Nvidia crowns Vietnam as Indonesia’s tech investment rival

The dynamics of foreign direct investment (FDI) in Southeast Asia are shifting rapidly, with Vietnam and Indonesia emerging as key players and rivals in the global tech ecosystem.

The two countries have very different approaches: While Indonesia has leveraged the power of its large consumer market, Vietnam has become known as a manufacturing hub. It’s a position the nation’s leaders have long hoped to escape.

Nvidia CEO Jensen Huang (left) enjoys a beer with Vietnamese Prime Minister Phạm Minh Chính on Ta Hien Street in Hanoi last week. Photo credit: Vietnam government portal

However, Nvidia’s recent investment in Vietnam suggests that the country may be increasingly successful at courting high-tech investments. The AI giant signed a deal to set up AI R&D and data centers in the country, as well as buy VinBrain, a healthcare startup owned by local conglomerate Vingroup.

This represents a sea change for Vietnam when it comes to attracting tech FDI and perhaps a warning for Indonesia that its rival is becoming more serious in attracting high-quality tech investments.

Beer and investment

Nvidia CEO Jensen Huang’s most recent trip to Hanoi included a meeting with Vietnam’s Prime Minister Pham Minh Chinh in the lively setting of Ta Hien Beer Street, a symbol of the city’s bustling energy.

While the announcement of the R&D and data center deal was well-received, his earlier deal to establish a US$200 million AI factory in Vietnam – which he concluded last year – raised an interesting question.

See also: Charting big tech’s $70b spending spree in Southeast Asia

In April, Nvidia signed an agreement with Indonesia to build an AI center in the country.

Many have since asked: Why did Indonesia secure such a center while Vietnam received “only” the AI factory?

From an investment perspective, the value of the two projects is the same – US$200 million. In Indonesia, Nvidia partnered with the telecommunications giant Indosat Ooredoo Hutchison to develop the AI center. In Vietnam, Nvidia collaborated with FPT, a leading local technology company, for the AI factory.

Despite this relative parity, many in Vietnam viewed Indonesia’s win as a missed opportunity, especially given Vietnam’s extensive efforts to court Huang during his visit to bring R&D into the country.

Nvidia CEO Jensen Huang/Photo credit: Shutterstock

Open door vs. hurdles

Tale of two approaches