Southeast Asia's digital economy is on track to reach an impressive US$1 trillion in the coming years, a figure that could potentially double with the right policies in place, according to Boston Consulting Group. With a population of 692 million—more than twice that of the United States—the region's economy continues to outpace global growth rates, driven by favourable demographics and proactive government policies. At the heart of this rapid growth lies the region's digitally savvy, mobile-first population and an insatiable demand for technologies such as fintech, e-commerce, and AI-driven innovations. However, this technological surge is underpinned by a critical enabler: robust cloud infrastructure.

Cloud providers have responded to the growing demand with unprecedented investments in the region. According to Statista, the public cloud market in Southeast Asia is forecast to grow at a 19% CAGR from 2025 to 2029, reaching US$41 billion by 2029. Key players are ramping up their commitments: • AWS: $9 billion in Singapore (2024-2028), $6.2 billion in Malaysia through 2038, and $5 billion in Thailand over 15 years. • Microsoft Azure: $2.2 billion in Malaysia and $1.7 billion in Indonesia over four years. • Google Cloud: $2 billion in Malaysia over six years and $1 billion in Thailand. • Oracle Cloud: $6.5 billion for a new public cloud region in Malaysia. • IBM: No announcements on large-scale investments. Focusing on hybrid cloud services, AI-powered innovations, and partner network expansion, with a strong emphasis on sustainable and efficient operations.

These investments signify not just economic confidence but also a recognition of Southeast Asia's pivotal role in the global cloud ecosystem.

However, these massive investments come with a critical environmental cost. Data centers, the backbone of cloud infrastructure, are notorious for their energy consumption, carbon emissions, and water usage.

• Energy Use: Data centers require immense power to operate 24/7, contributing significantly to carbon emissions.

• Water Consumption: Cooling systems for data centers often use millions of gallons of water annually, straining local water resources.

• E-Waste: Rapid technology upgrades lead to large volumes of electronic waste, posing disposal challenges.

With the spotlight on sustainability, it is imperative to ask:

• How much of the multi-billion-dollar investments are earmarked for addressing these environmental challenges?

• Are cloud providers innovating fast enough to offset their environmental impact?

• AWS: Pledged to power operations with 100% renewable energy by 2025.

• Microsoft Azure: Aims to become carbon negative by 2030 and eliminate all historical emissions by 2050. It’s goal is to be also to be zero waste by 2030, applying circular economy principles.

• Google Cloud: Achieved carbon neutrality in 2007 and plans for 24/7 carbon-free energy by 2030.

• Oracle Cloud: Announced energy-efficient data centers but lacks publicly shared measurable goals for Southeast Asia.

• IBM: Committed to carbon neutrality by 2030, with plans to reduce greenhouse gas emissions by 65% by 2025 and use 90% renewable energy for operations by 2030. It prioritizes circular economy initiatives to minimize e-waste and advocates for energy-efficient data center designs.

Despite these initiatives, details remain scarce on local efforts in Southeast Asia. For instance:

• How are cloud providers addressing water consumption in water-scarce countries such as Thailand and Indonesia?

• Are cloud providers sustainability goals aligned with the speed and scale of digital expansion in the countries they are investing in?

The Southeast Asia digital economy represents a once-in-a-lifetime opportunity for growth and innovation. Yet, its success must not come at the cost of the environment. Policymakers, cloud providers, and industry stakeholders must prioritize: • Transparent Reporting: Providers should disclose the percentage of investments dedicated to sustainability initiatives. • Localized Strategies: Tailor sustainability efforts to address regional challenges like water scarcity and renewable energy accessibility. • Collaboration: Governments and providers must work together to create incentives for green technologies and sustainable practices.

The future of Southeast Asia's digital economy lies not just in how fast it grows but also in how responsibly it evolves. Achieving this balance will determine whether this region can sustain its growth trajectory while preserving its natural resources for future generations.