Data as the new oil: Nepal’s emerging push toward data centre economy amid AI and digital expansion

KATHMANDU: In 2006, mathematician and data scientist Clive Humby famously stated that “data is the new oil,” a phrase that has since become a defining metaphor of the digital age. Just as oil powered the industrial economy—fueling transport, manufacturing, and global trade—data now drives the digital economy, powering artificial intelligence, cloud computing, financial systems, and modern governance.

Today, the global race for data dominance is accelerating at unprecedented speed. Countries such as the United States, China, and members of the European Union, along with Gulf economies, are investing billions of dollars into data centres, recognizing that control over data infrastructure equates to control over future economic power. In this evolving landscape, Nepal is also gradually positioning itself within the digital infrastructure economy, with growing attention toward data centre development.

The importance of data centres is rapidly increasing in Nepal as digital dependency expands across sectors. Banking systems are becoming largely mobile-based, government services are shifting online, entertainment consumption is increasingly digital, and social media usage is widespread. Simultaneously, the adoption of artificial intelligence tools is steadily rising. In this environment, data has become central not only to communication and commerce but also to governance, security, and economic planning.

A major recent signal of this shift came on Baisakh 24, when Nepali entrepreneurs announced the development of a Tier-IV hyper-scale data centre under the name “Bichuten Data World,” to be constructed in Kathmandu and Birgunj with an estimated investment of around NPR 5 billion. The project reflects growing private sector confidence in Nepal’s potential as a digital infrastructure hub.

Government engagement is also increasing. Finance Minister Dr. Swarnim Wagle has already held discussions with investors of the Bichuten Data World project, assuring government facilitation for data centre development. Similarly, Minister for Communication and Information Technology Dr. Vikram Timsina has indicated that the government is studying the feasibility of foreign investment in large-scale data centres, particularly from multinational technology companies.

Industry experts argue that Nepal’s digital transformation is no longer theoretical. According to Huawei Nepal Technology Director Rohit Chandra Shah, who is also the country’s first Accredited Tier Specialist (ATS), data centre demand is expanding globally and across all sectors. He notes that earlier only telecom companies relied on data centres, but now every industry—from banking and education to government and media—depends on them.

Huawei Technologies has been active in Nepal for over a decade, providing data centre solutions and infrastructure support. Shah states that the company has already helped build more than a dozen small and large data centres and is now shifting focus toward AI-integrated data centres. These next-generation facilities are expected to support cloud computing, 5G networks, smart cities, and automated industries.

A data centre is no longer just a physical space storing servers. It is becoming the backbone of the digital economy. Future systems will rely on data centres for processing artificial intelligence workloads, managing real-time cloud services, and enabling high-speed digital connectivity. Energy efficiency, intelligent management systems, and green infrastructure are becoming key priorities in global data centre design.

Shah highlights that even a small digital banking process such as Know Your Customer (KYC) now requires significant data storage, sometimes between 1 MB and 15 MB per user. As digitalization expands, the pressure on data infrastructure increases exponentially. Any disruption in a data centre can potentially affect entire financial systems, making reliability critical.

In Nepal, both public and private sectors are investing in data infrastructure. The government has been advancing its “Digital Nepal” initiative, aiming to migrate services online and improve digital governance. The National Information Technology Center is responsible for managing key government data systems, while plans for a centralized government cloud infrastructure are under consideration.

Currently, Nepal operates several data facilities across institutions. The government’s Integrated Data Management Center, established in Singha Durbar with Korean assistance in 2009, supports domain registration, website hosting, and backup services for government systems. Nepal Telecom operates data centres in Jawalakhel and Bhairahawa, while private telecom and internet providers such as Ncell, WorldLink, and others have developed their own infrastructure, including major facilities in Nakhu and Syuchatar.

Experts believe Nepal is still in the early phase of data centre development, but the long-term potential is significant. Some industry leaders argue that Nepal could emerge as a regional data hub due to its geographical location, cooling climate, and potential for lower operational costs.

Nepal can become a regional data centre hub if cost efficiency and reliability are ensured. Cooler temperatures reduce energy consumption for cooling systems, making Nepal attractive for energy-intensive AI data centres.

AI-driven infrastructure, particularly GPU-based servers, generates extremely high heat, pushing global data centres toward advanced cooling technologies. In this context, energy management and thermal regulation are becoming central challenges. Companies like Huawei are investing in integrated solutions that combine power systems, backup energy, networking, cooling, and cloud platforms into unified architectures.

Huawei’s approach includes AI-based automation systems capable of monitoring temperature, power consumption, network performance, and potential risks in real time. This reduces operational costs and improves system reliability. The company is also promoting modular data centres, which can be rapidly deployed and scaled according to demand, making them suitable for developing economies.

Despite these advancements, Nepal faces structural challenges. Electricity stability, high-speed internet infrastructure, international connectivity, and cybersecurity remain key constraints. Data protection laws and regulatory frameworks are still evolving, creating uncertainty over data sovereignty and storage governance.

Data centre standards are typically guided by international institutions such as the Uptime Institute, which classifies facilities from Tier I to Tier IV based on reliability and uptime performance. Tier III and Tier IV systems, which offer high redundancy and near-continuous operation, are essential for banking, telecom, and large-scale digital services. In Nepal, most advanced facilities currently fall under Tier III, while Tier IV infrastructure is only beginning to emerge.

Other global standards include ANSI frameworks and BICSI guidelines, which regulate technical infrastructure design and operational safety for ICT facilities.

However, the sector remains capital-intensive. Building a modern data centre requires significant investment in power systems, cooling technology, cybersecurity, and skilled human resources. In addition, the rise of AI increases cybersecurity risks, making digital protection a critical priority alongside infrastructure expansion.

As Nepal continues its digital transition, experts emphasize that data centres will become foundational infrastructure for the economy. Whether for financial systems, e-governance, AI development, or global connectivity, the ability to store, process, and secure data domestically may determine Nepal’s future position in the global digital economy.