Preparing your Trinity Audio player. . . Ho Chi Minh City, Vietnam’s most populous city, is making significant investments in cutting-edge technologies, such as blockchain, artificial intelligence (AI), and 5G, in its ambition to establish itself as one of Asia’s key digital hubs. Local reports indicate that the city plans to allocate at least 3% of its annual budget by 2030 towards research and development in the latest technologies. In 2024, the city’s budget was set at 502 trillion VND (approximately $20. 5 billion). This initiative aligns with Resolution 57-NQ/TW, a strategic framework introduced by the Communist Party of Vietnam in December of last year. The plan aims to expand the digital economy to comprise at least 30% of Vietnam’s GDP by 2030 and to position the nation as a high-income economy by 2045, with the digital economy contributing at least half of the national GDP by that year. Ho Chi Minh City aims to foster the creation of 5, 000 startups and five centers of excellence across key technological areas. Last year, Vietnam ranked 31st overall and fifth in Southeast Asia for the total number of startups globally.

Ho Chi Minh City and Hanoi, the capital, held positions of 111th and 157th in the world rankings, and were 6th and 7th in the region, respectively. However, Vietnam has not performed as strongly in the AI sector. While it ranked fifth in Southeast Asia for AI readiness, it was placed 39th globally according to one research study. To enhance its AI capabilities, Ho Chi Minh City plans to promote semiconductor manufacturing within its borders, as the city is home to ten million residents. Other Asian countries have become vital players in the expanding AI industry by producing the semiconductors that AI models rely on, with Taiwan and South Korea leading the way. Ho Chi Minh City will not be starting from scratch, as it is already hosting Intel’s (NASDAQ: INTC) $1. 5 billion semiconductor assembly and testing facility, which is the largest of its kind operated by the company worldwide. The city will face tough competition from other regional hubs for semiconductor leadership; for instance, the northern city of Bac Ninh houses a $1. 6 billion facility owned by the American company Amkor. In addition to nurturing new startups, Ho Chi Minh City plans to digitize its economy, aiming for 80% of transactions to be cashless. Watch: Blockchain & AI unlock possibilities.