The report from Arizton Advisory & Intelligence highlights a strong growth outlook for the Asia-Pacific (APAC) data center industry, driven by AI, cloud computing, digital transformation, and government-backed infrastructure initiatives.

Market Growth

Metric	2025	2031 Forecast
Total Investment	USD 126.64 billion	USD 255.49 billion
CAGR (2025–2031)	—	12.41%
White-Floor Area	—	32.57 million sq ft
Power Capacity	—	8,343 MW

The market is expected to more than double in investment value by 2031.

Leading Markets

• China remains the dominant market, accounting for approximately 47.9% of APAC data center investment in 2025.
• India and Australia continue to attract significant capital.
• Japan represents about 10.1% of regional investment, supported by AI deployment and government technology programs.
• Emerging destinations include:
  • Malaysia
  • Thailand
  • Indonesia
  • Philippines
  • Taiwan
  • New Zealand

These markets are benefiting from land availability advantages compared with more constrained hubs such as Singapore, Tokyo, and Sydney.

Colocation Market Outlook

The APAC colocation sector is projected to reach:

• USD 64.08 billion by 2031
• 15.36% CAGR (2026–2031)

Key growth drivers include:

• Hyperscale cloud expansion
• Enterprise cloud adoption
• AI infrastructure demand
• Digital transformation initiatives

Southeast Asia is expected to contribute more than 21% of regional growth, making it one of the fastest-growing colocation regions globally.

AI Is Reshaping Infrastructure Requirements

AI and high-performance computing (HPC) workloads are changing how facilities are designed:

• Higher rack densities
• Increased power requirements
• Greater demand for resilient electrical systems
• Rapid adoption of liquid cooling technologies

Liquid Cooling Trend

Liquid cooling accounted for:

• 55.2% of cooling infrastructure investment in 2025
• Expected to rise to nearly 59.0% by 2031

This reflects growing demand for:

• Better thermal management
• Lower energy consumption
• Improved water efficiency
• Support for AI-focused deployments

Government Policy as a Growth Catalyst

Governments across APAC are increasingly supporting data center development through:

• AI infrastructure programs
• Digital sovereignty initiatives
• Investment incentives
• Long-term digital economy strategies

These policies are becoming nearly as important as traditional site-selection factors such as power availability, connectivity, and land access.

Strategic Implications

For investors and operators, the report suggests several themes:

1. AI will be the primary demand driver for new capacity.
2. Secondary markets are becoming increasingly attractive due to land and power constraints in major hubs.
3. Liquid cooling and high-density infrastructure will move from niche to mainstream.
4. India, Malaysia, Indonesia, and Australia appear particularly well-positioned for the next wave of expansion.
5. The APAC region is evolving from a collection of local markets into one of the world’s most important data center investment ecosystems.

For more details, the full research is available from Arizton Advisory & Intelligence.