TikTok doubles down on Southeast Asia with $25B data centre investment
The social app is building three data centres and hosting infrastructure projects in Thailand to support regional growth
Welcome back to Asia Tech Review, your curated digest to keep up to date with tech news across Asia.
Today, we are taking a look at TikTok’s data centre push in Southeast Asia, one of its most important markets, and we ask whether reports of a huge round for DeepSeek show if China has picked a national champion for AI infrastructure.
TikTok is spending $25 billion to develop data centres in Thailand to support Southeast Asia growth
TikTok has won approval to three data centres in Thailand worth a massive $25 billion, or 842 billion THB, according to Thailand’s Board of Investment (BOI).
The social app firm will develop infrastructure facilities in Bangkok, Samut Prakan and Chachoengsao provinces, all of which will be regional hubs to store and process data to support growing demand for the service across Southeast Asia.
As is often the case with these projects and government entity announcements, there’s a public angle to expand the feel-good factor. TikTok has pledged to develop e-commerce training and digital literacy programmes to help local Thai businesses and entrepreneurs upskill and use its platform.
The spending dwarfs TikTok’s most recent data centre investments, and it signals just how important Southeast Asia is for the business. TikTok said last November that it crossed 460 million registered users in Southeast Asia last November. That’s a large chunk of its one billion-plus total user base but it’s also identical to the region’s population so there will be double counting involved. TikTok Shop, though, has become an equal rival to Shopee and Lazada in the region’s e-commerce battle.
Elsewhere in the world, TikTok announced its plans for a second data centre in Finland worth €1 billion in April. That’s part of a broader €12 billion Project Clover plan to give users in Europe ‘data sovereignty,’ in response to concerns that data was making its way back to Beijing. TikTok’s other Europe-based data centres are located in Ireland and Norway.
Data sovereignty is a major concern in Europe, but the issue hasn’t emerged in Southeast Asia where countries like Malaysia and Thailand are battling to secure billions in cloud investment from hyperscalers and tech firms.
Alongside TikTok, BOI also approved a 46 billion baht ($1.4 billion) investment from a division of UAE-based DAMAC Group and a proposed 24.6 billion baht ($746 million) project from Bridge Data Centres, a project backed by Bain.
In recent years, Microsoft, Google and Amazon have collectively pledged to invest more than $7 billion into data centres and cloud infrastructure in Thailand across differing time periods. A large part is political but the trend shows Thailand is a major destination for tech infrastructure. That has seen push back from rights groups concerned over the potential impact on water scarcity and pollution.
China picks DeepSeek as a national AI infrastructure champion
The debacle with Manus seems to have galvanised China into picking one of its primary AI horses, and that looks like being DeepSeek.
Multiple media reports yesterday linked DeepSeek with an investment from The China Integrated Circuit Industry Investment Fund, aka “Big Fund”, an 11-year-old entity first developed to enable Chinese self-sufficiency in the semiconductor industry. It added an AI-focused fund in January worth $8.8 billion.
A deal could value the AI business at $45-$50 billion, according to the various reports which we will link to at the bottom for clarity.
A few important things are happening here.
Firstly, we know DeepSeek is raising outside capital for the first time, having to date been funded entirely by founder Liang Wenfeng and his High-Flyer hedge fund.
Alibaba and Tencent, which have backed almost all of China’s emerging AI firms, have already been linked with investment talks. But it makes sense that the stakes have gone from China’s tech giants (a big deal in itself) to a Chinese government self-sufficiency fund given the issue with Manus.
China wants to undo the Meta-Manus deal, as we well know, and there’s plenty of chatter that a strong response will dissuade other founders from following the ‘Singapore washing’ route. But, there’s also a less punitive option, and that’s to crown local champions. DeepSeek is certainly one of those. And it may explain how the reported valuation went from $10 billion two weeks ago to $50 billion.
Backing from two of China’s top tech firms and the state fund would give the firm a massive supply of cash, and networks to take advantage of any/all of China’s own evolving ecosystem. That’s an ecosystem that’s maturing first, as we noted on Monday.
But here’s the kicker: DeepSeek is already doing that.
Its new V4 model was already trained on Huawei’s ‘Nvidia-killing’ (!) chips and hardware. It was the first company to do so.
That’s not only helped DeepSeek crack the domestic market for customers, but orders for Huawei’s chips and servers are surging with China’s big tech firms among those snapping them up. (The rising price of Nvidia products helps, too.)
There are even supercomputer data centres trying (perhaps too early) to build out entire facilities using only Chinese components. They’ll need the software and smarts to run that, so it makes sense that DeepSeek is among those contenders.
DeepSeek started out as a rogue element. It was an unexpected disruptor that showed the world Chinese AI firms can do more with less. It makes absolute sense that it is given greater alignment with the tech self-sufficiency push.
That’s good for China, good for DeepSeek and it sets a more positive example for founders and startups coming up through the system.
Those media links:
In other interesting news you won’t want to miss:
Vibe coding platform Emergent is reportedly in talks to raise $250 million at a valuation of $1.5 billion, a 5x jump on the $70 million round it raised in January. The company has raised $100 million to date from VCs including Lightspeed, Khosla, Prosus and SoftBank’s Vision Fund [The Economic Times]
Enterprise software company Freshworks is cutting 11% of its workforce, 500 jobs, following a trend started by rival Atlassian as the software industry navigates the impact of AI [Reuters]
Korea’s Coupang shares fell 16% after it posted a $266 million net loss on account of the impact of a $1.2 billion customer voucher programme that followed last year’s huge data loss. Revenue grew 8% annually, but the firm is struggling to shake off the fallout of the incident. [Seoul Economic Daily]
Indian e-commerce firm Meesho cut its losses thanks to strong growth across the board, but profitability looks some way away for now [Reuters]
Singaporean politicians passed a motion to prevent job losses due to AI following 7 hours of debate. Maybe they can let us all know what the plan is? [Channel NewsAsia]