After Nvidia and Apple, Alibaba Chases Vietnam: New Data Center to Boost Control and Meet Local Laws

Alibaba Group Holding Limited BABA plans to construct a data center in Vietnam to meet legal requirements for local data storage and to cater to increasing demand in one of Asia’s fastest-growing economies.

Currently, Alibaba rents server space from Vietnamese state-owned telecommunications companies Viettel and VNPT. 

The arrangement follows Vietnam’s contentious 2022 law mandating that companies store data within the country—a regulation that sparked resistance from major tech firms like Alphabet Inc GOOG GOOGL Google and Amazon.Com Inc AMZN, the Nikkei Asia reports.

Dang Minh Tam, Alibaba Cloud’s solution architect lead, noted that the company uses colocation services from these state companies to store client data locally. It also maintains backups across its server farms in regions including Taiwan and Singapore. 

The move is part of Alibaba’s strategy to ensure better security and control over its data and potentially reduce costs and liability issues associated with multi-company data management. 

Companies including Nvidia Corp NVDA, Apple Inc AAPL, and Lam Research Corp LRCX have reached out to Vietnam to diversify their supply chain base amid heightening geopolitical tensions between the US and China.

Lam Research weighed the supply chain shift to Vietnam, with the Vietnamese government canvassing the former to commit $1 billion to local production efforts.

 Apple suppliers in Vietnam increased by 40% to 35 in 2023.

Meanwhile, Nvidia tapped Vietnamese tech firms for AI development.

Alibaba stock lost over 11% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF PGJ and Tidal Trust II CoreValues Alpha Greater China Growth ETF CGRO.

Price Action: BABA shares are trading higher by 1.28% at $75.78 at the last check on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors

Alibaba Photo by zhu difeng on Shutterstock