Microsoft Commits $2.2 Billion to Boost Malaysia's AI Industry


Microsoft Corporation is committing $2.2 billion towards developing digital infrastructure in Malaysia, marking a significant investment in the region's burgeoning technology sector. Over the span of four years, the company under the leadership of CEO Satya Nadella intends to allocate these funds towards building infrastructure to support its cloud computing and artificial intelligence (AI) services. Additionally, Microsoft aims to provide AI training to 200,000 individuals in Malaysia and collaborate with the government to enhance the nation's cybersecurity capabilities.

Microsoft is competing with major players such as Alphabet Inc., Inc., and Alibaba Group Holding Ltd to attract businesses in Southeast Asia, a rapidly digitizing region with a population exceeding 650 million. These tech giants are extending their presence in Malaysia and neighboring nations like Singapore, aiming to diversify away from China and mitigate geopolitical risks amid ongoing tensions between Beijing and Washington.

"We are committed to supporting Malaysia's AI transformation and ensuring it benefits all Malaysians", Nadella said at the end of a whistle-stop tour of three countries in the region. In Kuala Lumpur, he met Prime Minister Anwar Ibrahim before addressing business leaders and developers at a company event.

The investment is the biggest by Microsoft in its 32 years in Malaysia and underscores Microsoft's effort to emerge as a winner in Asia. Nadella has pledged at least $7 billion to build out the company's services from Japan to India while touting AI as a growth engine and prodding countries to boost investment in the technology. In Malaysia, the southern Johor Bahru region connected by a causeway to Singapore is emerging as one of Asia’s rising AI data centre hotspots. Nvidia Corp last year teamed up with local utility YTL Power International Bhd. to build a $4.3 billion AI data centre park in the area.

AI adoption in Southeast Asia remains in its early stages but holds the potential to contribute approximately $1 trillion to the region's economy by 2030, with Malaysia expected to capture around $115 billion of that, as outlined in a report by a consulting firm. Microsoft announced this week its commitment to train a total of 2.5 million individuals in AI skills across Southeast Asia by 2025. In 2023, approximately 680,000 developers in Malaysia utilized the Microsoft-owned coding platform GitHub, marking a 28% annual increase.

During his recent visit, Nadella revealed Microsoft's plans for investments in Indonesia totaling $1.7 billion and in Thailand, though the exact amount remains undisclosed, following similar initiatives aimed at advancing AI, cloud, and digital infrastructure. As part of the investment in Thailand, Microsoft intends to allocate approximately $1 billion towards the establishment of a new data center in the country.

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