Overwhelmed By Foreigners, Indonesia’s Neighbors Make The US’s Beard Burn

Jakarta, CNBC Indonesia –Foreigners are flocking to Southeast Asia to build data centers, as the popularity of artificial intelligence (AI) technology increases.

In addition to Malaysia, Vietnam is a country that is being targeted. However, the Vietnamese government plans to tighten regulations related to data protection and restrictions on data transfers abroad.

This makes it difficult for social media platforms and data center operators to grow their businesses in Vietnam.

US technology companies have warned the Vietnamese government about the impact if the country tightens data regulations.

For information, Vietnam has a population of 100 million and is one of the largest markets for Facebook and other online platforms.

Vietnam is also targeting foreign investment to enter its country in the data center industry sector in the next few years. However, this ambition will be difficult to achieve if Vietnam insists on implementing tightened data regulations.

“The draft regulations will make it difficult for technology companies, namely social media platforms and data center operators to target customers who depend on them every day,” said Jason Oxman, Head of the Information Technology Industry Committee (ITI), quoted from Reuters, Monday (4/11/2024).

The association represents tech giants such as Meta, Google and data center operator Equinix.

Vietnamese officials said the draft rules have been discussed in parliament. They are intended to make it easier for authorities to access information, and are being pushed by the Ministry of Public Security.

The Ministry of Public Security and the Ministry of Information did not respond to Reuters’ requests for comment.

Vietnam’s parliament has been debating the draft rules for a month and is due to pass them on Nov. 30.

Vietnam’s existing regulations already restrict cross-border data transfers in some circumstances, but they are rarely enforced.

It is unclear how the new rules, if adopted, would affect foreign investment in Vietnam.

Reuters reported in August that Google was considering building a large-scale data center in southern Vietnam, before the rules were discussed in parliament.

Research firm BMI said Vietnam could become a major player in Southeast Asia’s data center industry.

Tech giants have long benefited from the free flow of data across borders, cutting overhead costs and supposedly improving service. Some jurisdictions, such as the European Union and China, have restricted data transfers abroad to protect data privacy within their countries and keep sensitive information out of reach of foreign parties.

Under the new rules in Vietnam, Indonesia’s neighbor requires companies to share data they collect with the Communist Party of Vietnam and other government agencies.

“These new rules are going to be very challenging for almost all private companies,” said Adam Sitkoff, executive director at the American Chamber of Commerce in Hanoi.

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SOURCE : CNBC INDONESIA