Singapore considers new licensing rules for data centres and cloud services

Caption language: en · Fetched: 2026-09-10

Welcome back. Some data centers and cloud service providers may soon face new licensing rules to increase resilience and efficiency. This comes as Singapore grows more reliant on such digital infrastructure. Industry players will be given time to adjust, but an analyst says retrofitting older data centers could cost more. Charlotte Lim reports. >> We buy many items at the click of a button, but making this happen behind the scenes are data centers powering the digital services we use. I'm at one of about 70 data centers here in Singapore, and what you see around me are servers supporting businesses across different sectors, from finance and health care to retail. And these facilities are set to play an even bigger role as Singapore builds up its computing power needed for artificial intelligence.

And security is top of mind for this operator. >> Every year we will run multiple incident drills, business recovery drills where our teams will simulate a individual system failure all the way to a building level failure, so that they have, you know, built-in that muscle memory of how to respond to any kind of incident within the building. >> Such safeguards are set to become more important. Under a proposed bill, major data centers will have to put in place security measures, prepare for disruptions, and report specified incidents to the authorities. This will apply to data centers with critical IT loads that consume at least 10 megawatts of electrical power. Cloud service providers that generate at least 100 million Singapore dollars in average annual revenue for users here over three preceding years will also need to comply.

And past disruptions have shown why these safeguards matter. In 2023, a cooling system failure at a data center led to major banking and payment disruptions, And a year later, a fire at another facility saw firefighting operations stretch beyond the day, affecting digital services. Data centers also consume large amounts of power and water. So, some operators will face separate licensing requirements to meet energy efficiency standards. >> If you have a more effective cooling and airflow system, you may not need to use as much power as well because the systems the IT racks and the IT systems the power units run more effectively. >> More than half of Singapore's data centers are expected to come under the new licensing regimes, but older facilities could face a tougher transition.

>> The ratio between the existing data center for new AI load will have new challenges. They have to rebuild the cooling systems such that they can extract more heat from the server generated from the operations. That in turn will cost more money and even different set of operational skills for running the data center. >> The government says it will continue working with the industry before finalizing the requirements.