Maybank Investment Bank has remained positive on ASEAN data center (DC) build cycle and see opportunities in the ASEAN DC supply chain.

The research house said in a note on Friday that analyzing global cloud provider capital expenditure (capex) commitments and management commentary suggests little risk of artificial intelligence (AI)/cloud growth and/or their capex levels slowing, mitigating slowdown concerns.

According to Maybank, since the start of the year, advanced chip export restriction by United States, tariff and macro concerns raised questions on the sustainability of the strong DC build cycle in ASEAN.

However, it opined that potential country-by-country deals with the US on advanced chip supply remains a possibility, which could help to address supply side issues.

It is noted that the US is considering easing restrictions on Nvidia’s advanced AI chip sales to the United Arab Emirates (UAE), with President Trump potentially announcing the start of work on a bilateral chip deal during his upcoming trip to the Gulf.

The potential easing of US export restrictions to UAE could set a precedent for similar bilateral deals and subsequent relaxation for ASEAN countries, according to Maybank.

Currently, nations like Singapore, Malaysia, and Thailand are categorized under Tier 2 in the US’s AI diffusion framework or chip export control (similar to UAE), subjecting them to restrictive licensing requirements.

“While we see the allowed quota under the AI diffusion framework (effective May 15) as sufficient to meet the already announced data center investments in ASEAN, a shift toward more flexible country-specific arrangements could pave the way for future investment by regional players and hyperscalers,

“We believe ASEAN DC infrastructure remains under-penetrated and can punch above its weight,” said the research house.

Meanwhile, March quarter results for major cloud providers and content companies such as Meta, Google and Microsoft showed cloud/AI revenues in-line or exceeding street expectations, except for AWS, which missed by 5 percent.

“Despite macro and tariff uncertainty, all companies maintained elevated AI/DC capex guidance while Meta increased data center capex guidance from $60 billion to $65 billion to $64 billion to $72 billion and Oracle guided for capex to double from FY24 to FY25,

“As such, cloud service providers (CSPs) have no intention of cutting back on data center capex throughout FY25 as cloud revenues for these companies remained strong or even outperformed expectations,” said the research house.

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