Vietnam's AI ambitions hinge on one US$6.8 billion tech company

Business Times

29-05-2025

[HANOI] Four decades ago, Truong Gia Binh set up a technology company using a single computer in a room loaned by his then-father-in-law, general Vo Nguyen Giap, revered for leading Vietnamese troops in defeating the French and US militaries.
That company, FPT, is now Vietnam's biggest listed tech firm. It's central to the government's push to build a technology sector capable of competing with its regional rivals as it seeks to move the nation beyond assembling Nike shoes and Apple devices.
FPT has already had some success. Globally, it lists 130 Fortune Global 500 companies, including Airbus, Halliburton and Ford Motor, as clients. It's also partnered with Nvidia to build an artificial intelligence (AI) data centre in Vietnam, another in Japan, and is expanding into semiconductor chip design.
But there are significant challenges ahead as it seeks to compete with more established tech companies from the likes of India and Malaysia. FPT must also navigate a new era of tariffs initiated by US President Donald Trump.
'We work day and night,' Binh said. He's confident that, over the long term, the company can maintain an annual revenue growth rate of approximately 20 per cent.
Developing a leading-edge technology sector is Vietnam's 'way out of being a low-cost economic hub', said Lam Nguyen, managing director of IDC Indochina. The Communist government sees FPT as a corporate model to help the nation transition beyond its traditional manufacturing base to industries specialising in areas such as AI-related products, which Bain & Co estimates could be a US$990 billion global market by 2027.
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While not directly at risk from new US duties, FPT could experience 'indirect impacts because many of our global customers are affected by these tariffs', the company said.
FPT is bracing for possible global economic turbulence, and may 'adjust' its business plan for the challenging 20 per cent revenue growth target this year amid uncertainties, DNSE Securities said on its website, citing FPT chief executive officer Nguyen Van Khoa at the company's April shareholders' meeting. FPT is cutting 30 per cent of costs without hurting its core business, the brokerage said, citing Khoa.
It may also need to negotiate a closer relationship with the nation's watchful police. When asked about reports that the Ministry of Public Security, which has been tightening Internet regulations in recent years, seeks to take a majority stake of the company's Internet unit, FPT Telecom, the company said it has 'no additional information on this matter'.
Binh holds nearly 7 per cent of FPT, followed by the government, which has a 5.71 per cent stake.
'Followed' Ho Chi Minh
Binh's life tracks the history of the winning North Vietnamese forces. In 1954, his family 'followed' revolutionary leader Ho Chi Minh to Hanoi in the cause of independence, the FPT chairman said. The clan was so poor he wore clothes handed down from his sisters and watched as explosives from US bombers rained down on the city.
'My youth was about the lack of nearly everything,' said Binh, 69, who met Ho Chi Minh twice.
As a teenager, he was handpicked by the government to study in the former Soviet Union. Upon his return, he and 12 others founded the company, originally called Food Processing Technology at the suggestion of a government minister. It's now the seventh-largest publicly traded company in Vietnam, with a market capitalisation of US$6.8 billion. FPT has more than 80,000 employees and operations in 30 countries.
In 2024, the company recorded a 19 per cent jump in full-year revenue to 62.9 trillion dong (S$3.1 billion), aided by contributions from its FPT Software unit. From IT solutions for self-driving cars to industrial robots, FPT has diversified its product expertise in its quest for growth.
In April, Sumitomo and SBI Holdings announced they were each acquiring a 20 per cent stake in a FPT unit to hasten AI adoption in Japan.
FPT's emergence 'is very similar to the growth stories of some of the Indian IT leaders', said HR Binod, a former Infosys executive vice-president and an independent FPT board member.
The company, though, faces mounting challenges, from rising global competition to US tariffs.
'On your home turf, you are strong,' said Louis Nguyen, chief executive officer of Ho Chi Minh City-based private equity firm Saigon Asset Management, which previously owned shares in the company. 'When you compete in the global arena, you go against giants.'
Navigating growing geopolitical tensions and trade barriers means 'the company likely will need next-generation leadership with international experience', Lam Nguyen said.
Overseas flop
FPT's first overseas forays to Silicon Valley and Bangalore in the late 1990s were flops, said Chu Thi Thanh Ha, chairwoman of FPT Software. Facing what she described as a 'life-or-death moment', FPT Software gained a foothold in Japan in 2000 with a Nippon Telegraph & Telephone contract. FPT now has some 4,500 employees in Japan and expects that to rise to 5,000 this year, according to the company. FPT expects revenue from its Japan unit to jump to US$1 billion in 2027 from US$500 million in 2024.
Domestically, the government looks to FPT in its quest to have three AI centres and at least 100 chip design companies by 2030 in the country, and a semiconductor industry with annual revenue of more than US$100 billion by 2050.
'It's a national hero,' said Vinnie Lauria, Ho Chi Minh City-based co-founder of Golden Gate Ventures.
To that end, FPT – whose co-founders initially trained themselves with tech manuals purchased from Hong Kong during the US embargo of Vietnam – says it has trained thousands of technologists at its five universities nationwide. And it has set up 16 elementary to high school campuses where children as young as first grade begin learning programming languages.
'This is the new Vietnam,' Binh said. BLOOMBERG