US$1.7b in Indonesia, Azure data centre in Thailand, US$2.2b in Malaysia: All eyes on spillover effect as Microsoft goes big in SEA

Satya Nadella certainly knows how to make an impression. The Microsoft chairman and chief executive officer was treated like a rock star as he made pit stops in Jakarta (April 30), Bangkok (May 1), and Kuala Lumpur (May 2), in three days.

He was met by the leaders of all three countries. On Tuesday, he joined Indonesia’s outgoing president Joko Widodo, and the latter’s Cabinet ministers as they discussed joint artificial intelligence (AI) research and talent development. Later, Nadella announced a US$1.7 billion investment in the Republic.

Some 24 hours later, Nadella was in Bangkok, shaking hands with Thailand’s Prime Minister Srettha Thavisin at the ‘Microsoft Build AI Day’ event at the Queen Sirikit National Convention Centre in Bangkok. There, Nadella said his company will invest in AI infrastructure and set up its first Azure data centre in the country. This, Nadella said, was part of Microsoft’s expansion plans in Southeast Asia.

On May 2, Nadella met Malaysian Prime Minister Datuk Seri Anwar Ibrahim and a retinue of ministers and ranking government officials. The Microsoft chief continued playing Santa, announcing a whopping US$2.2 billion investment in Malaysia.

That even got Anwar sending Nadella off to his car (image above) – some describing the image as ‘investor friendly’, while his political critics said it reeked of desperation.

Microsoft announced nearly US$10 billion in investments in AI abroad in recent months, eager to dominate the market. This will certainly get Google, Meta and even Amazon following suit.

The latest series of investments is set to trigger a healthy competitive environment, specifically in the AI sphere, in the region. The Asian Development Bank, exactly a month ago, said foreign direct investments (FDI) in Southeast Asian nations reached a record high of US$224 billion in 2022, up 5.5 per cent from the previous year. The resilience of FDI flows to the region is in part due to the reshaping of global supply chains and the greening of emerging markets.

It added that the major factors behind the uptrend in Southeast Asia included “opportunities from regional integration, which is driving economic and industrial growth; improving investment policy environment; and business expansion across the region”.

“Malaysia, Singapore, and Vietnam posted record highs in FDI in 2022. Growth in Inflows to Cambodia and Indonesia was flat but investments were still high. Singapore led in FDI with US$141 billion, up 10 per cent, while Malaysia saw the highest growth at 39 per cent to US$17 billion.”

These nations are also eager to be known as the region’s digital hub. While Singapore has established itself in the start-up and digital arenas, its neighbours are aggressively playing catch-up. After losing out on golden opportunities and bragging rights over entities such as Grab and Carsome – Malaysian companies that are now backed by Singapore’s Temasek Holdings – the Malaysian government is eager to embrace technology and the digital economy. This even led to the creation of a Digital Ministry last December.

There have been numerous partnerships and initiatives to get the ball rolling. This morning, Digital Nasional Bhd, together with its technology partner Ericsson Malaysia, exchanged a series of Memoranda of Understanding with several multinationals to firm up partnerships that will help upskill workers and create new opportunities. DNB last week, organised a workshop in Penang that presented use case demonstrations regarding the use of 5G and AI technologies for those in the manufacturing sector.

While the numbers seem impressive, the task now is for governments across the region to explain the importance of AI for enterprises and corporations, moving forward. In a region where almost everyone is on a mobile phone or connected digitally, such investments will see local companies, and their workforce, embrace new and effective methods to conduct their businesses. Upskilling will also be key in ensuring the region’s workforce fully understands AI while keeping abreast with the rapid evolution of technology. Its citizens are also eager to know of the spillover effect of such investments.

Even before the announcements, there were several Microsoft job openings in Malaysia advertised on LinkedIn – from Portfolio Manager (Asean and Great China) based in Kuala Lumpur, to Test Engineer based in Gelugor, Penang. The same for Thailand and Indonesia. Many are looking forward to more job opportunities by the company, and its vendors, in weeks and months to come.

Stakeholders from various industries will also be eager to know how can they benefit from such investments, locally and regionally.

There will be AI threats. But as Associate Professor Dr Siti Hajar Halili, the head of department of Curriculum and Instructional Technology, Faculty of Education, Universiti Malaya, in her article in Twentytwo13 published this morning wrote, steps must be taken to enhance global coordination in the formulation of regulations and guidelines on AI, as well as the establishment of clear and consistent ethical principles. This, she added, will create a robust framework for effectively and responsibly overseeing and controlling the development and use of AI.

“This will not only help to reduce the risk of misuse of AI technology but also open up opportunities to harness the positive potential of AI in cultivating society more broadly.”

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