Will data centers drive #CNVRG next growth? 🤔 #getrichpodcast #marketmovers #tech #fintok
A speaker discusses whether data centers will drive future growth, expressing initial skepticism due to high electricity and infrastructure costs in the Philippines. They argue that significant growth would only occur if the Philippine government mandates local data storage for national security reasons, forcing hyperscalers like Meta, Google, and Amazon to build facilities in the country.
Summary
The speaker addresses the question of whether data centers will be a major growth driver, providing nuanced analysis of the regional and regulatory landscape. Initially, they state the proposition 'doesn't make sense' due to prohibitively expensive electricity, basic goods, and services in the Philippines. They reference the precedent of Malaysia's data center expansion in Asia, noting that Malaysia successfully launched multiple REITs focused on data centers as a result of being an attractive hub for regional presence. The speaker acknowledges that the Philippines is 'already late' to this trend. However, they introduce a critical distinction: recent regulatory developments from the BSP (Bangko Sentral ng Pilipinas) have introduced data localization requirements for national security reasons, mandating that data be stored within the country. The speaker explains that major hyperscalers—Facebook, Meta, Google, and Amazon—would only build substantial data center infrastructure in the Philippines if such local data storage requirements become mandatory government policy. Without such mandates, the speaker's assessment is that data center growth will not be a significant economic driver. The outcome ultimately depends on whether the Philippine government enforces strict data localization requirements.
Key Insights
- The speaker argues that data center growth doesn't make economic sense for the Philippines due to expensive electricity and basic service costs compared to other regional alternatives.
- Malaysia successfully became a regional data center hub and launched multiple REITs for data centers by being an attractive location for companies seeking Asian presence.
- The Philippine government through the BSP has already introduced data localization requirements mandating data be stored within the country for national security reasons.
- Hyperscalers like Meta, Google, and Amazon will only build significant data center capacity in the Philippines if the government makes local data storage mandatory rather than voluntary.
- The speaker's overall assessment is that data centers will not be a major growth driver unless government mandates force hyperscalers to invest in local infrastructure.
Topics
Transcript
[0:16] Um , yes, I think the question about data centers arises because of what we see from the outside. Yes. And my first thought was that it doesn't make sense. That is, just to give my initial feedback. And I'll explain why: because electricity, basic goods, basic services are too expensive in this country. What we have seen in recent years is the growth of the number of data centers. Let's say you want to be present in Asia. Most data centers were deployed in Malaysia. Yes. And that's why Malaysia launched, I do [0:46] n't even know how many REITs, but it was a REIT for data centers. Mm. But I mean, that's exactly what happened . In…
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