A decisive reshaping of hyperscaler – large-scale data centre platforms – expansion is taking place as grid constraints, permitting delays and the infrastructure intensity of artificial intelligence ( AI ) redirect investment patterns, placing the Asia-Pacific region firmly in the spotlight, according a recent report.

While the Americas and the Europe, Middle East and Africa regions continue to grapple with saturated grids and increasingly complex regulations, Asia-Pacific has stepped into a central role, transforming from a late entrant into the fastest-growing region for hyperscale cloud infrastructure, finds intelligence platform DC Byte’s The Hyperscale Build Race 2025 report, which tracks over 8,000 data centre facilities globally, including AWS, Google, Microsoft and leading Chinese cloud providers, and outlines how hyperscalers are reshaping their expansion strategies in response to growing challenges.

Asia-Pacific pivot

In the early 2010s, Western hyperscalers entered Asia-Pacific via established hubs like Singapore, Tokyo, Hong Kong and Sydney, the report reveals, drawn by robust infrastructure and business ecosystems.

However, by the early 2020s, land scarcity, power limitations and regulatory tightening, especially in Singapore and Japan, pushed providers to expand regionally.

Hyperscale capacity in Asia-Pacific between 2020 and 2025, the report shares, has grown at a compound annual rate of 32.9%, surpassing other regions in both speed and scale.

This shift ushered in a second phase of growth centred on Southeast and South Asia. Markets like Malaysia, Indonesia, Thailand and India are now attracting sustained interest, thanks to abundant land, scalable power infrastructure and pro-investment policies.

Johor, Jakarta, Bangkok and Indian metro regions, the report highlights, are the new pillars of hyperscale development.

“Asia-Pacific’s growth is no longer confined to traditional hubs,” notes Jingwen Ong, DC Byte’s Asia-Pacific research manager. “Hyperscalers are deploying at greater scale in markets that guarantee timely delivery at lower costs.”

Risk, opportunity

Asia-Pacific’s leasing model is evolving. Colocation had dominated the region’s deployment strategy, even in advanced markets. But by 2024, self-builds, particularly in Australia, India and Malaysia, the report’s data show, have overtaken colocation in several top markets.

In power-constrained regions, hyperscalers are turning to early pre-leasing strategies to secure grid capacity, sometimes before construction even begins.

This dual-track approach – self-builds for long-term control, leasing for speed – is enabling hyperscalers to navigate fragmented regulations and project timelines across diverse jurisdictions.

The development of the regulatory environment in Asia, according to the report, remains uneven. Mature economies are introducing stricter environmental rules, while emerging markets are accelerating approvals to win and attract digital infrastructure capital.

This dual-speed regulatory landscape presents both risk and opportunity. For first movers, supportive local governments in South and Southeast Asia are offering incentives, streamlined permitting and cooperative utility frameworks, making these regions essential components of the global deployment strategy.

By contrast, however, policy constraints in established hubs are extending delivery timelines and reshaping strategy. Singapore’s moratorium on new data centres ( lifted in 2022 with revised efficiency standards ) and Japan’s grid congestion underscore how even leading economies must now try to balance digital growth with sustainability commitments.

Pressure in the West

Notably, traditional data centre giants, such as Virginia ( US ), Frankfurt, London and Dublin, the report points out, are now facing acute power scarcity, extended permitting cycles and local community pushback. Entire campuses are now being pre-leased years in advance, while new build corridors in the US Southeast and Southern Europe are absorbing redirected demand.

This global rerouting of hyperscale capital places even greater importance on emerging markets, particularly in Asia, as the digital infrastructure industry enters a new phase defined not by speed alone, but by strategic certainty.

Asia-Pacific’s growing prominence in the hyperscale data centre race, however, is grounded in more than just rising demand. The region is increasingly equipped with the practical foundations needed to lead.

Regional assets like access to land and scalable energy, improving regulatory alignment and a deepening pool of development expertise are also not temporary advantages; they are now embedded and structural.

Governments across South and Southeast Asia, the report underscores, are gaining experience in streamlining approvals, managing infrastructure trade-offs and balancing environmental goals.

At the same time, Asia-Pacific’s financial and industrial ecosystems are maturing, enabling more complex self-builds, early leasing and integrated delivery models to take root.

Rather than being a default beneficiary of global rerouting, Asia-Pacific is now developing into an intentional choice for hyperscalers seeking long-term certainty.

With the financial capacity, regulatory adaptability and operational momentum to support hyperscale growth, Asia is well-positioned to shape the next phase of global data centre development and take the lead in the long term, not by chance, but by design.