Vietnam’s technology sector is attracting unprecedented interest from foreign investors.

For the first two months of 2025, the rapidly developing Southeast Asian economy drew US$6.9 billion in foreign direct investment ( FDI ), up 35.5% from the same period last year. While the manufacturing and real estate sectors continued to gain the biggest slices of the FDI pie, the amount flowing to science and technology surged 86% to US$354.6 million during the period, the biggest growth among all sectors.

As part of efforts to strengthen its competitiveness, Vietnam has elevated high-tech and artificial intelligence ( AI ) to its list of top development priorities. In line with this policy, the government has eased requirements to incentivize technology firms to establish a presence in the country.

Moreover, the Investment Support Fund provides a subsidy programme for research and development ( R&D ) projects involving semiconductors and AI, supporting up to half of their initial investment cost. Other high-tech investments and activities also enjoy a range of cost-reduction benefits.

Meanwhile, a Digital Technology Industry Law has been drafted to pave a sustainable and professional pathway for the country’s AI development. The proposed legislation emphasizes security and risk management in AI firms, with a focus on responsible innovation and energy-saving measures.

Vietnam’s ambition to become a major player in the AI sector has started to create waves. Nvidia, a leading supplier of AI hardware and software has signed a memorandum of understanding with the Ministry of Planning and Investment to establish its third global AI research hub and an AI data centre in the country.

Technology-related investments also include Samsung Display’s US$1.8 billion factory for OLED displays, semiconductor test service provider Amkor’s plan to triple the capacity of its existing semiconductor factory in Bac Ninh, and Foxconn doubling its investment in central Vietnam to US$200 million.

Amid optimism feeding through Vietnam’s tech industry, the government needs to broaden its policy coverage from large corporates to start-ups to cement its position as an AI hub. Power stability is another issue that must be addressed in support of the country’s rapidly growing AI sector.