Energy Ministry officials recently launched an investigation into the illegal, large-scale storage of 200,000 liters of diesel fuel by a data center located in Bangkok’s Rama 9 neighborhood, after being alerted by local residents.
Amid growing public concern over safety and environmental impacts, Bangkok Governor Chadchart Sittipunt announced a temporary freeze in early September on issuing new licenses for large standalone data centers in the capital.
The incident has sparked an intense debate on the pros and cons of investments in data centers. The Thai government is facing criticism for its slow response in establishing an effective regulatory framework for the burgeoning industry.
In response, Deputy Prime Minister Ekniti Nitithanprapas announced that the Data Center Business Policy Committee, of which he is the chairman, would set up four subcommittees to evaluate economic impacts, infrastructure readiness, land use and city planning, and environmental effects.
The infrastructure of the digital economy
Every time we transfer money through an application, watch movies on a streaming platform, or ask questions to AI, data centers operate behind the scenes to process and manage vast amounts of data.
Although most users might never see a data center, it is this infrastructure that is a vital mechanism in enabling quick and continuous daily digital services.
Historically, data centers primarily served as support for online services and cloud systems. The rapid growth of AI, however, has dramatically driven up demand, as AI relies on massive volumes of data and immense processing power.
Consequently, data centers have evolved from mere supporting infrastructure for digital services into a key factor attracting technology investment, driving innovation and boosting national competitiveness.
According to data from McKinsey & Company, global cumulative investment in the data center industry could reach up to $6.7 trillion between 2025 and 2030, with the Asia-Pacific region accounting for 34 per cent of the total.
Thailand is among the countries drawing significant investor interest. Currently, Thailand has 42 commercially operating data centers, with several new projects under construction and development.
The Board of Investment reveals that in 2025, 36 data-center and cloud-service projects had applied for investment incentives, representing an estimated value of approximately 728 billion baht.
Global hyperscalers investing in local data centers include Amazon Web Services, Google, Microsoft, and Alibaba Cloud. Prominent local firms include Advanced Info Service (AIS)—Thailand’s largest mobile operator—True Internet Data Center, and National Telecom. There are also international joint ventures such as STT GDC Thailand, a major partnership between Singapore’s ST Telemedia Global Data Centers and Thailand’s Frasers Property.
Many see Thailand as poised for a massive digital transformation. As global tech giants pour billions of dollars into next-generation infrastructure—spanning artificial intelligence, semiconductors and electric vehicles—the Southeast Asian nation has emerged as a premier investment destination.
However, top economists and international development experts warn that measuring success purely by headline investment figures is a dangerous strategy.
Investment alone is not the end goal
In an exclusive conversation with “Bangkok Biz News”, Arnaud Dupoizat, East Asia director at the International Finance Corporation (IFC), a World Bank Group member, emphasized that attracting capital could not be the ultimate objective.
“Securing data center investment is not an end in itself. These investments must be harnessed to create jobs for Thai people and yield concrete benefits for domestic enterprises,” Dupoizat noted.
He urged Thailand to look past the physical structures and focus on broad AI adoption across the domestic economy—particularly within manufacturing—to boost national productivity and shift the country toward high-value activities.
Think tank’s note of caution
Echoing these concerns, the National Economic and Social Development Council (NESDC) released a comprehensive report examining the international fallouts and realities of data center investments. The report reveals several critical bottlenecks:
● High capital, low permanent jobs
Construction phases generate thousands of temporary roles, estimated at over 45,000 in Thailand over five years. However, global studies (such as Meta’s Hyperscale facility in Sweden or projects in the US) reveal that once operational, facility maintenance requires as few as 160 permanent staff due to automated remote operations.
● Import reliance vs local value addition
Over 60 per cent of data center capital expenditure goes directly into high-tech IT hardware (chips, servers, networking gear) imported from abroad. Local Thai businesses currently absorb benefits largely limited to standard civil engineering, land development and utilities.
● Pressure on resources (power and water)
Single hyperscale facilities can consume as much electricity as 80,000 households. Overseas precedents offer stark warnings: Ireland saw data centers consume 21 per cent of its national power supply in 2023, while Microsoft’s facilities in the Netherlands faced a sharp backlash after pulling 84 million liters of fresh water during severe droughts.
Regulatory and power dynamics
Thailand could learn lessons from region and global benchmarks.
Singapore has set strict limits, capping power-usage effectiveness at 1.3—a high-efficiency benchmark where no more than 30 per cent of extra energy goes toward cooling and overhead.
The centers must arrange at least 50 per cent of the energy from clean or renewable sources. By learning from Singapore, Thailand could explore direct power purchase agreements for sourcing clean energy.
Malaysia (Selangor) requires that at least 30 per cent of goods and services, such as cooling, chip design and engineering, be procured from domestic businesses.
A survey by the Federation of Thai Industries (FTI) found that over 51 per cent of Thai FTI executives worry that the inclusion of the local supply chain remains too limited.
The European Union has made it mandatory to report water and energy metrics to a centralized repository.
Meanwhile, Thailand currently lacks a single primary regulatory agency or specific environmental standards for data centers.
Energy — opportunity or local vulnerability?
Independent economist Praipol Koomsup offers a unique perspective on the energy debate. He suggests treating data centers as large-scale power consumers and charging them higher electricity tariffs than other consumers or businesses.
He believes they can help absorb Thailand’s reserve power margins, potentially easing the availability payment tariff burden borne by standard taxpayers.
However, Dr. Praipol cautions that power availability is not the primary hazard. He highlights water scarcity and heat pollution, as well as environmental hazards.
“Cooling systems require massive water reserves, which could create localized conflicts in water-stressed regions and trigger strong opposition from farmers,” Praipol warns.
“On-site backup fuel storage and heat output pose localized pollution risks if not rigorously monitored,” he adds.
Navigating the road ahead
To turn this investment wave into sustainable prosperity, the NESDC recommends that Thailand establish a single coordinating authority, introduce strategic environmental assessments, enforce local content requirements and encourage advanced technologies like liquid immersion cooling.
Only with clear rules and local integration can Thailand ensure its digital backbone supports the whole nation—not just foreign balance sheets.
By Thai PBS World’s Business Desk
