In Vietnam the land of the rising dragon, the Unicorns are gone. AI, semicon & Cloud: Game Over! Why the Gafam + Nvidia have decided quickly not to invest in Vietnam?
Vietnam AI & Semicon 2024: The Gafam + Nvidia visited as investors and quickly left as tourists last quarter.
As a former tech software entrepreneur, in early 2024, I was full of hope that 2026-2030 would be the years when Vietnam escaped the low-income trap as coined by the UNDP.
In September 2024, the Joe Biden administration made an unexpectedly quick visit to establish Vietnam as a China+1 strategic partner for technology – AI and semiconductors.
It was a strong signal to Xi Jinping, the Chinese president, that the war on technology made in the USA is not a joke and will be pursued elsewhere from now on.
Immediately after the Lunar New Year, the trillionaires of Silicon Valley, including the owners of GAFAM and Nvidia, came to Vietnam as investors. However, upon returning home, they decided to pass on Vietnam. Below is a recap of their billions of US$ investment allocations in AI, cloud services, and semiconductor production.
Earlier this year, Google, Apple, Facebook, Amazon, Microsoft, and Nvidia came to Vietnam but left after a quick assessment of their investment criteria not being met:
- a ‘Silicon Valley spirit’ and lifestyle
- Freedom for people to travel and access services
- Data and IP rights protection
- Visionary leadership in Vietnam committed to investing in 21st-century infrastructure and brain-machine learning
The Vietnamese leaders they met and shook hands with did not meet their expectations; some hosts even disappeared from the government altogether a few weeks after their visits
GAFAM Nvidia Asean tour Q2-2024
Apple | Amazon | Microsoft | Nvidia | ||
Malaysia | Indonesia | Singapore | Singapore | Indonesia +Malaysia | Indonesia |
SPEED IN DECISION: We process data professionally, and Vietnam is not conducive to AI and tech unicorns
5-Apr-2024: Nvidia/Indosat plan $200 million investment in Indonesia AI center.
17-apr-2024 Apple CEO Tim Cook says ‘we’re investing’ in Indonesia
18-Apr-2024 Apple to invest more than $250 mln to expand Singapore campus
30-Apr-2024: Microsoft to Invest $1.7 Billion in Indonesia for AI, Cloud
2-may-2024 Microsoft announces US$2.2 billion Malaysia investment to fuel the cloud and AI transformation
7-may-2024 Amazon to invest $9bn in Singapore to boost cloud computing
14-May-2024 Meta/Facebook/Whatsapp invest US$1Bn in Singapore data center
30-may-2024 Google pledges $2 billion investment in Malaysia as Big Tech splurges on Southeast Asia spending
4-jun-2024 Google completes expansion of US$5Bn in Singapore data center and cloud region
4-jun-2024 Nvidia CEO to increase investment by US$790mio in Taiwan, build 2nd supercomputer in Taiwan
Finding a ‘Silicon Valley spirit’ and lifestyle in Vietnam: We are not digital nomads looking for an everything-cheap environment.
Digital Nomads love Vietnam, but high-flyers with top jobs in demand worldwide like AI, financiers, or researchers would give Vietnam a 5.8/10 rating, based on an InterNations survey.
There are 5 main categories to rank a country for lifestyle living when it comes to high-profile expats with skills in demand worldwide: surgeons, researchers, artists, sportsmen, tech gurus, etc…
Waiting for a Vietnam Visa-free for people and services, plus top tech infrastructure services
Freedom of thought and information is fundamental to researchers’ work. Naturally, this includes ease of travel and exchange. When you’re accustomed to receiving red-carpet greetings due to your valuable contributions to science and the tech economy, visas and lengthy work permits seem medieval to tech gurus.
This summer, Vietnam suffered from tap water shortages and electricity cuts for a few hours each day. The sensitivity and precision of semiconductor technologies cannot afford such failures in basic public services. Doubling their investment to secure factory production is not an option when countries like Vietnam face challenges such as the HCMC subway, which started back in 2008 and may reach the 20-year mark for completion, or incidents like the 15th of June when 3 out of 5 submarine network cables were damaged, significantly disrupting internet connectivity for users across Vietnam
Data, IP Rights, and Wealth Protection: Essential Criteria for Investing in Vietnam
Vietnam’s recent inclusion of leaders above 60 from the Ministry of Interior Police and the Military into the Politburo to oversee national affairs contrasts sharply with the mindset of data scientists. Stringent controls and policing of data and ongoing research are diametrically opposed to the DNA of the hi-tech business world.
In AI, the gathering and manipulation of data are crucial. The only acceptable controls should revolve around protecting privacy and confidentiality, akin to the EU GDPR regulations. Politically motivated rulings, algorithms, and biases have no place in managing medical or personal data, which the AI industry heavily relies upon.
IP rights laws and their enforcement are integral to the tech business landscape, ensuring the protection of startup founders and researchers. Unfortunately, Vietnam lacks a proven track record in this crucial area.
Furthermore, for tech unicorns, access to IPOs and capital markets is paramount. This includes having a tradeable currency, streamlined IPO and stock purchase processes, a transparent stock market, and well-regulated capital markets. However, recent CEO visits coincided with the severe financial issues at Van Thinh Phat Real Estate and SCB Banking, highlighting deficiencies in capital market supervision. This situation ultimately led to a US$25 billion bailout by the State Bank of Vietnam. Initially estimated at US$12.5 billion in embezzlement as of April 2024, this figure doubled during subsequent court proceedings in May
In conclusion, AI & technology visionaries visited Vietnam but did not find visionary leadership.
While neighboring countries like Malaysia focus on ICT (InfoComm Tech), Singapore pursues AI ambitions, and Indonesia commits to digital economy infrastructure and education for the 21st century.
CEOs of GAFAM and Nvidia visiting Vietnam encountered mere lip service and regressive leadership practices. Consequently, they swiftly redirected their substantial investments from China to ASEAN neighbors in a decisive move in Q2 2024.
We await the offerings of the new 2026-2030 politburo. For now, Silicon Valley investments have flowed to neighboring countries committed to advancing tech with government support aligned in a unified direction
Related readings: Foreign business chambers of commerce led the charge to get The ease in work permit and e-Visa issuance
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