Microsoft will invest $1.7 billion to build cloud computing and artificial intelligence infrastructure in Indonesia, betting it will fuel growth in Southeast Asia's largest economy.
Chief Executive Satya Nadella announced the spending over four years after meeting with President Joko Widodo in Jakarta on Tuesday. The company also pledged to help train 2.5 million people in Southeast Asia in AI skills, including 840,000 in Indonesia.
The Microsoft leader is currently on a tour of three Southeast Asian countries. Once ignored by corporate leaders focused on big economies like China and India, the region has recently become more popular as CEOs jockey for position amid rising geopolitical tensions. This is one of the biggest battlegrounds for Chinese and American tech giants and startups. Nadella was preceded by Nvidia's Jensen Huang and Apple's Tim Cook, who also made high-profile visits to the region in pursuit of tech-savvy young people as China's growth slows.
“The intelligence revolution will be the next big bend in the GDP growth curve,” Nadella told hundreds of attendees, including software developers, ministers and CEOs, at a corporate event in Jakarta. “This will also have a significant impact in Indonesia, with additional growth expected in the region of 10% to 12%.”
AI has been a major topic for Nadella, who travels between countries and conferences from India to the World Economic Forum, talking about its potential to rebuild entire economies while also encouraging countries to invest in technology and train their citizens. We encourage companies to do so. He is scheduled to visit Bangkok and Kuala Lumpur later this week.
Microsoft and rivals such as Alphabet Inc.'s Google and Metaplatforms are locked in a battle for AI supremacy. The Redmond, Washington-based company, the world's most valuable company, has teamed up with OpenAI to challenge Google's 20-year lead in Internet search.
The company is betting on regaining leadership in generative AI technology, and sees Asia as a key market and talent pool. In 2021, the company announced initiatives to promote inclusive economic growth in Indonesia, including the establishment of Indonesia's first data center.
Coordinating Maritime Investment Minister Luhut Pandjaitan said at the event that Indonesia is ready to provide incentives for investments in Microsoft. “Whatever incentives you can get, whether it's India or Thailand or anywhere, we can give you something better,” he said.
Information and Communications Minister Budi Ali Setiadi told reporters that the country is proposing Bali and the new capital, Nusantara, as potential locations for Microsoft's research and data center. The government also announced plans to grant dual citizenship to skilled diasporas as part of efforts to stem the brain drain of local talent.
Microsoft has leveraged its $13 billion investment in OpenAI to develop a suite of AI assistants and other features that are built into products ranging from Windows and Office to search engine Bing, many of which customers use. There is an additional charge to do so. The company is spending heavily to expand its global network of data centers to meet growing demand for its AI services, with capital expenditures reaching $14 billion in the March quarter. Masu.
Mr. Nadella, who took the helm of Microsoft a decade ago, has been vocal about the technology's potential in Southeast Asia. The region is quickly emerging as a competitive battleground and manufacturing hub for U.S. companies seeking alternatives to China, which is struggling with increasing U.S. restrictions on high-tech exports.
During a visit to India in February, Nadella urged countries to invest aggressively in technology and pledged to train 2 million people in his country in AI skills. Microsoft opened its first data center in Malaysia about three years ago.
