Overview

The technology M&A market in Thailand remains highly active, solidifying its position as a key driver of investment in the Kingdom. The tech sector’s inherent value is amplified by its pivotal role in modernising and advancing other industries such as food and beverage, logistics, media, and telecommunications. Over the past year, strategic technology M&A deals have significantly bolstered these sectors.

The momentum in technology M&A is expected to persist, supported by several factors. These include the growing integration of artificial intelligence (AI), strong regional demand for data centre infrastructure, and the rapid digitalisation and evolution of the entertainment industry and other platform ecosystems. Combined with steadfast government support and Thailand’s dynamic tech environment, these trends point to continued growth in technology M&A as the decade progresses.

A Closer Look at the AI and Tech Environment in Thailand

The adoption of modern technologies, notably AI, has become ubiquitous in many countries, and Thailand is also showing significant development in this field.

Since the implementation of Thailand’s National AI Strategy and Action Plan (2022-2027), AI use in the government sector has gradually increased. Thailand’s digital economy is also expanding quickly, with the government’s Thailand 4.0 initiative encouraging digital transformation across industries. Thailand also has one of the largest supercomputers in the Asia-Pacific area, known as “LANTA”, which provides processing capacity for AI research and development. Thailand’s infrastructure positions it as a potential regional hub for AI innovation in Southeast Asia.

On the private sector side, with government agencies helping to promote the tech and AI industries through various investment privileges offered by the Thailand Board of Investment and several investment-attracting policies, we are seeing Thai businesses emerge as significant players in the regional tech and AI environment. Thailand today has more than 1,500 AI-related businesses, many of which use AI technologies in a variety of industries.

Attracting AI investment

While the world has seen significant investment in AI and other emerging technologies, Thailand’s tech scene is increasingly attracting the interest of both local and international venture capitalists and other investors. The country’s solid base in healthcare, agriculture, tourism, and the manufacturing industry creates various potential routes for technological integration and disruption. There has been major venture capital and fund co-operation between local and foreign institutions aimed at investing in technology and artificial intelligence, such as:

• KX Venture Capital, the venture capital investment arm of KASIKORN Business-Technology Group (KBTG), and AI Fund, a venture studio focusing on AI, announced their partnership this year to accelerate the implementation of AI in Thailand.
• Thailand-based investment firm Disrupt Technology Venture has announced its Disrupt Health Impact Fund to invest in DeepTech companies in the healthcare field, both domestically and internationally.

Global tech investment patterns are improving, but the impact on Thailand remains unpredictable. While the country’s tech scene seems promising, AI-related M&A activity in Thailand currently remains modest.

AI as a tool in M&A

Generative AI has begun to make substantial inroads into a variety of businesses and activities, among which are mergers and acquisitions. Gen AI integration is increasingly useful throughout the M&A lifecycle, from screening and selecting targets to expediting the due diligence process. Its ability to assess market data and review enormous volumes of papers and information allows it to derive important insights, from deal-making to completion.

As AI technologies advance, their integration into M&A processes is likely to grow increasingly complex. As of today, AI has begun to serve as a valuable resource for dealmakers, and we anticipate that in the future, AI will play an even greater role in the M&A scene.

Data Centres on the Rise in Thailand

As the global economy grows more digitally integrated, an organisation’s capacity to properly store, organise, and analyse data has become a critical component of efficiency and a key competency for businesses worldwide. This requirement is exacerbated by the growing influence of AI, which not only fosters innovation but also drives up demand for massive data storage and compilation.

Market demand for these data centres has been increasing along with the standardisation of flexible working arrangements, a developing digital economy, and robust consumer appetite for streaming and cloud services. Data centres are projected to be a highlight for investors, particularly after a tumultuous start to the decade. This trend is especially true for Thailand, which is swiftly establishing itself as a regional data centre powerhouse due to its infrastructure readiness.

One of the most significant challenges for data centres is the availability of power and proper access to land. Data centres can take up to millions of square metres and consume an average of 1,000 kWh per square metre. Consequently, these requirements have slowed the expansion of data centres in several Southeast Asian markets, including Singapore, which has been quoted as the world’s most constrained data centre market, with CBRE estimating that the Asian city-state has less than 4MW of available capacity and a record-low vacancy rate of less than 2%.

Thailand, on the other hand, is mostly unaffected by this obstacle because the country’s power infrastructure is capable of producing large amounts of electricity, and various industrial land plots have been made ready for the establishment of data centres. Thailand appears to be an appealing option for international data centre operators, given its strategic location in the core of ASEAN markets. Thailand has expertly positioned itself in this area, demonstrating a high level of digital capabilities.

This sector’s rapid expansion has been aided in part by strong government support, particularly from the Ministry of Digital Economy and Society (MDES) and the Thailand Board of Investment (BOI), which aim to lure significant tech investment into the country through various incentive packages.

This exponential development and growth is widely evidenced by the apparent inflow of foreign investment in data centre establishment from various multinational players. Recently, there have been reports that Alphabet Inc. (Google) is planning to invest approximately USD1 billion to establish Google’s first new data centre project in Thailand. It is projected that this historic investment might add USD4 billion to Thailand’s GDP by 2029.

While the investment in the data centre sphere in Thailand, at this stage, may only be greenfield developments and investments by major operators, we believe that, with the recent emerging demand, there will be an increase in interest from other institutional investors – eg, private equity, to acquire or invest in data centre projects in Thailand. We also expect to see certain smaller operators teaming up with some financial investors, through joint ventures, to invest in data centre projects.

Entertainment Industry Evolutionised by Digital Streaming Technology

As digital streaming continues to alter and transform the entertainment industry, important industry leaders and other investors are paying closer attention to merger and acquisition options. As a result, we anticipate an increase in M&A activity in this industry over the next few years.

Prior to the digital age, entertainment organisations, such as music labels and film corporations, relied heavily on physical distribution methods to sell their massive catalogue of movies and music, including tapes and CDs. Streaming services have changed the entertainment and media industries, and consumption is now primarily digital. Consumers can now enjoy handy entertainment options at a fair cost by paying set fees to access online content libraries or using free ad-supported versions. Digital distribution enables owners of content, such as music, movies, and TV shows, to produce a steady stream of revenue by distributing them via multiple digital streaming platforms, and this business model has proven to be extremely profitable.

As a result, the entertainment industry has reached a point where those who control the most entertainment content will have greater potential to make big revenue and profit. Key market players and investors, including digital streaming service providers; digital music and movie distributors; large entertainment corporations; and some investment funds, are competing for more music, film, and content libraries because of their ability to generate recurring revenue through digital streaming, leading to an exciting moment for M&A transactions in the entertainment and digital streaming sectors, with players making strategic purchases to grow their libraries and stay ahead of the competition. This tendency is projected to continue, both globally and in Thailand.

This trend is also reflected in the Thai market, with an increasing number of transactions occurring in the entertainment sector. During 2023–2024, one of Thailand’s top music labels, RS Group, divested its music catalogue to Universal Music Group in a groundbreaking transaction in Thailand’s music industry. The RS music archive is Thailand’s second largest, with over 10,000 master recordings and 6,000 copyright ownerships, publication rights, and licences dating back as early as 1981. It is anticipated that the M&A in the Thai media and entertainment market will continue to stay attractive to multinational entertainment companies and private equity funds.

Platforms Ecosystem Expansion

Companies engage in strategic M&As as digital platforms and e-commerce grow stronger, ranging from same-sector acquisitions to diversification into new business lines.

The recent acquisition of FoodStory, a point-of-sale (POS) start-up, by LINE MAN Wongnai, exemplifies this strategic approach, followed by LINE MAN Wongnai’s acquisition of Living Mobile Co., Ltd., a prominent Thai software company that has revolutionised the local restaurant industry with its POS systems, as well as its acquisition of Rabbit LINE Pay, which further supplements the payment system within its ecosystem.

Also, SCB X Plc. sold Purple Ventures Co., Ltd., the platform provider of the Robinhood application, to a group of investors led by the Yip In Tsoi Group. The Yip In Tsoi Group, with its extensive experience in IT digital solutions and high technology, aims to leverage its expertise to further expand Robinhood’s capabilities and market reach. Notably, the group has not previously operated in the food delivery platform business, marking a significant diversification of their portfolio.

These M&As demonstrate how companies are broadening their ecosystems, improving operational capabilities, and increasing competitiveness. By acquiring similar or adjacent businesses, they are expanding their service offerings and improving their market positions in an ever-changing digital ecosystem.

Other Tech Trends Outlook

Looking ahead to 2025, the M&A sector should see a positive rebound.

Smaller M&A set to bounce back

While high-profile acquisitions in areas such as food delivery platforms continue to attract public attention, the M&A landscape anticipates a rise in smaller transactions. These bite-sized acquisitions are gaining appeal due to their compelling value propositions, speed of integration, and ability to optimise the acquired target value. Acquiring a large technology company provides more potential scrutiny under merger control regulations than acquiring a small company. If this trend continues, Thailand’s M&A landscape will become broader and more dynamic, with transactions ranging from small to mid-sized to mega.

Back-office software as a service remains attractive

Another type of tech acquisition that has occurred and gained in value is Software as a Service (SaaS), which has already featured in a large number of M&A transactions. Looking ahead, we anticipate seeing more of these transactions in the future.

The SaaS acquisition trend is an important indicator of where true value is being created and recognised in the IT industry. As organisations continue to digitise and streamline their processes, the software companies that provide the foundation for this change are likely to remain in high demand in the M&A market.

Regulators in Support of Tech-related Investment

The BOI continues its support in the tech-related industry with its continuous grant of tax and non-tax incentives, subject to criteria and promotion schemes to promote targeted investment in Thailand. The investment in the tech-related industry in continuing support by the BOI includes:

• development of software, digital platforms, and digital content;
• digital infrastructure (data centres, cloud services, and international high-speed marine communication circuits); and
• other digital ecosystem-supported businesses.

Upcoming Regulations

Draft Platform Economy Act

This Draft Act aims to regulate a large number of digital platforms and related services, including (i) intermediary services; (ii) hosting services; (iii) online platforms; (iv) very large online platforms; and (v) gatekeeping platforms, both onshore and offshore. The key obligations mentioned in this Draft Act include transparency requirements, complaint mechanisms, reporting procedures, and content moderation. Additionally, the Draft Act incorporates preventive measures to maintain fair competition in the platform economy. Both the Electronic Transactions Development Agency (ETDA) and the Trade Competition Commission of Thailand (TCCT) will act as regulators under this Draft Act. The final draft and enforcement details of this legislative proposal are yet to be finalised.

Draft Act on the Promotion and Support of AI Innovations in Thailand

This Draft Act aims to promote and provide necessary support for the development of the AI ecosystem through legal mechanisms such as benefits for registration (access to the AI sandbox programme, databases to train AI, and AI Clinic); prescribed algorithm standards (such as human agency and oversight and technical robustness and safety); standard contractual terms for AI service providers; risk assessment; set-up of an AI compensation fund; and confidentiality of AI system data. This Draft Act aims to create an environment suitable for AI development. The definitive version and enactment of this regulation remain pending.

Draft Royal Decree on Business Operations that Use Artificial Intelligence Systems

This Draft Royal Decree aims to regulate AI systems based on risk levels with differentiation of the regulatory approach for each of the risks: Unacceptable Risk (prohibited); High Risk (requiring registration and risk management); and Limited Risk (transparency obligations). The Draft Royal Decree underwent a public hearing in late 2022. The final form and implementation of this legislation are yet to be determined.