China's titans push cloud AI

China's titans push cloud AI

Mr Supparat, left, clinches a cloud service deal with Mr Chang between True IDC and Tencent Thailand.
Mr Supparat, left, clinches a cloud service deal with Mr Chang between True IDC and Tencent Thailand.

Chinese tech giants are flocking to invest in Thailand's growing cloud-based artificial intelligence (AI) services sector, worth an estimated US$157 million (4.98 billion baht) this year.

The major players on the scene are Tencent, which has partnered with True IDC to implement local cloud computing services; Huawei, which also offers local cloud; and Alibaba, which offers cloud services with data stored outside Thailand.

Experts are pushing the new government to enact regulation to keep Thailand's data stored locally in a bid to attract more investment in the country.

Cloud service providers say post-election instability could impact investment in technology and inhibit companies' digital transformation.

Chang Foo, chief operating officer of Tencent Thailand, said the company chose to open its cloud-based service centre in Thailand as its first in Southeast Asia out of 25 global locations because Tencent has operated in Thailand for over a decade.

"We would like to be one of the top choices for organisations that are concerned about their data being stored outside Thailand," Mr Chang said. "Tencent offers in-country cloud services that meet the criteria of data sovereignty which is valued by the public sector and banks."

The company invested in infrastructure and uses True IDC's data centre. A source familiar with Tencent said the cloud data centre investment totalled several hundreds of millions of baht.

"We selected True as a partner for its core competency in managing data centres and its local expertise, as well as its parent firm, Charoen Pokphand (CP), which can be a customer for cloud AI service," Mr Chang said.

In China, Tencent offers cloud services for facial recognition that are used for public surveillance, immigration enforcement, crime reduction and access controls for office buildings.

The company foresees opportunities in smart retail using automation and AI, as well as a content delivery network for overseas transactions.

Supparat Sivapetchranat Singhara Na Ayutthaya, managing director of True IDC, said the collaboration with Tencent will enable True to offer global cloud services in Thailand, helping reduce network latency and lowering costs compared with other cloud services outside Thailand.

Total revenue from cloud services is expected to reach $341 million by 2022, up from $157 million in 2019 and $119 million last year.

Thailand is a developing market with forecast compound average growth of 31.5% from 2016 to 2022. By comparison, Malaysia, Indonesia, India and China are mature markets in Asia-Pacific, according to Frost & Sullivan.

"In the next 12 months, True IDC is expected to earn revenue of $5 million from Tencent cloud," Mr Supparat said.

The upcoming Data Protection Act does not regulate data sovereignty, but such regulation would cause more companies to invest in cloud data centres in Thailand, keeping the profits from data storage in Thailand.

Tanin Noirungsee, chief technology officer for cloud at Huawei Technologies Thailand, said AI is a new general purpose technology for business transformation that will change all industries.

Kenny Tan, general manager of Alibaba Cloud Malaysia, who oversees the Thai market, said Alibaba's cloud infrastructure helped support the Global Shopping Festival last November, processing more than a billion orders from 200 countries.


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