If proof were needed that the tech giants see their artificial intelligence (AI) products and services as the key to their future growth globally, look no further than the tour of Southeast Asia by Microsoft CEO Satya Nadella in early May, during which he met national leaders and announced billions of dollars of investment.
The focus was mainly on Indonesia, Malaysia and Thailand – all countries that have developed into manufacturing and services hubs for high-tech industries over recent decades, and which now have ambitious plans to maintain their edge by embracing AI-driven technology.
It’s not hard to see why: AI could contribute nearly $1trn to Southeast Asia’s gross domestic product by 2030, according to 2020 research by consultancy Kearney,
In Indonesia, Microsoft plans to invest $1.7bn over the next four years into the development of AI and cloud services, along with the construction of data centres. In Malaysia, the figure for similar investments is $2.2bn over the same timeframe. Nadella said it would also open its first regional data centre in Thailand.
Training is another key component of Microsoft’s drive in the region. The company plans to provide AI training for 2.5 million people across Southeast Asia by 2025.
“Investing in AI skills is investing in a future where economic growth is inclusive, giving every person a chance to contribute and benefit. With a robust pool of talent skilled in disruptive technologies, ASEAN is well positioned for the global tech race,” Andrea Della Mattea, President of ASEAN at Microsoft, said. ASEAN is the political and economic union of 10 states in Southeast Asia.
From agriculture to energy
The use of AI across all economic sectors is being targeted, from the use of generative AI to provide information needed by farmers to improve crop productivity, to the faster recall of healthcare records and the provision of academic support for students. The energy sector will be another beneficiary of this injection of technology and upskilling into the region. Malaysia’s state energy company Petronas is already using Microsoft AI products to improve productivity and provide a platform for creative thinking, Microsoft noted.
These investments are part of a wider push by Microsoft to establish the company’s credentials as a global leader in AI and cloud-based services. In April, the firm announced a $2.9bn investment in ‘hyperscale’ cloud computing and AI infrastructure in Japan over the next two years and plans to expand its training programmes in the country to provide AI skilling to more than 3m people over the next three years. Microsoft is also increasing its cybersecurity collaboration with the Japanese government.
The company also said in April it would invest $1.5bn in G42, an artificial intelligence company based in the United Arab Emirates. The deal would give Microsoft a seat on the G42 board and enable G42 to run its AI applications use Microsoft cloud services. That investment underscores the efforts being put into the development of AI tech by Gulf countries, notably Saudi Arabia and the United Arab Emirates.
Funding hotspot
Microsoft is not the only company wooing – and being wooed by – Southeast Asian governments. The company’s spending spree is driven by intense competition among tech companies to become better established in the region.
Shortly after the visit to the region by Microsoft’s Nadella, Amazon said it planned to invest almost $9bn to expand its cloud computing infrastructure in Singapore over the next four years. The company said this would bring its total planned investment into its existing cloud infrastructure in the region to over $16.9bn by 2028.
Priscilla Chong, country manager for Amazon Web Services said the company was “doubling down” on its cloud infrastructure investments in Singapore to support customer demand and reinforce Singapore’s status as a regional launchpad for innovation. The company has also announced investments of $5 billion and $6 billion investments in Thailand and Malaysia, respectively.
Meanwhile, Apple CEO Tim Cook has also toured Indonesia, Singapore and Vietnam recently. The ambitions of regional governments to boost tech manufacturing are attractive to Apple, which is seeking to reduce its dependency on China as a manufacturing base. Apple is also investing more than $250 million to expand its Ang Mo Kio campus in Singapore.
The tech giants are looking to expand the footprint of their AI-driven operations in an already tech-savvy region and Southeast Asian states are eager to attract investment. Regional observers say it looks like a good match.
(Photo: Petronas Towers in Kuala Lumpur/Shutterstock)
