is only the beginning of the group’s expansion in Thailand. Besides continuing to expand its data centres, the group is also exploring real estate investment opportunities.”

Plans for 5-6 data centres within three years

Kittipan Sri-bua-iam, chief executive officer of PROEN Corp Public Company Limited, said DAMAC was a major property group from the United Arab Emirates that was expanding into the data centre business and operated 16 facilities in 11 countries.

Thailand is the first country in the region in which DAMAC has chosen to invest. The group plans to develop approximately 5-6 data centres within three years, involving a combined investment of US$1 billion, or approximately THB32.5 billion.

The first project, near Praram 9 Hospital, will begin with a capacity of 5 megawatts and an investment of approximately THB1.75 billion. Capacity will subsequently be increased by another 5 megawatts, with the entire project planned to reach 20 megawatts.

The development comprises two multi-storey buildings with a combined area of approximately 19,000 square metres. Each building is designed to support 10 megawatts of power capacity and will be equipped with electrical, backup, cooling and security systems for round-the-clock operations.

Kittipan said the project would operate as a carrier-neutral facility, allowing customers to choose from several network providers. It would also meet the Tier III standard, enabling critical systems to undergo maintenance without requiring the entire facility to suspend operations.

Target customers include large companies, cloud service providers, telecommunications operators, digital platforms and organisations requiring high-performance computing systems.

Following the first project, DAMAC and PROEN plan to develop another three or four data centres, each with a capacity of approximately 10 megawatts. Si Racha is among the locations under consideration, with the possibility of developing a data centre powered by clean energy.

AI drives demand for high-capacity data centres

Growth in cloud computing and artificial intelligence, particularly generative AI and large language models, is a major driver of the investment. These technologies require large numbers of high-performance processing chips.

As computing equipment is installed at greater density, electricity demand per rack also rises. Data centre developers must therefore invest more heavily in power distribution, cooling, emergency generators and backup systems to maintain uninterrupted services.

Kittipan said that although data centre investment in Thailand had increased, most projects were developed to support the investors’ own services and might therefore be insufficient to meet demand from AI businesses.

At the same time, more Chinese and European AI companies are developing technology in Thailand, contributing to expected growth in demand for data centres capable of supporting high-performance computing.

DAMAC and PROEN regard Thailand’s geographical location, energy security and support for renewable energy as strengths that could attract global technology companies and cloud service providers to use the country as a base.

Fuel-like smell prompts inspections

However, DAMAC’s data centre expansion plan has encountered a test following complaints about a fuel-like smell near the project. The complaints prompted inspections by the Bangkok Metropolitan Administration, the Ministry of Energy and the Pollution Control Department.

The Department of Energy Business found approximately 200,000 litres of diesel stored for emergency generators without the licence required under fuel-control legislation. The department subsequently ordered the fuel to be removed and filed a complaint for police to proceed under the law.

The Pollution Control Department collected water samples and inspected drains surrounding the site to determine the source of the smell. Laboratory analysis and the investigation have not been completed, meaning official findings are required before the cause and responsibility can be established.

The incident has drawn attention to another aspect of data centres. Although they may appear from the outside to be buildings housing servers, their operations require electricity around the clock, cooling systems, emergency generators and stores of backup fuel.

When large data centres are located in urban areas or near communities, oversight must therefore cover building classifications, fuel storage, water use, noise controls, fire prevention and environmental impacts.

DAMAC’s business empire

DAMAC Group is the business empire of Hussain Sajwani, a billionaire from the United Arab Emirates. Its interests encompass property, capital markets, hotels and resorts, manufacturing, catering, high-end fashion and data centres.

DAMAC grew from luxury property development before expanding into hotels and branded products. The group acquired Italian fashion brand Roberto Cavalli and Swiss jewellery brand de GRISOGONO.

In recent years, DAMAC has moved into artificial intelligence and digital infrastructure, investing in technology companies including Anthropic, xAI and Mistral, while using EDGNEX to spearhead the overseas expansion of its data centre network.

The case involving the data centre near Praram 9 Hospital is therefore more than a complaint concerning a single project. It is a significant test of whether DAMAC can pursue its THB32.5 billion digital expansion in Thailand while complying with the law and coexisting with communities in central Bangkok.

Source: Thansettakij