Big tech companies continue to invest heavily in Southeast Asia, with Malaysia landing a multi-billion-dollar investment from Google just weeks after Microsoft pledged to invest $2.2 billion in the country's tech sector.
Google on Thursday committed to investing $2 billion in Malaysia, including developing data centers and cloud facilities. The investment is Google's largest to date in Malaysia and is expected to support 26,500 jobs and generate $3.2 billion in benefits for the economy, according to Malaysian state news agency Bernama.
Google's investment follows a similar pledge made by rival Microsoft earlier this month. During a visit to the Malaysian capital, Kuala Lumpur, Microsoft CEO Satya Nadella pledged to spend $2.2 billion in the Southeast Asian nation, including training 200,000 Malaysians in AI skills and setting up a national AI “center of excellence.”
The Malaysian government is introducing tax incentives for technology-related investments, including data centers, from 2022 onwards. The country also features cheaper land, electricity and water compared to neighbouring Singapore. Companies are increasingly considering Malaysia as an option for data center investment after Singapore, a regional data hub, imposed a three-year moratorium on new developments from 2019 to 2022, citing concerns over the energy and land needed for digital infrastructure.
Malaysia is also seeking to move up the semiconductor value chain, with Prime Minister Anwar Ibrahim stressing the country's “neutral and non-aligned” position between the United States and China this week.
Southeast Asia's technology investment wave
Big U.S. technology companies are stepping up investments in Southeast Asia to take advantage of the region's young workforce, rising incomes and more neutral geopolitical position.
In addition to investing $2.2 billion in Malaysia, Microsoft is also investing $1.7 billion in Indonesia over the next four years to build new cloud and AI infrastructure, and has also pledged to make “significant efforts” in Thailand's cloud and AI industries.
Amazon will invest about $9 billion over the next five years to grow Singapore's cloud infrastructure sector.
Apple CEO Tim Cook also visited the region earlier this year, after the company pledged to boost spending with Vietnamese suppliers and pledged to invest $250 million in expanding its Singapore operations. Analysts suggested Cook's visit was an attempt to “hedge.” [Apple’s] Making “supply chain bets” and paving the way for future investment potential in fast-growing regions.
More broadly, tech companies and manufacturers are shifting their supply chains to the region amid increasingly unstable U.S.-China relations, with chipmakers including Intel, Infineon, GlobalFoundries and Samsung recently pledging investments to Southeast Asian countries such as Malaysia, Singapore and Vietnam.
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