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G42 and partners are building data centers in Vietnam for USD 1 bn: A consortium led by state-owned AI firm G42 is building three data centers in Vietnam, backed by USD 1 bn in consumption commitments, according to a statement. The consortium — which includes technology and telecom player FPT and Viet Thai Group — will also roll out cloud computing services in the Southeast Asian country. Details regarding the timeline and computing capacity were not disclosed.
Why it matters: It signals the rise of Digital Embassies
The sovereignty gap — and how G42 is solving it: Earlier this year, G42 rolled out its Digital Embassies framework and Greenshield, a setup that allows nations to scale AI capabilities securely while retaining regulatory authority over their data and systems. “[The agreement] represents a new model for national AI transformation — one built on sovereignty, partnership, and purpose,” G42’s Chief Commercial Officer Ali Al Amine said.
REMEMBER- Vietnam is embracing a comprehensive regulatory approach to data: Vietnam passed a string of regulations over the last six months requiring strict data localization and security requirements for data centers, including the local storage of sensitive personal data of Vietnamese citizens. The regulatory approach means more demand for locally hosted data centers in the country.
The race for digital sovereignty
The scale of the market: The global sovereign cloud market is currently valued at USD 123 bn, as over 70 countries enact data localization laws. Sovereign cloud spending is forecast to grow by 35% this year alone, with the Middle East and Africa leading at nearly 90% growth.
Who else is following this playbook? Riyadh has also been courting sovereignty-sensitive international clients for data center buildouts, embracing a regulatory approach that incentivizes local builds while providing different protection assurances for cross-border data transfers.
Background: This comes on the heels of CEPA
CEPA is the wind in the sails: The UAE-Vietnam Comprehensive Economic PartnershipAgreement (CEPA) came into effect last week — bringing into force the trade and market-access measures agreed upon when the pact was signed in 2024. Vietnam remains the UAE’s largest ASEAN trading partner, with bilateral non-oil trade coming in above USD 16 bn in 2025.
