Vietnam is emerging as a significant player in the global artificial intelligence (AI) ecosystem. Through strategic government policies and international collaborations, the country is positioning itself as a hub for AI innovation in Southeast Asia, with a notable example being NVIDIA’s recent investment in Vietnam.
Overview of Vietnam’s AI development
Vietnam’s AI sector has experienced substantial growth, driven by technological advancements, government support, and increased integration of AI across industries such as banking, healthcare, transportation and education[1]. The country’s AI market is projected to reach 753 million USD in 2024, with a CAGR of 28% from 2024 to 2030, reflecting its capacity to adapt to global technological trends[2]. Vietnam has made remarkable progress regarding its preparation for AI integration and development domestically. However, it should be noted that the domestic AI ecosystem is still in the early stage of developing with the IMF’s AI Preparedness Index score of 0.48 in 2023, which is lower than the average of the Asia-Pacific region and the leading ASEAN neighbors[3].
Vietnam’s AI Preparedness Index Comparison in 2023
Source: IMF
Vietnamese companies are actively investing in artificial intelligence (AI) research and infrastructure, positioning the country as a burgeoning hub for technological innovation.
– FPT began development as early as 2013 and commenced work on a 170-million-USD AI Center in 2020 focusing on research, software production, and digital transformation support[4].
– Viettel has researched and piloted the development of a large-scale Vietnamese language model and a virtual assistant for officials and civil servants at the MoIC since 2023[5].
– The market also attracts foreign investors, especially in the data center segment[6], with a notable example being Google aiming for a “hyperscale” data center by 2027[7].
Vietnam’s strategy for AI ecosystem development
The government recognized the importance of AI in 2014[8] and has prioritized AI research and development since the National Digital Transformation program[9]. Decision No. 127/QD-Ttg, approved in January 2021, focuses on intensifying AI research, development, and application, intending to make AI a pivotal technology in Vietnam’s Fourth Industrial Revolution[10]. By 2030, Vietnam aspires to be an innovation hub in AI research, development, and application in ASEAN and the world[11].
Table 1: Summary of Vietnam’s objectives about AI following decision no. 127/ QĐ-TTg
| No. | Objectives | Objectives to 2025 | Objectives to 2030 |
| 1 | Promote AI as a key technology sector | – Top 5 ASEAN and top 60 globally in AI R&D and application – Develop 5 reputable AI brands – Establish 1 data center |
– Top 4 ASEAN and top 50 globally in AI R&D and application – Develop 10 reputable AI brands – Establish 3 data centers; establish a sharing big data and computing network – Establish 50 economic and socio-economic data |
| 2 | Position Vietnam as an AI center for renovation, creativity, development of solutions, and application | – Establish 2 AI innovation centers – Increase AI startups and investment – Upgrade and establish 10 AI research and training facilities |
– Establish 3 AI centers – Develop high-quality AI talent; increase the number of AI scientific works and patent application. – 1 top-20 research facility in ASEAN |
| 3 | Foster a creative society and effective governance | – Adopt AI in public administration and services – Improve the effectiveness of government administration system in key cities |
– Provide AI skills for personnel – Apply AI in national defense, disaster prevention, and others – Apply AI to promote economic sectors |
Source: Vietnam Government Portal, B&Company synthesis
In order to achieve such targets, the government sets out five strategic directions in AI development[12].
– Firstly, the government sets to develop an AI-related system of legislative documents and legal framework to promote AI research, development, and application while safeguarding individual and organizational rights
– Secondly, the government highlights the importance of building data infrastructure, including mechanisms for data sharing, establishing common-use databases, and advancing national capabilities in high-performance and cloud computing
– Thirdly, the strategy for developing Vietnam’s AI ecosystem focuses on building human resources through skill training, establishing key AI research and training centers, prioritizing investments in essential AI platforms and products, and attracting investment to foster AI enterprises and brands
– Fourthly, AI application is promoted by the development of AI-driven enterprises while AI will be intergrated into public administration, national defense, and other socio-economic sectors
– Lastly, the government encourages international partnership in the sector through workshops, partnership events, and attractive policies to drive high-tech investment sources to the country
Workshop “Shaping Vietnam’s AI future” in Hanoi by the National Innovation Center and Google
Source: MPI
NVIDIA investment in Vietnam: a case study
Vietnam’s favorable landscape coupled with the government’s strategic vision for AI research and development has attracted international corporations to invest in the AI ecosystem in Vietnam, with NVIDIA’s investment being a recent notable example. On December 5th, 2024, NVIDIA and the Vietnamese government signed a MOU on December 5th, 2024, announcing the company’s investment to develop (1) a research center and (2) a data center in the country[13].
– The research center will leverage Vietnam’s robust talent pool and collaborations with industry leaders, startups, and government agencies to focus on AI development and drive innovation in sectors like healthcare, education, and agriculture. The facility also aims to foster local talent through training programs and partnerships with universities.
– On the other hand, the state-of-the-art AI data center will support the country’s push for digital transformation, providing critical infrastructure for AI applications and cloud computing. By enhancing local computational capabilities, NVIDIA is helping Vietnam accelerate its AI adoption across industries.
The partnership with the Vietnamese government is not NVIDIA’s only project locally, as NVIDIA plays a critical role in facilitating AI computing technologies. FPT is leveraging NVIDIA’s advanced graphics processing units (GPUs) to build a $200 million AI factory[14], while Viettel is integrating NVIDIA technologies to enhance its telecom and smart city solutions[15]. NVIDIA has also expanded into AI applications, signified through the acquisition of VinBrain, an AI unit of the Vietnamese colorate VinGroup focusing on AI and IoT in the healthcare sector[16].
Prime Minister (Pham Minh Chinh) and NVIDIA founder and CEO (Jensen Huang) bear witness to the signing of the agreement in Hanoi
Source: Vietnamnews
NVIDIA’s investment in Vietnam represents a strategic move in the tech giant’s global outreach and a significant milestone for Vietnam’s AI ecosystem. By investing in infrastructure, research, and collaboration, NVIDIA is not only reinforcing Vietnam’s position as a growing innovation hub but also setting a precedent for international partnerships in AI development. The two facilities further develop local expertise, laying the groundwork for the nation’s advancement in AI research, development, and application. These partnerships also highlight the country’s tech-friendly policies, such as tax incentives for foreign investors and a focus on improving digital infrastructure.
Challenges for AI development in Vietnam
While the national development strategy and recent global partnerships present growing potential for the domestic AI ecosystem, there are challenges that can impede Vietnam’s progress.
Firstly, the country faces a significant deficit of skilled AI professionals. The workforce only meets 10% of recruitment demand, while only about 30% of the 55,000 IT graduates annually are capable of working in fields related to AI[17]. In addition to the shortage of AI talent, Vietnam faces other challenges such as limited access to top AI experts and advisors to evaluate and validate products in line with market needs[18].
Secondly, the rapid advancement of AI technologies has outpaced the development of comprehensive ethical guidelines and legal regulations in Vietnam, raising concerns about data privacy and the potential misuse of AI[19].
Lastly, while Vietnam’s digital infrastructure is improving, significant enhancements are still required to support large-scale AI initiatives. Challenges include limited access to necessary infrastructure, platforms, and tools for enterprises, which hampers the rapid development, commercialization, and scaling of AI products[20].
Conclusion
Overall, AI has been set to become a driving force for Vietnam’s economic growth and technological advancement. With proper strategic directions, the government has worked toward creating a favorable landscape for high-tech investment and has incentivized the development of the AI ecosystem domestically. NVIDIA’s partnerships with the Vietnamese government and other industry leaders are a recent success story for the nation’s efforts and highlight the potential growth of AI research and development in the country.
[1] ICTVN. Applications of AI in Various Fields in Vietnam and Recommendations <Assess>
[2] Vietnamplus. NVIDIA deal – catalyst for Vietnam’s tech growth: investment site <Assess>
[3] IMF. AI Preparedness Index (AIPI) <Assess>
[4] Reuters. FPT consortium commences work on $173 mln AI centre in southern Vietnam <Assess>
[5] Vneconomy. Vietnamese technology enterprises realize the aspiration for AI <Assess>
[6] The Saigontimes. Foreign investment in data centers: The race is heating up <Assess>
[7] Reuters. Google considering large data centre in Vietnam, source says, in nation’s first by US big tech <Assess>
[8] VJST. Development of Artificial Intelligence in Vietnam: Current Situation and Solutions <Assess>
[9] ICTVN. Deputy Prime Minister Vu Duc Dam: ‘AI drives Vietnam’s rapid and sustainable development <Assess>
[10] MOST. Artificial Intelligence will be the spearhead of Vietnam’s Fourth Industrial Revolution <Assess>
[11] Vietnamnews. Việt Nam looks to become AI hub in ASEAN by 2030 <Assess>
[12] VGP. Decision No. 127/Qd-Ttg on issuing The National Strategy on Research, Development and Application of Artificial Intelligence until the year 2030 <Assess>
[13] Vietnamnews. NVIDIA to build AI research and data centres in VN <Assess>
[14] VnEconomy. FPT Invests $200 Million in NVIDIA Partnership to Drive Vietnam’s AI Transformation <Assess>
[15] Viettel. Viettel enters AI collaboration with NVIDIA <Assess>
[16] The Investor. Nvidia acquires AI unit of Vietnamese private giant Vingroup <Assess>
[17] MoST. Challenges in AI development in Vietnam <Assess>
[18] MoST. Challenges in AI development in Vietnam <Assess>
[19] Vietnamnet. Vietnam launches AI Ethics Committee to lead responsible innovation <Assess>
[20] Vietnamnews. NIC, Google launch ‘Build for the AI Future’ initiative to propel AI development in Việt Nam <Assess>
| B&Company, Inc.
The first Japanese company specializing in market research in Vietnam since 2008. We provide a wide range of services including industry reports, industry interviews, consumer surveys, business matching. Additionally, we have recently developed a database of over 900,000 companies in Vietnam, which can be used to search for partners and analyze the market. Please do not hesitate to contact us if you have any queries. info@b-company.jp + (84) 28 3910 3913 |
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