It will also give AI training to 200,000 people in Malaysia and work with the government to boost the nation’s cybersecurity capabilities.
Microsoft is vying with the likes of Alphabet, Amazon.com and Alibaba Group Holding to win over businesses in Southeast Asia, a fast-digitising region of more than 650 million people.
Tech companies are expanding their operations in Malaysia and nearby countries such as Singapore, diversifying beyond China to reduce geopolitical risks amid tensions between Beijing and Washington.
“We are committed to supporting Malaysia’s AI transformation and ensure 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.
See also: H2G Green's unit GasHub signs two MOUs in the Philippines
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 US$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 center hotspots. Nvidia Corp. last year teamed up with local utility YTL Power International Bhd. to build a US$4.3 billion AI data centre park in the area.
AI adoption is still nascent in Southeast Asia but has the potential to add about US$1 trillion to the region’s economy by 2030, with Malaysia capturing about US$115 billion of that, according to a report by consulting firm Kearney.
See also: Mooreast forms partnerships with Norwegian and Korean firms
Microsoft this week said it’ll train a total 2.5 million people in AI skills in Southeast Asia by 2025. About 680,000 developers in Malaysia used the Microsoft-owned coding platform GitHub platform in 2023, a 28% annual increase.
Earlier during his trip, Nadella announced a US$1.7 billion investment in Indonesia and an undisclosed amount in Thailand in similar efforts to build out AI cloud and digital infrastructure.
As part of the Thailand outlay, Microsoft plans to invest about US$1 billion for a new data center in Thailand, the Bangkok Post reported.
