Microsoft Urges to Invest $1.7 Billion to Develop AI, Cloud Infrastructure in Indonesia

By Madz Dizon

Apr 30, 2024 06:49 AM EDT

Microsoft Urges to Invest $1.7 Billion to Develop AI, Cloud Infrastructure in Indonesia
Microsoft CEO Satya Nadella delivers a speech during an event named Microsoft Build AI Day in Jakarta on April 30, 2024.
(Photo : ADEK BERRY/AFP via Getty Images)

Microsoft CEO Satya Nadella announced on Tuesday that the company will invest $1.7 billion over the next four years on new cloud and artificial intelligence infrastructure in Indonesia, the single largest investment in the company's 29-year history there.

Microsoft to Invest in Indonesia

According to Reuters, Microsoft recognizes the potential of Southeast Asia as a burgeoning market and a promising destination for further AI product development. 

The increasing presence of AI in the region is poised to have a profound effect on its economic terrain. 

Based on a study conducted by Kearney, a global consulting firm, it has been projected that by 2030, AI could make a significant contribution of almost $1 trillion to Southeast Asia's GDP. 

Specifically, Indonesia is anticipated to capture a substantial portion of this amount, with an estimated $366 billion.

According to Nadella, Microsoft will teach 2.5 million people in Southeast Asia to use AI by 2025, with 840,000 in Indonesia.

Microsoft is attempting to broaden its support for AI development overseas, including a $2.9 billion investment in cloud and AI infrastructure in Japan as well as a $1.5 billion investment in G42, an AI firm headquartered in the UAE.

Nadella's visit to Jakarta comes two weeks after Apple Inc's (AAPL.O) CEO Tim Cook met with Widodo and announced plans to develop a manufacturing facility in Indonesia.

Indonesia has a large, tech-savvy population, making the Southeast Asian country an important target market for tech investment.

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Indonesia's Venture to Digital Technology 

Indonesia, led by President Joko Widodo, has placed a strong focus on the growth of digital technology and information sectors. 

This is in line with the government's ambitious Golden Indonesia 2045 Vision, which envisions Indonesia becoming one of the world's top five economies with a staggering GDP of up to $9 trillion.

This vision is set to be realized exactly a century after Indonesia gained independence from Dutch colonizers.

Nadella had a meeting with Widodo at the Presidential Palace on Tuesday. According to Indonesia's Minister of Communication and Information Technology, Budi Arie Setiadi, during the meeting, Widodo put forward the idea of establishing an AI research center in Indonesia, as well as a Microsoft data center in either Bali or Nusantara, the country's new capital city on Borneo island.

The CEO is currently on a regional visit, starting in Indonesia and continuing to Thailand and Malaysia in the next two days, AP News reported.

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