Against the backdrop of the technology boom in East Asia, American artificial intelligence giant NVIDIA has recently set its sights on Vietnam. This strategic move not only reflects NVIDIA's recognition of the Vietnamese government's proactive development policies but also highlights the country's immense potential in the economic and technological sectors.
On December 5, NVIDIA signed a memorandum of understanding with Vietnam's Ministry of Planning and Investment to establish two cutting-edge AI centers in Vietnam: the Vietnam Research and Development Center (VRDC), which will be the third largest AI research center globally, and an AI data center. This collaboration will enhance technological innovation and strengthen Vietnam's tech infrastructure and talent pool.
This is not NVIDIA's first collaboration with local companies. Recently, the company acquired VinBrain, a subsidiary of Vingroup focused on AI medical solutions. VinBrain's founder, Steven Truong, previously worked at Microsoft, and their AI-driven diagnostic tool DrAid has been widely adopted in major hospitals in Vietnam and internationally, gaining attention for its participation in NVIDIA's Inception program. Additionally, NVIDIA has formed a strategic alliance with IT giant FPT Corporation to create a $200 million "one-stop AI factory" in Hanoi, which will include educational programs for 30,000 university and college students aspiring to work in AI. The first FPT AI factory is expected to break ground in November 2024, with profitability anticipated in 2025.
Meanwhile, NVIDIA has established a partnership with GreenNode, an AI GPU provider under VNG Corporation. Since April, GreenNode has been offering AI and software services integrated with NVIDIA technology, and its data center in the Tan Thuan Export Processing Zone is one of the first facilities equipped with NVIDIA graphics processing units. These initiatives mark significant strides for Vietnam in technology transformation and future talent development, gradually making it a hotbed for high-tech foreign investment.
Vietnam is rapidly emerging as a key player in the AI sector of Southeast Asia. According to Statista, the country's AI market is projected to reach $753.4 million by 2024, with an annual growth rate of 28.36% from 2024 to 2030. This growth rate is comparable to Southeast Asia's 28.53%, showcasing Vietnam's ability to keep pace with global technological changes.
NVIDIA's investment in Southeast Asia is undoubtedly an important catalyst for advancing Vietnam's technological development. Vietnam is gradually moving from low-end manufacturing towards a global innovation network, which not only enhances its position in the global supply chain but also creates unique competitive advantages for companies operating in Vietnam. As the United States intensifies restrictions on Chinese tech companies, the Southeast Asian market is expected to attract substantial foreign investment, particularly in the tech sector, intensifying competition among countries like Vietnam, Malaysia, Singapore, and Indonesia in technology manufacturing, data centers, and emerging AI hubs.
According to research from the UK’s Oxford Analytica, Vietnam's ranking in AI readiness has significantly improved, now standing at 39th out of 139 countries, rising 19 places from last year. In Southeast Asia, Vietnam excels in the AI field, boasting over 5,000 engineers, 7,000 AI specialists, and approximately 500 related startups.
The potential for Vietnam's technological growth stems from several factors. Firstly, a young and vibrant workforce is key, with a domestic illiteracy rate of only 3.4%, and students actively choosing to study STEM (science, technology, engineering, and mathematics) courses. In June 2023, the average monthly salary in Vietnam was $331, significantly lower than China's 4.2 times and the United States' 14.5 times. At the same time, Vietnam's labor productivity has doubled over the past decade, increasing from $4.8 per hour in 2014 to $10.3 per hour in 2023.
Secondly, the rise of local startups and tech unicorns is also fueling technological development. The country ranks third in Southeast Asia for investment deals and total investment volume, with over 3,000 innovative startups, three of which are valued at over $1 billion, and 11 at over $100 million. In recent years, many domestic tech unicorns and startups have excelled in the AI sector.