Executive Summary
The infrastructure services market in APAC continues to progress in a dynamic environment that is moving towards an inflection point driven by AI. Macroeconomic headwinds have started to subside, enterprise decision-making has started to open up and both mature and emerging markets are positioned to take another step as the next wave of growth begins to take off.
The Chinese clouds have slowed growth across the Internet infrastructure sector in APAC over the last several years, but things finally look to be changing. The recent quarter saw early indications that the efforts of Chinese clouds to move past raw infrastructure and into the value-add layer is paying off and AI tools and services have been the driver. The improved underlying conditions are expected to kickstart expansion, which will translate directly into data centre colocation consumption.
Adding more upside potential is the rapid rise of GPU cloud providers. Many are coming from China, but there are also regional players popping up and they are all looking to procure high-density data centre infrastructure. And simultaneously driving demand is the appetite for AI-oriented data centre infrastructure coming from the US hyperscalers. AI has not quite taken off in the region, but the groundwork is being set and it is going to happen sooner than may have been expected.
Overall, there are many reasons to be optimistic about the sector’s outlook in the APAC region. There is upside potential in many geographies and mature markets are looking to build fast and early for AI. CapEx numbers are rising across the board and there is no question that APAC is going to get its fair share.
This report takes a closer look at the most noteworthy themes and developments that took place in the infrastructure services market in 2Q24. It is a regional supplement to Structure Research’s other quarterly update reports.
