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Power crunch, red tape forcing Asia’s data centres out of hyperscaler hubs

Operators are pivoting towards a ‘decentralised’ model – which places data centres in ‘Tier-2’ cities

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Young Zhan Heng

Young Zhan Heng

Published Tue, Jan 13, 2026 · 07:48 PM — Updated Thu, Jan 15, 2026 · 10:44 AM
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    • Above: A data centre in Indiana in the US. While decentralised centres offer solutions that traditional hyperscalers struggle to answer, the two models are expected to coexist to meet rising AI demands.
    • Above: A data centre in Indiana in the US. While decentralised centres offer solutions that traditional hyperscalers struggle to answer, the two models are expected to coexist to meet rising AI demands. PHOTO: REUTERS

    [SINGAPORE] Operators are starting to move data centres out of metropolitan hubs and opting for a more decentralised model as the sector experiences record-high demand.

    Citing reasons such as straining power grids and intensifying regulatory friction at traditional hyperscaler hubs, data centre research firm DC Byte noted in its 2026 outlook report that “projects are increasingly stalling in the middle of the development pipeline”.

    Decentralisation of data centres is not an entirely new concept.

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