Microsoft bets big on South-east Asia, pledges billions in AI and cloud investments

MICROSOFT chairman and chief executive Satya Nadella last week completed a three-country tour across South-east Asia from April 30 to May 2, with each stop delivering big-ticket investments and upskilling initiatives.

His high-level visit followed Apple chief Tim Cook’s Asean tour to Indonesia, Singapore and Vietnam last month, and Nvidia CEO Jensen Huang’s trips last December to Malaysia, Singapore and Vietnam.

Microsoft is vying with the likes of Google, Amazon and Nvidia to expand its footprint in South-east Asia, a fast-growing region that is seeing increasing demand for these companies’ services.

Here’s a roundup of what went down in each country that Nadella visited, and how Microsoft’s latest investments compare with its competitors.

First port of call: Indonesia

Nadella’s first stop was Indonesia, where Microsoft announced that it will invest US$1.7 billion over the next four years in new cloud and artificial intelligence (AI) infrastructure, as well as in AI skilling opportunities for 840,000 people.

This marks the single largest investment in the firm’s 29-year history in South-east Asia’s largest economy.

Just last month, Nvidia and Indonesia’s telco firm PT Indosat Ooredoo Hutchison announced plans to build an AI centre worth US$200 million in Central Java this year.

And in December 2021, Amazon Web Services (AWS) – the cloud computing platform of Amazon – pledged to invest US$5 billion in Indonesia over the next 15 years, launching its first cloud infrastructure region for the nation.

Second destination: Thailand

The next day, Nadella was in Bangkok where Microsoft announced that it will open its first data centre region in Thailand to expand the availability of the company’s hyperscale cloud services.

The move follows growing demand for cloud computing services in Thailand from enterprises, local businesses, and public sector organisations, said Microsoft.

Thai Prime Minister Srettha Thavisin hailed the announcement as a “significant milestone” in the kingdom’s aspiration to become a regional digital economy hub.

In August 2022, Google announced plans to bring a new Google Cloud region to Thailand, but did not give further details.

In October 2022, AWS pledged an estimated investment of US$5 billion in Thailand over 15 years to boost its cloud infrastructure.

Final stop: Malaysia

The following day, on May 2, Microsoft revealed plans to invest US$2.2 billion in Malaysia over the next four years.

The investment – the single largest in Microsoft’s 32-year history in the nation – includes building cloud and AI infrastructure, creating AI skilling opportunities for an additional 200,000 people and establishing a national AI Centre of Excellence.

This will not be Microsoft’s first foray into the South-east Asian nation.

In Apr 2021, it announced its intention to establish its first data centre region in Malaysia, which has the distinction of being the top destination for data centre investment in South-east Asia.

The country received data centre-related investments amounting to RM76 billion (S$21.7 billion) from 2021 to March 2023, said Minister of Investment, Trade and Industry Tengku Zafrul in August 2023.

He added that Malaysia aspires to become a data centre hub not just in South-east Asia, but also in wider Asia.

As part of a cabinet reshuffle last December, Malaysia hived off its digital ministry from the Communications and Digital Ministry to meet growing demands within the country’s digital space.

In August 2022, Google – like in Thailand – announced its plans to bring a new Google Cloud region to Malaysia, also without providing details.

In March last year, AWS pledged to invest US$6 billion by 2037 to boost its cloud infrastructure in Malaysia.

Last December, YTL Power International – the utilities unit of Malaysian conglomerate YTL – said it is partnering with Nvidia to develop AI infrastructure in Malaysia.

The deal was said to include collaborations in building supercomputers and a large language model in Malay.