KUALA LUMPUR (Reuters) – Microsoft Corporation will invest $1 billion over the next five years in Malaysia as part of a new partnership program with government agencies and local companies, the Southeast Asian nation’s prime minister said on Monday.
The announcement on what would be the US tech giant’s biggest investment in Malaysia comes after the country in February gave conditional approvals for Microsoft, Google, Amazon and state telecoms firm Telekom Malaysia to build and manage hyper-scale data centres and provide cloud services.
It also comes after the country saw foreign direct investments (FDI) plunge by 68% last year, the biggest decline in Southeast Asia.
Malaysia has defended itself as an investment destination, with the finance minister recently saying it was looking at incentives to help attract more FDI.
It has said the investments from these cloud service providers will total between 12 billion ringgit and 15 billion ringgit ($2.91 billion-$3.64 billion) over the next five years.
As part of the Bersama Malaysia initiative, Microsoft will establish its first “datacentre region”, which consists of multiple data centres, in Malaysia to manage data from various countries, Prime Minister Muhyiddin Yassin told an event marking the launch of the program.
The announcement represents a significant milestone in Microsoft’s 28-year history in the country and supports the Government of Malaysia’s MyDIGITAL goals to transform the country into a regional leader in the digital economy. According to IDC’s research, Microsoft’s investment in Malaysia will help generate up to $4.6 billion in new revenues for the country’s ecosystem of local partners and cloud-consuming customers over the next four years. Additionally, the research estimates Microsoft, its partners, and cloud-using customers will together contribute more than 19,000 new direct and indirect jobs.
“The upcoming datacentre region will be a game-changer for Malaysia,” Microsoft Executive Vice President Jean-Philippe Courtois said in a statement, adding it will enable the government and businesses to “transform” their operations.
Under the program, Microsoft will also assist up to a million Malaysians in getting digital skills by the end of 2023.
($1 = 4.1260 ringgit)
(Reporting by Liz Lee; Editing by Muralikumar Anantharaman)