Projesh Banerjea, Director of Infrastructure at KKR and a leading expert in Asian data centers, joins the discussion on the burgeoning demand for data centers driven by AI in Asia. He highlights how capacity is set to double in four years. The conversation dives into strategic growth opportunities, challenges in building efficient centers, and the impacts of cloud computing and geopolitical factors. Banerjea also addresses the intricate balance between investment needs and the technological evolution reshaping the industry.
Artificial intelligence is significantly driving data center demand in Asia, with predictions of capacity doubling in the next four years.
Investors must navigate the competitive landscape of data center development, focusing on partnerships with hyperscalers to align infrastructure with future AI-driven needs.
Deep dives
Rising Demand for Data Centers in Asia
There is significant and growing demand for data centers across Asia, driven by the increased migration of data to the cloud and the rising influence of AI. This trend has historically put Asia at a disadvantage compared to North America and Europe, but the gap is starting to close as more investment flows into the region. Experts anticipate that data center capacity in Asia could double within the next four years, highlighting the potential for substantial growth in this sector. The demand is further propelled by companies seeking to establish hyperscale data centers, which cater to major players like Amazon and Google, thereby creating opportunities for investors.
The Technicalities of Data Center Operations
Data centers are intricate facilities designed specifically to manage vast amounts of data and server infrastructure. They are structured to be energy-efficient, often consisting of numerous cold rooms that ensure optimal conditions for servers. Different types of data centers exist—such as carrier hotels and enterprise centers—but the hyperscale models are becoming increasingly important, especially given the demands of modern cloud computing. Location plays a crucial role in data center operations, with investments being strategically placed in areas with the necessary utility capacity and infrastructure to support high energy needs.
Investment Landscape and Future Considerations
The investment landscape for data centers is competitive and nuanced, with significant capital required for development and operation. Investors typically partner closely with hyperscalers to ensure that the infrastructure aligns with future demand for capacity, particularly as AI technology evolves. While historical underestimations of demand show a pattern of growth, there are risks associated with outdated data center facilities that may not keep pace with advancements in technology. Moving forward, the focus on building new, efficient data centers will drive value and address power consumption challenges faced by existing structures.
Artificial intelligence is fueling demand for data centers across Asia, with capacity set to double in the next four years, according to Moody’s. Projesh Banerjea, KKR director and Southeast Asia infrastructure lead, joins John Lee and Katia Dmitrieva on the Asia Centric podcast to discuss how investors can best tap into that growth – and how it can get complicated.