"For future M&A transactions in Southeast Asia, global or regional acquirers worried about management risk, regulatory complexity, or market volatility will structure deal mechanisms to align long-term incentives. Whether through staged buyouts like Grab's 60% upfront acquisition of Atome or all-equity transactions like Circle's acquisition of Tazapay, structuring payouts around future performance aligns management teams and mitigates tail risk while scaling into new geographies." - Jeremy Au
"Southeast Asia's tech story has largely been defined by the super app strategy: start with high-friction pain points like transportation, expand into daily verticals like food and groceries, offer a better payment solution, and ultimately dominate consumer financial services. With basic infrastructure now built, the remaining underserved demand lies in credit and lending, which makes large-scale fintech acquisitions like Grab's purchase of Atome so strategic." - Wing Vasiksiri
"We are finally seeing large-scale tech M&A transactions emerge from Southeast Asia, from Grab acquiring Atome Financial for $1.5 billion to Circle acquiring Tazapay for $400 million. These deals demonstrate that financial services platforms built across Singapore, Indonesia, Malaysia, Thailand, and the Philippines have achieved the scale, cross-border regulatory licensing, and transaction volume needed to become high-value targets for global acquirers and public tech giants." - Wing Vasiksiri
Wing Vasiksiri, investor and ecosystem builder, returns to unpack two of the largest Southeast Asian tech M&A deals in years, both announced within a week of each other: Grab acquiring 60% of Atome Financial from Advance Intelligence Group for $1.5B with a two-year earnout on the remaining 40%, and Circle's roughly $400M all-stock acquisition of Singapore-founded Tazapay. Wing and Jeremy Au dig into why the deal structures matter more than the headline numbers (earnouts and equity are how global and regional acquirers are pricing in the tail risk of Southeast Asian management teams), and why Grab is deploying cash that US retail investors aren't fully valuing into new growth stories rather than dividends. They also cover Singapore's $200M+ countercyclical fintech fund push, the e-commerce growth still coming out of Vietnam, Indonesia, and Malaysia, why Thailand and Malaysia are winning the data center boom while Singapore has structurally sat it out, and how OpenAI and the neolabs are landing in the region.
00:00 SEA tech M&A takes off: Grab announces a $1.5B deal for Atome Financial while Circle acquires B2B payments firm Tazapay for $400M.
03:14 Grab and Atome synergies: Combining offline BNPL retail networks with food delivery to build an orthogonal vector against Sea Group.
04:38 Unique deal structures in regional tech: How staged buyouts and performance-linked mechanisms de-risk acquirers and align management teams.
06:36 Underwriting as a competitive moat: Grab taps into Atome's multi-country credit track record, institutional debt lines, and portfolio scale.
11:08 Strategic cash deployment: Grab utilizes balance sheet cash for high-growth strategic acquisitions rather than traditional public market buybacks.
12:51 Circle acquires Tazapay: Cross-border regulatory licenses and global payment infrastructure unlock a 6x payout for early VC backers.
18:02 Singapore's $200M+ fintech initiative: Public funding steps in during a VC deployment winter to support proven regional exit pathways.
19:50 E-commerce surge across SEA: Double-digit growth in app installs in Vietnam, Indonesia, and Malaysia creates secondary startup opportunities.
26:02 Frontier AI labs expand to APAC: OpenAI and neolabs establish Singapore headquarters and launch accelerator programs in Thailand.
27:18 The Thailand and Malaysia data center boom: Abundant power, cheap land, and a "bring-your-own-chip" model drive Chinese hyperscaler investments.
Keywords: Southeast Asia Tech, M&A, Grab, Atome, Circle, Tazapay, Fintech Acquisitions, Singapore Fintech, Thailand Data Centers, BNPL, Cross-Border Payments, Super App Strategy, Venture Capital Southeast Asia
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Introduction
Jeremy Au: Hey, Wing. Good to see you.
Jeremy Au: How is life for you?
Wing Vasiksiri: Same. Yeah, moved to Singapore for almost a year now, so feel pretty settled in to everything happening here, and excited to hop back on again.
Wing Vasiksiri: I think this is the second time we're talking since I moved out here, so excited to hop back on and catch up.
Jeremy Au: Yeah, last one was in person, so now we're doing one remotely because you are traveling for work, but it's good to see you. So I think one thing we wanna talk about is what's the latest news, and I thought it was quite exciting recently that we saw a couple of M&A transactions happen.
Two Fintech Exits in One Week
Jeremy Au: I thought we saw that Grab just bought 60% of Atome, which is a buy now, pay later group under the Advance Intelligence Group. And I think you were the one who mentioned to me and brought to my attention that Circle Internet Group, the USDC stablecoin, recently acquired Tazapay, which is a B2B transaction, payments company, which was about a $400 million deal as well, so quite an interesting time right now.
Wing Vasiksiri: Yeah, I think super exciting. I think with the Atome news that literally broke last night, right? So Grab announced that they're buying 60% of Atome Financial for 1.5 billion. So that's pretty, pretty sizable, like very sizable acquisition for the region, and I think the deal was that the remaining 40% will be bought in the next two years after the first tranche closes.
Wing Vasiksiri: But super exciting. I think this, along with the Circle and Tazapay news last week, a lot of the questions that investors have been asking around liquidity, exits — we're finally seeing these large-scale M&As happen out of the region. I don't know if it's a coincidence that they're announced a week pretty much after each other, but really hope that this is the start of more good news to come and more liquidity exits that we're seeing in Singapore, across Southeast Asia.
Wing Vasiksiri: I think the interesting thing here is that both these companies have similar characteristics, right? Fintech companies and also primarily serving Southeast Asia. So it does seem like we're getting to that point where companies building in the financial services have a large enough market, served enough customers such that they've become interesting exit and acquisition targets for some of the larger companies, and yeah, hopefully this just continues to snowball.
Grab and Atome Synergies Against Sea Group
Jeremy Au: Awesome. And I think I wanna talk about it as well, like what the paper synergies are, right, in terms of how and why the deal makes sense as well. I think that from Grab's perspective, it makes sense. They have a huge, obviously, consumer base, right? Everybody's taking rides. They also have the drivers, and they have a lot of small businesses that they have. Whereas Atome, they obviously have buy now, pay later, which is a form of lending, and I think they have a lot of merchants as well. So I think on paper there's a lot of cross-selling synergy. What I found quite interesting was that, beyond doubling the size of the loan book based on the LinkedIn post that they had, I thought it was interesting that they were buying 60% of the company, which I thought was a bit interesting because normally you see them buy 100% of the company, right?
Jeremy Au: That's the classic technology M&A. So choosing to buy 60% upfront and having and tying the remaining 40% to be some kind of performance-oriented framework, I think it's quite an interesting mechanism because you don't see that in Silicon Valley. I can't think of many transactions where they've done that.
Jeremy Au: I think it's because in my head it prevents you from overpaying, right? You're buying 60% now, then you see if Atome shrinks — then it's a natural lever on the transaction price for the remaining 40%. But if Atome grows more, then you pay more, right?
Jeremy Au: So it works out for both sides. I thought it was an interesting transaction structure, actually.
Wing Vasiksiri: Yeah, you're right. We don't see this very often actually, and maybe it goes to show that acquirers still have market leverage, right? You probably wouldn't see something like this if there were more, many acquirers competing to buy up the same asset.
The Super App Strategy and Underserved Verticals
Wing Vasiksiri: But yeah, I think the question you asked in terms of where the synergies are is a great one as well and something we should talk about a little bit, right? I think if we zoom out, Southeast Asia for the most part has been… the tech story here has been about the super app strategy, right?
Wing Vasiksiri: In emerging markets, users typically only care about two things, which is price and convenience. And so a super app strategy helps offer more services in one place, resulting in a better customer experience. And I think you can generalize the Grab/Gojek approach as something like this where, number one, you start with a very high pain point, right?
Wing Vasiksiri: Which is transportation in some of the most congested cities in the world. You expand to other vertical pain points, groceries, pharmacy, food. You offer a better way to pay, 10x way to pay, GrabPay, GoPay, and then you finally expand and dominate across all of consumer financial transactions, right? And I think this is where we see the lending, the BNPL approach come into play.
Wing Vasiksiri: And I think the super app strategy works because when these apps started, there was a lack of basic infrastructure that allowed for a lot of verticalized solutions to develop, right? I think there was a time, and probably still, where things like payments, fraud prevention — Grab and Gojek probably had the best in-class technology for a lot of this, right?
Wing Vasiksiri: So they built that infrastructure and then scaled horizontally. And now if you zoom out and look, it's like where is there growth and demand that is still underserved? I think it's basic industries like healthcare, education, logistics, and credit specifically, which makes this acquisition of Atome super interesting.
Underwriting as the Real Moat
Jeremy Au: I think what's core, if you think about it, is not just the reach as well, but also it's Atome's underwriting. That's not an easy skill set to have in Southeast Asia. I've looked at many financial tech companies in Southeast Asia, and I think the number of teams that just say that underwriting is important and then not deliver on good underwriting because of maybe it's the market, maybe it's how they choose to underwrite it, maybe it's even the structure of how and what they're lending, and the resulting implosions that have happened over the past five years has really been quite an interesting learning experience. And I think that's what Grab is buying Atome for — is having that capability.
Jeremy Au: But also, I think to some extent maybe even the debt lines from the banks that trust Atome to do the underwriting to this date as well. It's not just about underwriting, right, but it's also the track record of underwriting that lets you have a big loan book.
Wing Vasiksiri: Yeah, they're definitely operating at scale, right? Exactly what you said. I'm pulling up some of the numbers here. 2025 annualized net revenue over $500 million on $6 billion annualized GMV portfolio across Singapore, Malaysia, Philippines, Indonesia, Thailand. 25 million cumulative transacted users.
Wing Vasiksiri: So they're at scale, and honestly, it seems like a great fit for Grab and what they're trying to do with their expansion, right? I think Grab obviously had some challenges in the public markets, and I think an acquisition like this is very synergistic to them, perfect for their scale.
Atome's Unusual Fundraising Path
Wing Vasiksiri: I think maybe the other interesting thing to talk about a little bit is that Atome wasn't the typical startup that you see in the region, right? It's not like the typical seed, Series A, Series B story. They were actually a business line that got spun up inside a larger group. So it wasn't a standalone company, right?
Wing Vasiksiri: I think the founder, Jeff Chen, founded this group Advance Intelligence Group in 2016. And then he started a bunch of different solutions within that group, Atome being one of them. And if you look at their fundraising history, they didn't have to raise the typical seed Series A, Series B.
Wing Vasiksiri: I see here they raised a large Series C in 2019 and then a large $400 million Series D from SoftBank, Warburg Pincus, Vision Plus Capital, EDBI is in there, Northstar. So it does look more like the PE-backed type of growth company as opposed to the high-growth tech startup raising capital from the typical VCs that you and I maybe hear and talk about.
Wing Vasiksiri: Still super interesting, but yeah, it is very interesting to see a different shape of business get to this scale and do really well.
Jeremy Au: Yeah, it must have been one heck of a negotiation between these two conglomerates that both had the ability to keep growing across. Grab already had its own fintech solution as well as a digital bank partnership with GXS.
Jeremy Au: Whereas, like you said, Advance Intelligence Group has its own conglomerate as well. So it must have been an interesting negotiation there. I think some other parts about the transaction that I wanna think about is a good outcome for the shareholders. And I would say yes, because from my recollection was that Advance Intelligence Group was valued about 2 billion, right? I think in 2021. So if you're selling basically 60% of one business unit for effectively $2 billion as well, then you're having that decision point actually — what is the remaining 40% gonna look like, right? Is it gonna be another $2 billion?
Jeremy Au: Is it going to go all the way up to $4 billion if they perform well? So those are all opportunities to grow the business. And I'm sure that Advance Intelligence Group is making some decision there to say, "Hey, this is the best price rather than going alone with Atome."
Jeremy Au: That's an interesting choice for Advance Intelligence Group, and I'm also wondering how it flows. Does it flow into reinvesting into more parts of the business of Advance Intelligence Group, or would it be used to pay back early shareholders in their own business? So that's actually quite an interesting experience.
Grab as an Active Acquirer
Wing Vasiksiri: Yeah, for sure. They made the decision, right? They got the liquidity, and it's very meaningful for the parent company as well, right? It's a massive acquisition. So it seems like it's a huge win, I'm sure, for early shareholders, management, employees. I think the other sub-story here is Grab has been on a roll recently with these acquisitions, right?
Wing Vasiksiri: I think this is their third acquisition this year. They bought Stash earlier for $425 million. And then Foodpanda Taiwan at 600 million. So Grab seems to really be investing and trying to grow, probably get to profitability, and maybe it's like the competition that they're seeing from GoTo and GoPay in Indonesia that's fueling some of this.
Wing Vasiksiri: But yeah, either way, I think it's a great time to be a founder in the region, be an investor in the region, and see some of these super exciting developments.
Jeremy Au: Yeah, I think it's interesting for Grab because some of the things that we talked about in our past conversation was that Southeast Asia needed more of an M&A exit approach, right, for startups that don't need to go all the way to IPO.
Jeremy Au: But now Grab is acting as an active acquirer. I think if you look at Grab from a US retail investor perspective where they're publicly listed, it was quite interesting to see that. They're still, I think from my perspective, a little bit underweighted, because from a US retail investor perspective, they don't really use Grab or feel Grab.
Jeremy Au: And so if you look at what Grab is from a public company, they have… spitting out quite a bunch of cash. And I think these transactions are quite smart because basically you're taking the cash that you have that's not being fully valued by retail investors and using that to do acquisitions for new business lines that are a new growth story for retail investors.
Jeremy Au: I think it's probably the best use of the cash. Versus, I'm just giving you an example, would be oil and gas giving dividends back to shareholders to get the stock price up would be another approach, right, if you had all that cash. So I thought it was just a really interesting approach as well.
Circle Acquires Tazapay for $400M
Jeremy Au: Another one that was interesting as well was the Tazapay from my perspective. I thought that was a much cleaner M&A story as well. They were founded in 2020. I think they raised about $60 million across seed and their Series A so far from Peak XV and Saison Capital, and PayPal, and then they got acquired for $400 million.
Jeremy Au: So yeah, that's about a 6X markup, which is a good outcome. And I think I would say it's a great outcome if you think about it because in six years, you got a 6X markup, and a transaction closed. Yeah, it was pretty good.
Wing Vasiksiri: Yeah, no, 100%. I think that was the exciting news last week, and it's great that we have a succession of exciting exits and acquisitions here.
Wing Vasiksiri: But yeah, they're a relatively young company. I remember seeing their seed round during COVID times where I think Peak XV led it, right? I think the founder, Rahul, was a known founder, right? He was at PayPal for 10 years. Led Stripe's revenue growth in APAC, so really deep payments background.
Wing Vasiksiri: Obviously identified a problem, knew how to execute in order to solve that problem, and did that really, really well. I think the interesting thing here is that they started in Singapore, right? I believe that they started serving local regional markets, but they grew pretty large.
Wing Vasiksiri: I read that they had payout rails in over 100 markets. They were licensed by the MAS, but also FINTRAC in Canada, AUSTRAC in Australia, FinCEN in the United States. So it really was a global business that was built out of this region, and Circle was actually the one who led their Series B, I wanna say.
Wing Vasiksiri: And then ended up coming in and buying the company. I'm sure it's a great exit for founders and early investors. They raised 60 million, so we don't know what the valuation in the later rounds is, but this is very meaningful. We don't see acquisitions of this size out of this region within this time span very often, and so I think it's great for everyone involved.
Wing Vasiksiri: It's clearly beneficial to Circle and their plans, right? I'm sure Circle, it's a public listed company in the US, maybe feeling a bit of pressure from Stripe and what they're doing with the open USC with Visa, MasterCard, a bunch of other payment companies. But USDC is still, I believe, only second to USDT.
Wing Vasiksiri: Buying Tazapay, they get a plug directly into the financial plumbing and rails that the team has built. And so, yeah, congrats to everyone involved here. I think this is awesome.
Aligning Incentives With All-Stock and Earnouts
Jeremy Au: Yeah, I think there's a lot of actually interesting synergies, and this is something I'm less familiar with. Between Wing and myself, I think Wing is much more competent with Bitcoin and crypto than I am. I'm much more on the real-world businesses perspective. But I think one interesting thing is that, like I said, for Circle, it makes sense — this is a geographic expansion, right?
Jeremy Au: It's covering a lot of countries they don't already cover. It's a good, interesting story. I think what's interesting to me as well is that it was, I believe, an all-stock deal as well. So to some extent, that's also a bit different of a flavor, I would say, in Southeast Asia versus in the US.
Jeremy Au: In the US, you have acquisitions in cash, right? Maybe half cash, half equity, or a good chunk in cash as well. So I think this is another unique Southeast Asia flavor where it was an all-stock deal. I think what's in common, and is underappreciated I would say between this Tazapay acquisition and the Atome acquisition, is that I get a sense that their transactions were structured for performance of the management team.
Jeremy Au: So when you have an all-equity transaction in Circle, you're still incentivized to keep growing the business. You don't want the Circle stock to go down, et cetera. Obviously, how much impact you're gonna have in Circle as Tazapay is another question altogether.
Jeremy Au: But equity is a way to align incentives for long-term growth, and vice versa for the Atome acquisition by Grab as well. That's also — the fact that you buy 60% and saying we'll buy 40% in the next few years based on how the performance goes is also a performance alignment push, right?
Jeremy Au: So I think my key takeaway is that for future M&A transactions, the shape of those transactions is that a global or regional acquirer that's worried about the inherent risk of the management teams and maybe even the regulatory risk or market risk of a Southeast Asian company will structure their mechanisms accordingly to align those incentives and de-risk the tail risk, right? Or cliff risk of the management team thus peacing out and not really helping them push the new geography.
Wing Vasiksiri: Yeah. Yeah, for sure. I think what that shows is that both these acquirers think highly of the existing management team. They want them to continue working, growing out.
Wing Vasiksiri: And it's not uncommon in the US where it's like four-year vesting golden handcuffs that you serve out. I think it's both great acquisitions for both these companies, so it's, yeah, super exciting to see.
Singapore's $200M+ Fintech Push
Jeremy Au: Yeah. I think, zooming out a bit, this goes back to Singapore continuing to be a financial tech hub. I think it's interesting as well that, while we continue to have a VC winter in terms of deployments, the Singapore government is actually putting together like a $200 million plus funding into early-stage tech and fintech funds through its various ministries and organizations.
Jeremy Au: So I think it's interesting to see Singapore step in to inject liquidity into the early-stage fintech sector, which I think is a good choice because there's demonstrated exits now. There's demonstrated interest and also a great ecosystem with Singapore being a fintech hub, so there's a lot of synergy with the finance hub strategy for Singapore.
Wing Vasiksiri: So I think it's quite a good move by Singapore to push this while there's a VC fund winter.
Wing Vasiksiri: Yeah, I think the government has been pretty good about thinking through what areas of investment is strategic and is prioritized for the country. Obviously, fintech being one of them, and it's really doubling down on all this time Singapore spent really cementing itself as one of the go-to fintech hubs globally, right?
Wing Vasiksiri: You have the MAS licensing, you have the Fintech Sandbox that allows people to experiment. You have proximity to all these other large markets. And so when a fintech's building out of Singapore, very quickly they're usually expanding to Vietnam, Indonesia, Thailand, Malaysia. That requires building out all of these connectivity, bank integrations from scratch in every country you go to.
Wing Vasiksiri: So you actually end up building a lot of the skills and a lot of the infrastructure that's required to do that. I've seen a lot of initiatives around advanced manufacturing, robotics, so I really think that it's an interesting time to be investing out here.
E-Commerce Growth and the Next Consumer Wave
Wing Vasiksiri: The other stat I saw that was quite interesting was around e-commerce growth in Southeast Asia. There's an analytics company called Adjust that released a new report on e-commerce app usage and downloads, and Vietnam, Indonesia, and Malaysia were the top three. So really, really interesting — we think that we're at scale with a lot of these basic services like e-commerce, but you see that there's still a lot of growth.
Wing Vasiksiri: Like Vietnam installs up 42%, sessions up 21%. Indonesia, 36% and 62%. Malaysia, 14%, 38%. And this is all from John Russell's Asia Tech Review newsletter, so shout out to him. But yeah, I think there's a lot of more downstream implications of this, right? The thing I think about is how early-stage startups necessarily can act on this because the obvious benefactor of this growth are the large conglomerates, the Lazada, Shopee, Sea Limiteds of the world, right?
Wing Vasiksiri: These are the guys who are clearly in pole position across the region. But I think having consumers download these apps, shop online, spend more time online, there are probably some second-order consequences for other new consumer breakouts to happen. We haven't seen that in a while, right? We haven't seen a lot of great new consumer companies been built out of this region for a long time.
Wing Vasiksiri: We've seen a lot of B2B enterprise focus, but it'll be cool to see if this tailwind ends up creating a lot of consumer businesses out here as well.
Attacking Incumbents Head-On Rarely Works
Jeremy Au: I think that's actually a good reminder about a couple of things in my head. But I think the first one is that Grab plus Atome is a competitor with Shopee and the Sea Group, right?
Jeremy Au: Because Atome was working a lot with their offline retail, right? For the buy now, pay later shops, and then Grab historically was more obviously on food and delivery. And so when you combine food and delivery plus the retail, obviously all the Grab riders are picking up food from retail shops.
Jeremy Au: So it's actually quite an interesting orthogonal vector against Sea Group, which is primarily all online, right? Of a lot of e-commerce. So I think I'll be interested to see what Sea Group's countermove will be, right? Because Sea Group does also have their own buy now, pay later solution within their app as well, which I've seen. So I think it'll be interesting to see how that friendly, or at least competition, is gonna shape up to be.
Jeremy Au: I think the other part is that it's a good reminder that some verticals get saturated over time, right? And they end up with several market leaders, the first mover, second mover. If you look at ride-hailing in America, it's just Uber and Lyft, right? That's existing. You look at Southeast Asia is Grab and, arguably, Gojek as well. And I think once the market grows and hits a scale leader, it's just hard to build another app.
Jeremy Au: And I just remember somebody was complaining recently about how they were in Malaysia and like 15 ride-hailing companies had launched over the past couple of years as well, and everybody was like, "Why do we even have more ride-hailing apps coming into existence now? Isn't this market already saturated?"
Jeremy Au: So that's something that I think founders have to be thoughtful about — once a vertical has been saturated, you really have to approach it maybe from an orthogonal way. For Uber and Lyft in America, their competitor now that they worry about is really Cybercab, right? Which is Tesla opening up a new vertical into driverless taxis. Another one, of course, is they're worried about Waymo, right? Because both of these are 100% autonomous vehicles, no humans, versus Uber and Lyft have a human workforce, right? So I think early-stage startups really should be quite thoughtful about whether they can attack or push back against Grab-Atome and Shopee from a head-on basis.
Wing Vasiksiri: Yeah, for sure. It's been very challenging, right? These players are at scale, they're moving very fast, so I think going head-on is probably not the strategy. It's almost like you have to find your own niche and build specialization from there and scale out, right? We haven't seen that many verticalized consumer marketplaces.
Wing Vasiksiri: I think a couple years ago a lot of investors had a thesis that this would emerge. There's a few out there, but none of them have really gotten to scale, and so I think there's still some of the foundations that need to be built before we see some of those emerge, right?
Jeremy Au: Are you talking about like a Wayfair? Are you talking about — there was a pet food company in the US that I can't recall right now, which is also a verticalized consumer marketplace.
Wing Vasiksiri: Yes.
Wing Vasiksiri: Yeah, exactly. Stuff like that, and also like the brand.com direct to consumer. People are still buying primarily off of these marketplaces, right? So the consumer brand.com, there's a few that are out there, but they all have to use the offline retail strategy primarily as well to drive growth, and you need a really strong founder to be able to navigate that, so.
Building on Top of the Rails
Jeremy Au: Right. I think one interesting thing that you reminded me of is that founders really have to build on top of these rails. That's the other approach — rather than trying to attack or try to do another consumer play, I really like Asia Partners' technology report, which looks at China's wave by wave of infrastructure growth, right?
Jeremy Au: And they basically said technology progression is a linear thing where, if you don't have digital payments, it's hard to have consumer marketplaces because how else would a consumer buy something remotely, right, if they don't have a way to pay for it?
Jeremy Au: And then based on that consumer paid, eventually they build B2B transactions as well. So I thought it was just an interesting thing — what's something they can build on top, right, of Shopee's platform, on top of Grab's platform as well?
OpenAI and the Neolabs Land in Singapore
Wing Vasiksiri: Yeah, no, I think those are all the right questions. I think the other trend that I'm starting to see, which is quite interesting, is all these not just large labs like the OpenAIs of the world setting up shop in Singapore, but also the smaller neolabs, right? Like the Sierras, Cognition, Runway, Harvey, Legora — all opening up, setting up shop in Singapore as their APAC headquarters and starting to hire more people on the ground.
Wing Vasiksiri: I think it's super exciting because what we're seeing these guys do is, at least OpenAI, they're also getting very involved in supporting local startups, right? They have people on the ground building partnerships with VC startups, giving out credits. And maybe to tie it back to some of the stuff we talked about with Thailand last time — OpenAI announced, this was maybe two weeks ago, that they launched an initiative to support Thailand's next generation of AI startups.
Wing Vasiksiri: So it's a collaboration between OpenAI and Thailand's Ministry of Higher Education, Science, Research and Innovation, and they basically have an eight-week accelerator program where I believe you get OpenAI credits, and there's a couple of companies that are in this first cohort, which I think is really exciting.
Wing Vasiksiri: So yeah, OpenAI is giving each team some API credits, technical guidance, access to the frontier models, and yeah, hopefully we see more of this. I think it's quite exciting to see this come out of Thailand.
The Thailand and Malaysia Data Center Boom
Wing Vasiksiri: Yeah. No, let's talk about Thailand.
Jeremy Au: As well because it's interesting because there's a lot of data centers being built out in Thailand, which was I think initially surprising to me because if you think about data centers, you always read about them being built in America, being built in the Middle East, right? Where there's cheap energy, lots of land. So I was surprised to hear about Thailand's data center boom as well. What are you thinking is the drivers of that?
Wing Vasiksiri: Yeah, power is relatively cheap in Thailand compared to the region. It's also reliable, right? So you're able to get access to steady power.
Wing Vasiksiri: There's a lot of land, a lot of space out there. So a lot of the larger corporates that I've spoken to are now building out the power, land, rack, rental activity in order to build out all these data centers. My understanding is that most of these data centers are still serving Chinese hyperscalers.
Wing Vasiksiri: Thailand doesn't have many NVIDIA cloud partners, right? So I think access to the CPUs and GPUs from NVIDIA is actually the bottleneck here. So most of what's happening is like a bring-your-own-chip model, right? Where a lot of these data center developers, they'll get access to the land, they'll give you access to the power, they'll set up the infrastructure on that, but you have to bring your own chips, and usually that means it's a Chinese hyperscaler that has access to those chips and are the primary customers.
Wing Vasiksiri: I believe there's only one NVIDIA cloud partner, which is Siam.AI right now. I think those guys, as of today, are the only ones who have access to the NVIDIA chips. So yeah, we'll see how it develops, but I think it's really interesting to see a lot of investment go into that area, a lot of this being built out there.
Why Singapore Chose to Sit It Out
Jeremy Au: Yeah. I think it's really interesting because it's like an all-time high for technology export booms, right, in Singapore, in Penang Malaysia, and Thailand. In a lot of technology exports on the Singapore side, it's a semiconductor boom, the data center boom, integrated circuits, and then a lot of factories work across these three countries, right?
Jeremy Au: Singapore, Penang, Thailand, and they ship stuff around, and then they assemble from there as well. But it's interesting because from my perspective, obviously Singapore struggles to build data centers. We're just a small country, doesn't have a lot of space for data centers. I think that's one.
Jeremy Au: And two, of course, even though it's a refining and energy hub, it doesn't have an oil field of its own, right? Unlike Malaysia and Thailand, right? So the cheap energy is not something that we have. I think Singapore is a price taker of global energy markets, which means it always has reliable energy even in this energy crisis that we have globally.
Jeremy Au: But it would never really be cheap, right? Compared to pumping up in your own backyard. So I think that's a really interesting dynamic that the Singapore government has actually chosen to sit out from not participating in the data center building boom. I remember talking to a civil servant as well, and I think from their perspective was they felt like there were jobs that were being built by data centers, but they felt like it was not necessarily the jobs that Singapore felt like they were well-equipped to build because it's a lot of blue-collar jobs like electricians, plumbing, building.
Jeremy Au: And these are jobs that in Singapore, a lot of it is foreign labor, right? Because under employment passes and S passes, which are local visas. And so for their perspective, this is not creating local jobs, right? Which is something they're thinking about the political dimensions as well.
Jeremy Au: So I think data centers would not be an upcoming approach for the Singapore government because using up lots of land, using up lots of power, and using up lots of foreign worker quota for the blue-collar jobs would be quite difficult to sell politically in Singapore, which is, I think, a natural dynamic.
Wing Vasiksiri: Yeah. I think it's Thailand and Malaysia that have been at the forefront, at least in this region, with a lot of these data center buildouts. So yeah, we'll see how that plays out.
Jeremy Au: Yeah. I think it's also to do with the political stability as well, I would say relatively, if Malaysia and Thailand within Southeast Asia as well.
Jeremy Au: I think it's interesting to see here about the hyperscalers as well. I didn't notice that, but I think once you said it out loud, it became quite true, which is that I think it's a lot of the Chinese building out the hyperscalers. When you say that, yeah, it kind of clicks for them.
Jeremy Au: It's nearby for them, it's easy for them to travel to, and it's politically neutral for them to be able to build those data centers as well, whereas they can't really build in America, obviously because of geopolitical tension. I do know that they're trying to build a little bit in the Middle East as well, but it's also not a straightforward path for them as well.
Wing Vasiksiri: Yeah, so I think we're seeing a lot of boom from the Chinese hyperscalers. Almost all the buildout in Malaysia I think has been to serve them, right? We'll see the US labs end up taking some of these buildouts as well, yeah.
Jeremy Au: On that note, I think it's a good time to wrap up, and I'll see you next time.
Wing Vasiksiri: Awesome. Thanks Jeremy for having me on.
