Chinese tech firm Alibaba is planning to build a data center in Vietnam, according to a report from Nikkei Asia.

Alibaba currently uses government-owned colocation facilities, such as those operated by telco Viettel and VNPT.

The timelines, costs, and other details of the proposed data center have not yet been disclosed.

Vietnam’s data localization law, in effect since 2022, requires companies to store user data locally.

Dang Minh Tam, solution architect lead at Alibaba Cloud, confirmed that data is currently stored locally, adding that Vietnam has high potential as a market and offers “a lot of space to grow.”

Data localization laws and ESG requirements may be motivating Alibaba to construct its own facility in the country.

Nikkei said customers of local operators Viettel and VNPT, such as Microsoft and Alibaba, have been demanding environmental, social, and governance improvements.

Nguyen Dinh Tuan, technical department manager at military-run Viettel, said the company does not currently have the tech in place to track and optimize water use, nor does it use a great deal of renewable energy. However, the telco is aiming to operate using 30 percent renewable energy by 2030.

Alibaba currently operates 16 cloud regions with 33 availability zones outside of mainland China. In APAC, the company’s cloud regions include Jakarta, Indonesia with three availability zones; Tokyo, Japan with three availability zones; and another three availability zones in Singapore.

In mainland China, Alibaba has 14 cloud regions and 56 availability zones.

2023 saw the cloud operator build a new local cloud region in Wuhan, China, and 2022 saw the build of cloud regions in Seoul, South Korea; and Bangkok, Thailand.

In Vietnam, Viettel powered up its data center in Hanoi last month.