Thailand's government on Friday asked developers of 49 data centers currently under construction to halt work, and froze approvals for another 117 projects. Officials have been given one month to draft national rules for the AI sector, which is placing strain on the country's power and water resources.

Why is Thailand's government stopping data center construction?

The move followed the first meeting of Thailand's new government committee on data centers, chaired by Finance Minister Ekniti Nitithanprapas, after which several news outlets reported that 49 projects under construction had been suspended.

However, Danucha Pichayanan, secretary-general of the National Economic and Social Development Council, said the state has no authority to stop the builds. Developers were simply asked to cooperate and voluntarily hold off until clearer regulations arrive, which officials expect within a month.

Ekniti clarified that the pause does not mean Thailand is "closing the door to data-center investment because the industry is critical to the country's competitiveness."

Prime Minister Anutin Charnvirakul likewise said the goal is tighter oversight rather than a ban on the technology. Speaking at the same meeting, the prime minister said the rules would be revised to be "airtight" and to put public safety first.

Before these measures, Thailand's Board of Investment (BOI) had approved 88 AI and data center projects worth 886 billion baht in the first half of 2026 — already exceeding the 623 billion baht logged across all of 2025.

Global operators are behind the surge in capital. Google opened a Bangkok cloud region in January that it says will add more than $40 billion to the country over five years. Microsoft committed over $1 billion to Thai cloud and AI infrastructure in March, and in May the BOI cleared a data infrastructure expansion for TikTok System (Thailand). Thailand has positioned itself as a Southeast Asian hub for such investment, competing with regional neighbors to attract hyperscaler spending.

According to Danucha, 35 data centers are already running, 11 of them under BOI oversight, while 166 more are in the pipeline as either under construction or awaiting sign-off.

Officials have, however, noticed recurring problems because the rapid expansion occurred without a single set of rules. Operators have had to seek permits from a scatter of agencies, and some registered as warehouses, which kept the industry's true scale hidden.

Which data centers have drawn public anger?

Public frustration is mounting over individual facilities rather than the industry as a whole. The energy ministry recently flagged a Bangkok data center for storing 200,000 liters of diesel in underground tanks without permission.

Days earlier, Bangkok Governor Chadchart Sittipunt said the capital had received six applications for large standalone facilities since 2021 and 2022, but only three were approved. The other three — including one that proposed building a data center beside a hospital — were sent back for review.

The most pressing concern is that large centers draw heavy loads of electricity and consume water for cooling — a concern shared by governments worldwide as AI training and cloud workloads push facilities to run around the clock. The government is now considering charging big operators higher power rates. A research group called Data Center Watch counted 75 projects worth about $130 billion that have been blocked or delayed worldwide by local opposition in the first quarter of 2026.

How will Thailand's lawmakers regulate the industry?

The Data Center Business Policy Committee has given agencies a one-month deadline to write minimum rules covering economic returns, environmental limits, and site safety. Four subcommittees will handle economics, infrastructure, sites and buildings, and the environment.

Officials also want a dedicated business category for data centers so operators can no longer hide under warehousing, as well as a one-stop approval path to replace the current agency-by-agency crawl.

For future projects, Ekniti said the plan is a competitive process in which investors "pitch" the benefits they would bring to Thailand, including how they would improve local income and support progress toward the country's net-zero target.

Separately, Thailand's government rolled out a roughly $48 million initiative in August offering one year of free AI model access to as many as 5 million citizens. The "TH-AI Passport" was designed to boost domestic AI adoption, which still lags behind the global average. The combined picture — accelerating foreign data center investment alongside state efforts to raise domestic AI use — frames what the new rules will have to balance in the month ahead.