APAC Data Center Investment Hits Record $11.6B as AI Reshapes Market

The Asia-Pacific data center market is undergoing a rapid transformation driven by artificial intelligence, with investment reaching a record USD 11.6 billion in 2025 and the construction market projected to hit USD 83.88 billion by 2031. Two industry reports released this week detail how AI workloads are reshaping regional infrastructure, shifting demand away from traditional hubs toward markets with better power access. Ada Choi, head of research for Asia Pacific at CBRE, stated that "Asia Pacific's data centre market is undergoing a significant reordering," with growth shifting from traditional Tier I markets toward power-advantaged locations. China currently dominates the region, commanding 53% of power capacity and over 41.81% of investments in 2025. Alibaba Group announced a planned USD 69.05 billion investment in China's AI infrastructure over three years, the single largest commitment cited.

Mature markets face mounting constraints. Singapore and Hong Kong grew only 6% to 8%, hampered by power shortages and technical limitations for AI-related demand. South Korea restricted new projects in Greater Seoul to 10MW. By contrast, Johor, Malaysia, recorded the fastest growth at 53% year-on-year in live capacity, followed by Melbourne at 37%. Matt Madden, senior managing director of data centre solutions for Asia Pacific at CBRE, observed that "for neocloud providers, access to power is increasingly outweighing traditional location advantages," directing demand toward markets that can support high-density campuses at scale, particularly across India, Malaysia, and parts of Southeast Asia. CBRE's report identified neocloud providers as an emerging demand segment, with entity-level transactions reaching USD 8.3 billion, signaling a maturing market.

Major operators are expanding to capture AI demand. EdgeConneX initiated a 1.4 million sq. ft. AI-ready campus in Osaka, Japan. ESR launched the second phase of its Kwai Chung Data Center in Hong Kong. Google is developing the TalayLink submarine cable connecting Australia and Thailand, while Microsoft is expanding cloud regions into India and Taiwan.