Hello Reader,
Around the world, unhappiness over data centres continues to mount this week. As I mentioned to Nicholas Spiro of the SCMP a week ago, we shouldn't view Asia through the lens of what is happening in the West - though the danger of negative sentiment spreading is real and cannot be dismissed.
This week I want to talk about Singapore's upcoming Digital Infrastructure Act (DIA), and what we can expect following Thailand's abrupt pause on data centres on Friday.
Singapore's Digital Infrastructure Bill
I'll come straight out and admit it - I haven't been paying attention to the Singapore Digital Infrastructure Act (DIA); I was probably distracted by the DC-CFA2, which saw 200MW of capacity awarded to four winners last month.
The DIA was first mentioned in 2024, and I had heard of ongoing work on it. But signs over the last six months were that it was nearing completion. In February this year, I read the speech of Senior Minister of State Tan Kiat How at an industry event and noted that PUE requirements would be imposed on both old and new data centres under the DIA.
Anyway, when I finally sat down to review the draft Digital Infrastructure Bill in more detail, I was surprised at just how broad it was. After all, the initial impetus came after an Equinix data centre outage in Oct 2023 caused widespread banking disruption. So I expected to see a sharp focus on resilience, and maybe some provisions for critical infrastructure operators to report cybersecurity breaches to the authorities.
What I saw was significantly more: the Bill, if passed in its entirety, will produce an Act that covers not only resilience and cybersecurity for data centres, but also sustainability, economic strategy, and national security. And with a licensing threshold of just 3MW, most commercial facilities will be caught - and large public cloud players are covered too.
Sustainability is a case in point. PUE compliance will be a mandatory condition for holding a data centre licence. While no numbers were offered, the Singapore Green Data Centre Roadmap published in 2024 defines a PUE target of 1.3 over the next decade. And that's the beauty of Singapore, Inc.: the official position is transparent, and everything is considered in detail with scant contradictions - making precise interpretations such as the above possible.
Crucially, the Bill also gives agencies the mechanisms to enforce these provisions. Non-compliance can result in the modification, suspension or revocation of data centre and cloud licences. And for breaches of emissions commitments, it includes provisions to mandate the transfer of eligible international carbon credits.
Too broad, or just thorough?
In my view, the DIA will redefine how data centres and cloud services are regulated in Singapore. And it is this breadth, seen in its entirety, that has likely resulted in some consternation.
To be clear, nobody I communicated with disagreed with the need for a regulation like the DIA. Indeed, when one considers recent military attacks on digital infrastructure and its inextricable role in modern cities, it is clear that national security interests must be considered.
Concerns centred instead on how commercial firms can meet the requirements, and on whether the multiple, sometimes overlapping provisions are onerous. For example, Kaye Hau, in a comment on my LinkedIn post, noted that colocation operators could be made to account for servers they don't own or control.
There are also signs that some areas need further thought. For instance, permitted IT load can be reduced in some circumstances. In essence, the threat of a capacity reduction is almost as serious to an operator as a licensing breach - yet it may not come with the same safeguards.
My sense is that these are a sign of intent than the natural outcome of a Bill this broad, drafted over two years with input from several agencies. The provisions are sound on their own; some further work to knit them together through the ongoing consultation process, would give the industry greater assurance. In the meantime, operators should be preparing now.
A pause in the Land of Smiles
On Friday, Thailand announced that it is putting the construction of some 49 data centres on hold. The reason? To give officials time to finalise new regulations for the wave of new data centres being built in the country.
In a signal of its priority, Thailand will establish uniform oversight of data centres through a National Data Centre Policy Committee - chaired by the deputy prime minister. Ministers from Digital Economy and Society, Interior and Energy will also serve as vice-chairs.
What can we expect? I suspect that officials in Thailand will inevitably look to what other countries in Southeast Asia have done. I would expect Malaysia's throttled approach and Singapore's controlled growth strategy to come under scrutiny.
Of course, there will also be challenges unique to Thailand that will require adaptation. Resource contention will be a massive hurdle, my friend Winston Thomas, who currently lives in Thailand, wrote:
"[The] interior relies heavily on dammed rivers and reservoirs. Data centres require massive amounts of water and electricity, which are already critical resources for Thailand's traditional pillars in agriculture, manufacturing, and construction. Those industries have powerful lobbies, and they will fight over these same resources."
Whatever the case, the data centre landscape in Thailand is set to dramatically change in the months ahead. And for operators still hoping to make it to Thailand, I strongly suspect technical know-how alone will no longer be adequate.
As usual, I would love to hear your thoughts. Simply hit reply.
Regards,
Paul Mah
