[KUALA LUMPUR] Tech giant Microsoft will invest RM10.5 billion (S$3 billion) in cloud and artificial intelligence (AI) infrastructure in Malaysia over the next four years in accelerating the country’s digital transformation.

The announcement was made by Microsoft chairman and chief executive Satya Nadella, during the AI National Leadership Forum in Putrajaya on Thursday (May 2).

He also met Malaysia’s Prime Minister Anwar Ibrahim, Minister of Investment, Trade and Industry Tengku Zafrul Aziz, as well as other ministers, after the forum.

Nadella’s visit to Kuala Lumpur is part of his South-east Asia tour to promote Microsoft’s generative AI technology, in view of the rising demand for AI computing in the region. Malaysia is the final leg of his trip.

He visited Indonesia and Thailand earlier this week, with announcements to invest US$1.7 billion in Indonesia, and committed to open the first regional data centre in Thailand. These investments aimed to enhance its hyperscale cloud computing and AI infrastructure.

The US tech giant has a longstanding relationship with South-east Asia, a region experiencing a surge in demand for data centres and advanced technologies to drive e-commerce, digital transactions and disruptive tech startups. Microsoft also pledged to train 2.5 million people in South-east Asia in the use of AI by 2025.

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Largest investment in 32 years

The RM10.5 billion investment in Malaysia marked Microsoft’s single largest investment in its 32-year history in the country, said the company in a statement as Nadella gave a keynote speech in Putrajaya.

He said the investments in digital infrastructure and skilling will help Malaysian businesses, communities and developers apply the latest technology to drive inclusive economic growth and innovation across the country.

The investment will help the country to build AI and cloud infrastructure, creating an AI centre of excellence and giving AI training to as many as 200,000 Malaysians.

The fresh investment plan will enable Microsoft to meet the growing demand for cloud computing services in Malaysia, as well as allow the country to capitalise on the significant economic and productivity opportunities presented by the latest AI technology, he added.

Microsoft started its operations in Malaysia in 1992 and employs more than 200 employees across its offices in Kuala Lumpur and Penang, according to its website.

Research by global consulting firm Kearney showed that AI could contribute nearly US$1 trillion to South-east Asia’s gross domestic product by 2030, with Malaysia poised to capture US$115 billion of this amount.

In a separate statement, the Ministry of Investment, Trade and Industry said the new investment is part of Microsoft’s ongoing commitment, which was announced in 2021, to establish the tech giant’s first data centre region in the country.

Tengku Zafrul said Microsoft’s development of essential cloud and AI infrastructure, together with AI skilling opportunities, will significantly enhance Malaysia’s digital capacity and further elevate the country’s position in the global tech landscape.

“Together with Microsoft, we look forward to creating more opportunities for our small and medium enterprises and better-paying jobs for our people, as we ride the AI revolution to fast-track Malaysia’s digitally empowered growth journey,” he added.

In a post on X, formerly known as Twitter, Anwar said Microsoft’s investment demonstrates its confidence in the country’s strong economic fundamentals, clear and focused policies, investor-friendly environment and political stability.