The numbers explain the urgency. Sri Lanka currently has about 5 MW of data center capacity, and the government puts its short-term need at 25 to 50 MW for cloud and AI computing. That gap is already slowing work like the Unique Digital Identity (SL-UDI) project, while banks and other organizations are pushing for sturdier infrastructure to link identity, data exchange, and payments to public and private services.
The request surfaced in talks in Colombo between Deputy Minister of Digital Economy Eranga Weeraratne and Chinese Ambassador Wei Huaxiang. They discussed deeper bilateral cooperation on AI infrastructure and Chinese government backing for the computing center. Chief Presidential Adviser on the Digital Economy Dr. Hans Wijayasuriya pointed to the technological benefits Sri Lanka has historically drawn from its ties with China, and Huaxiang expressed interest in research, development, and skills training. The Ministry of Digital Economy is also working toward a memorandum of understanding on AI cooperation.
The State Steps In Where Private Suppliers Fell Short
Private suppliers have not met rising demand, so the government plans to invest more directly in data center and cloud infrastructure. Wijayasuriya said it will take on that role even though it would prefer private sector solutions. Financial institutions are the most urgent customers, since they need sovereign, resident cloud infrastructure, and the same capacity supports Sri Lanka’s target of digitizing government transactions by 2030.
Energy is the harder constraint. The Ministry of Digital Economy is working with the Board of Investment on an incentive framework to draw domestic and foreign direct investment into data centers, AI, and cloud. Wijayasuriya compared Sri Lanka’s limited capacity with Malaysia’s roughly 1.5 gigawatts, and warned against courting foreign markets without weighing the economic value of the energy those facilities consume.
The sovereignty question runs through all of it. The government has outlined a hybrid sovereign cloud strategy, and officials have raised concerns about foreign system integrators handling sensitive identity data. The India-backed SL-UDI project is built on the Modular Open Source Identity Platform (MOSIP), and the proposed Chinese computing center is a separate initiative from it.
Hashlytics Take
Even the top of Sri Lanka’s 50 MW target is only about 3 percent of what Malaysia already runs, so this is catching up, not competing. The harder issue is the sovereignty label. An identity system built on Indian-backed software and a national compute center built with Chinese support are kept separate on paper, but sovereignty is decided by who builds, supplies, and operates the hardware that eventually hosts sensitive data, not by which project name sits on it. Colombo is leaning on two larger neighbors at once, and the energy bill for the center will fall on a small grid. Whether the center ends up genuinely sovereign will depend on those procurement and power terms, which the talks so far have not made public.
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