Microsoft announces $1.7 billion investment in Indonesia’s cloud services and AI

The investment will include the construction of data centres and aims to bring advanced AI infrastructure to the country.

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Microsoft’s CEO Satya Nadella has announced an investment of $1.7 billion over the next four years in expanding cloud services and AI infrastructure in Indonesia. The plan includes building data centres, with Jakarta being Nadella’s first stop on a trip across Southeast Asian countries to promote Microsoft’s generative AI technology. Later this week, he will visit Malaysia and Thailand within this initiative.

Nadella highlighted that the investment aims to bring cutting-edge AI infrastructure to Indonesia, positioning Microsoft to lead in meeting the region’s AI infrastructure needs. During his visit, Nadella met with outgoing president Joko Widodo and cabinet ministers to discuss joint AI research and talent development. Communications Minister Budi Arie Setiadi revealed that Widodo proposed Microsoft to establish its data centres on the island of Bali or in the new capital city of Nusantara, currently under construction in Borneo’s jungle.

In addition to infrastructure development, Microsoft plans to train 2.5 million people in Southeast Asia in AI by 2025, with 840,000 individuals targeted in Indonesia alone. The feat underscores Microsoft’s global strategy to support AI development, as seen in previous investments such as $2.9 billion in cloud and AI infrastructure in Japan and $1.5 billion in AI firm G42 based in UAE.

Why does it matter?

Nadella’s visit to Jakarta follows Apple Inc. CEO Tim Cook’s recent meeting with President Widodo, during which Cook expressed interest in exploring the possibility of establishing a manufacturing facility in Indonesia. With its large and tech-savvy population, Indonesia is a fruitful market for tech-related investments. Microsoft’s proactive approach aligns with its recent financial success, partly driven by integrating AI across its cloud services, as demonstrated by its beating of Wall Street estimates for third-quarter revenue and profit.