Microsoft CEO Satya Nadella recently concluded his Southeast Asia tour, during which he visited Indonesia, Thailand, and Malaysia, and met with government leaders. From Nadella's itinerary and Microsoft's announcements, it can be observed that Microsoft is bullish on the development potential of AI in Southeast Asia and is accelerating local data center infrastructure construction and digital talent cultivation.
Data Center Construction
Microsoft has pledged to build data centers in Indonesia and Thailand. In particular, President Joko Widodo of Indonesia suggested that the data center could be located in the tourist destination of Bali or Nusantara, the "future capital" set to be inaugurated in August 2024.
Back in 2021, Microsoft announced plans to establish a data center in the Greater Kuala Lumpur area. This time, it has announced further investment in local AI and cloud infrastructure, claiming it the "largest scale in 32 years."
Photo: Microsoft CEO Satya Nadella and Prime Minister of Malaysia Anwar Ibrahim.
Credit: Microsoft
Bloomberg pointed out that Southeast Asia, with its population of 650 million, is attracting not only Microsoft but also Google and Amazon, all eyeing the rapidly growing market. With the continuous tensions between China and the US, Malaysia has become one of the hotspots for businesses seeking a "China +1" option, with neighboring Singapore also being highly favored.
At the end of 2023, Malaysia's YTL Group also announced a partnership with Nvidia to establish an AI data center in Johor Bahru, located adjacent to Singapore.
Training developers and "people who know how to use AI"
Microsoft's goal is to train 2.5 million people with AI utilization skills in the SEA region by 2025, with targets of 840,000, 100,000, and 200,000 for Indonesia, Thailand, and Malaysia respectively. The populations of these three countries are approximately 270 million, 72 million, and 34 million respectively.
Citing data from research firm Kearney, Microsoft stated that by 2030, AI's GDP contribution to Southeast Asia will reach US$1 trillion, with US$366 billion expected for Indonesia, US$117 billion for Thailand, and US$115 billion for Malaysia.
Microsoft also aims to cultivate more AI-related developers in Southeast Asia. As digital services in Southeast Asia are on the rise, Microsoft and Apple operate their platforms and naturally hope to attract more developers to join their ecosystems. They also want to make AI tools more familiar to both corporations and general consumers.
Microsoft pointed out that in 2023, the number of GitHub developers in Malaysia grew to 68,000, a 28% year-on-year increase; Thailand exceeded 90,000, a 24% year-on-year increase; and Indonesia reached 3.1 million, becoming the largest developer community, behind only India and China.
Photo: Satya Nadella and president of Indonesia Joko Widodo (Jokowi).
Credit: Microsoft
Meeting national leaders
During this trip, Nadella met with Indonesian President Joko Widodo, Thai Prime Minister Srettha Thavisin, and Malaysian Prime Minister Anwar Ibrahim. Microsoft also aligned itself with each country's digital or AI development policies.
The Indonesian government has introduced the "Golden Indonesia 2045 Vision," while Thailand has the "Ignite Thailand 2030" initiative. Both aim to strengthen digital talent development and establish themselves as digital centers in their respective regions.
Thailand, renowned for its tourism industry, has also set a goal to increase the tourism sector's GDP contribution to 25% of the national GDP. Therefore, tourism and labor-related government departments in Thailand were some of the first to partner with Microsoft, hoping to leverage AI to upgrade the tourism industry.
In Malaysia, Microsoft has pledged to collaborate with the National Cyber Security Agency (NACSA) to enhance cybersecurity.
Photo: Satya Nadella and Prime Minister of Thailand Srettha Thavisin.
Credit: Microsoft
Southeast Asia and India emerging as new battlegrounds for digital economy
Apple CEO Tim Cook just finished his Southeast Asia tour and was followed almost immediately by Nadella's visit. At the end of 2023, Nvidia CEO Jensen Huang also visited Southeast Asia. While each company targets different market demands, it is clear that Southeast Asia has become a fiercely contested region. Not only is it crucial for supply chains to have a "China +1" strategy, but the growth potential of the digital economy in Southeast Asia also cannot be underestimated.
Besides the Southeast Asian market, Nadella visited India in February 2024, acknowledging the market's development potential and rich talent resources. OpenAI also welcomed its "first employee" in India in April, responsible for negotiating with government agencies.
Meanwhile, Google is undergoing organizational restructuring. While downsizing in some areas, it is shifting job openings to countries like India and South America, claiming to get "closer to users" and seizing "rapidly growing markets."
