G42 Invests $2B in AI Data Center in Ho Chi Minh City
Milestones in Ho Chi Minh City’s Technological Growth
On October 15, the inaugural Congress of the Ho Chi Minh City Party Committee for the 2025-2030 term concluded its final session, emphasizing the role of innovation in the city’s economic growth. Lam Dinh Thang, Director of the local Department of Science and Technology, highlighted the importance of science, technology, and innovation (STI) as pivotal engines driving progress in the area.
Underlining its accomplishments, Ho Chi Minh City has set itself apart as a significant player in the technological landscape. The Total Factor Productivity (TFP) index, a key indicator of STI’s contribution to economic development, is projected to reach 59% by the end of 2025, with a sustained influence anticipated into the following years.
Contributions of the Digital Economy
In 2024, the digital economy accounted for 22% of the city’s Gross Regional Domestic Product (GRDP), with optimistic projections suggesting this figure will rise to 25% in 2025. Currently, Ho Chi Minh City ranks second nationwide in both the Digital Transformation Index and the National Innovation Index, reflecting a strong emphasis on the integration of technology into various sectors. Moreover, the city’s startup ecosystem has achieved a global ranking of 110, positioning it fifth in Southeast Asia and 30th worldwide in blockchain development.
These achievements are a result of tailored policies aimed at attracting talent and investment. Such initiatives include non-refundable financial incentives for innovation, competitive salary frameworks, and the establishment of internationally recognized research facilities.
Investment Landscape and Strategic Targets
The city has actively pursued streamlined administrative processes, cutting nearly 300 business-related procedures and saving an estimated 1,900 working days. As a direct outcome, the science and technology sector attracted $1.6 billion in foreign direct investment (FDI) in the first half of 2025 alone, constituting 40% of the city’s overall FDI.
Ho Chi Minh City is home to over 140 science and technology companies, securing its position as the second-most significant area for this sector in the country. Renowned global technology corporations, including major players like SAP and Qualcomm, have also established offices and R&D centers in the city.
As workforce development remains a priority, nearly 100 high-quality educational institutions enhance the local talent pool. Notably, more than 55% of Vietnam’s programming workforce is concentrated in Ho Chi Minh City, demonstrating the region’s appeal as a tech hub.
Since the beginning of 2025, the city has trained over 40,000 government officials and numerous students in artificial intelligence (AI), fortifying its commitment to advanced technology training.
Challenges Facing the Science and Technology Sector
Despite these substantial advancements, Director Thang acknowledged the challenges that persist within the science and technology sector. Current management frameworks tend to be rigid and out of sync with market dynamics. Moreover, there is a shortage of experimental spaces for testing new technologies, coupled with inadequate data infrastructure for holistic digital transformation.
The city seeks support from central ministries and national agencies to address these gaps. The “triple helix” collaboration model involving government, academia, and enterprises remains underdeveloped, and there continues to be a lack of significant social investment in research and development.
Key Strategic Breakthroughs for Future Growth
Looking ahead, the city has set ambitious goals for the next five years. First, it aims for TFP’s contribution to exceed 60% and hopes to ensure that the digital economy comprises 30-40% of its GRDP. Secondly, Ho Chi Minh City targets transformation into a world-class innovation hub by 2030. The third goal involves elevating its startup ecosystem into the top 100 most dynamic cities globally, along with establishing at least five internationally accredited research centers in strategic technology industries.
To achieve these targets, Ho Chi Minh City will implement three strategic breakthroughs. The first focuses on enhancing policies and attracting investments, with particular emphasis on securing strategic investors in science and technology. Notably, the UAE-based G42 Group intends to invest nearly $2 billion in an AI mega data center in the city, marking a significant step in tech investment in Vietnam.
The second breakthrough centers around prioritized areas of strength, including AI, semiconductors, robotics, blockchain, and biomedical technologies. The establishment of a new startup fund controlled by city authorities is also planned to attract venture capital.
The third breakthrough emphasizes digital governance and human resource development. Accelerating the development of digital infrastructure is a pivotal aspect of this strategy, aiming to facilitate a data-driven urban management model. The city has also announced plans to form a cooperative framework among educational institutions, businesses, state bodies, and financial organizations to bolster technology diplomacy and attract international experts.
Conclusion: A Glimpse into Ho Chi Minh City’s Future
With these strategies and investments, Ho Chi Minh City is positioning itself as a key player in the global technology landscape. As it endeavors to integrate digital solutions and innovative practices into various sectors, the city sets the stage for sustained economic growth and technological advancement.
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