Microsoft bets $2.2bn on Malaysia hub for cloud, AI

• Microsoft will invest in Malaysia’s digital transformation over the next four years 
• The initiative includes the construction of cloud infrastructure to support AI workloads, training 200,000 Malaysians, government partnerships and developer support
• The investment improves Malaysia’s chances of capturing a slice of South-east Asia’s projected $1tn AI opportunity by 2030

Tech giant Microsoft has unveiled plans to invest $2.2bn in cloud infrastructure in Malaysia that will help accelerate the nation’s AI transformation over the next four years and better position the ambitious country to capture a significant share of South-east Asia’s AI action. 

The far-reaching initiative, announced during the recent Microsoft Build: AI Day in Kuala Lumpur, aims to position Malaysia as a regional hub for advanced cloud computing and AI technologies. It encompasses digital infrastructure development, extensive AI skills training, strategic government partnerships and support for the country's burgeoning developer community.

“We are committed to supporting Malaysia’s AI transformation and ensuring it benefits all Malaysians,” said Satya Nadella, Microsoft’s chairman and CEO. “Our 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.”

Malaysia’s government recognises the immense potential of this collaboration. “Microsoft’s development of essential cloud and AI infrastructure, together with AI skilling opportunities, will significantly enhance Malaysia’s digital capacity and further elevate our position in the global tech landscape,” stated YB Senator Tengku Datuk Seri Utama Zafrul Abdul Aziz, Malaysia’s minister of investment, trade and industry.

The stakes are high: If research findings published several years ago by management consulting firm Kearney hold up, AI could contribute nearly $1tn to South-east Asia’s GDP by 2030, with Malaysia poised to capture $115bn of this windfall. To help achieve this potential, Microsoft plans to provide AI skills training to an additional 200,000 Malaysians by 2025.

Microsoft will also partner closely with the Malaysian government on key initiatives. These include establishing a national AI centre of excellence to drive adoption across industries, pioneering AI use in the public sector, and collaborating with the National Cyber Security Agency of Malaysia to bolster the nation’s cyber defences.

For Malaysia’s developers, who are rapidly embracing platforms like GitHub, Microsoft has launched AI Odyssey, an initiative expected to create 2,000 new AI subject matter experts. Local organisations, such as Agroz, Doctor2U, Pandai, Petronas, PR1MA and Prudential, are already leveraging Microsoft’s AI tools to transform their operations and enhance service delivery.

“With rising demand for cloud and AI, Microsoft’s investment announced today underscores our commitment to building a robust digital ecosystem in the country,” stated Laurence Si, managing director of Microsoft Malaysia.

Microsoft is not alone in pumping significant funds into Malaysia’s digital infrastructure: Amazon Web Services (AWS) last year unveiled plans to invest at least 25.5bn Malaysian ringgit ($5.4bn) by 2037 in a new AWS region in Malaysia and stated last November that the region will go live in 2024; and Google Cloud is set to add Malaysia to its growing list of “regions” in the near future. In addition, Alibaba has long had a datacentre presence in Malaysia, while Telekom Malaysia is reportedly planning to build a new hyperscale datacentre in the country. 

- Joana Bagano, Contributing Editor, TelecomTV