Microsoft's Malaysia cloud region and ecosystem to deliver US$10.9bil economic impact, 37k jobs with 5.7k being IT jobs

• Three data centres to go live simultaneously in Greater KL region by Q2 2025
• US$1.84bil impact generated directly from operations of cloud region over four years 

Ten months after Microsoft Chairman and CEO Satya Nadella announced during his visit to Kuala Lumpur, a US$2.2 billion (RM9.71 billion) cloud and AI infrastructure investment in Malaysia, Microsoft shared key details of the investment’s impact, now called Malaysia West cloud region, which it touts as primed to generate substantial economic benefits when it goes live in Q2 2025. The cloud region is Microsoft's first in the country.

“Through Microsoft, our partners and customers, US$10.9 billion (US$48.2 billion) in economic impact will be generated along with the creation of 37,575 jobs over the next four years out of which 5,700 will be skilled IT jobs,” said Laurence Si, Managing Director of Microsoft Malaysia.

One of the key components of the investment is the establishment of the Malaysia West Cloud Region, where three data centres will go live simultaneous sometime in Q2 2025 located in the Greater Kuala Lumpur Area. At least one of the three data centres will be a new facilty in Cyberjaya where construction is nearing completion. Microsoft said it was unable to comment on whether any of the three data centres will be from a co-located facility. It should be noted that Microsoft is currently operating a date centre in Cyberjaya in a co-location facility owned by Bridge Data Centres, a subsidiary of Chindata Group which is Nasdaq listed and Singapore headquartered. In 2017 Bridge Data Centres acquired the operations of Malaysian data centre company, CSF Group, which ran two data centres in Cyberjaya. Bridge is in the process of building a third data centre in Cyberjaya.

Out of the US$10.9 billion economic impact, 16.9% or US$1.84 billion (RM8.13 billion) will be generated directed from the operations of the Malaysia West cloud region over four years. US$9.16 billion will come from Microsoft, its  partners, and customers. Essentially this comes from the multiplier effect of revenue generated from Microsoft's technology being used by business, ex either productivity tools like M365 or cloud technologies to help build apps for customers.)

These projections come from the IDC "Microsoft Cloud Dividend Snapshot" for Malaysia, commissioned by Microsoft, which underscores the substantial benefits of the upcoming cloud infrastructure investment. 

The sharing of the economic impact for Malaysia came on the same day that Microsoft Indonesia shared the economic impact of the cloud region it is opening there by Q2 2025 where it projects to create US$15.2 billion in economic impact with the clound region contributing directly to US$2.5 billion or 16.5% of the total $15.2 billion. 

Laurence explained, "Different markets have different structures and how they invest as well. We are equally focused on making sure that we're making the right investment in this region, with Malaysia being one of them."

Building an AI-ready workforce

Microsoft’s investment goes beyond infrastructure. It has committed to equipping 2.5 million people in ASEAN with AI skills by 2025, aligning with the ASEAN Digital Masterplan 2025 and focusing on building an inclusive, AI-ready workforce.

"We recognize that to execute such a goal, we need to work with the whole spectrum of different partners in the country, government agencies, NGOs, and academics," Si said.

In December 2024, Microsoft introduced the "AI for Malaysia's Future" (AIForMYFuture) initiative, which aims to equip 800,000 Malaysians with AI skills by the end of 2025. This initiative builds on Microsoft's prior work in providing digital skills to Malaysians as part of the Bersama Malaysia initiative. It claims to have trained more than 1.53 million people.

The AI training aligns with increasing AI adoption across the country. According to Microsoft's 2024 Work Trend Index, 84% of Malaysians are already using AI at work.

What This means for Malaysian businesses

The Malaysia West cloud region aims to provide infrastructure for data residency, compliance with local regulations, and potentially improved performance for Malaysian organizations. Microsoft claims this will meet the needs of both public and private sector entities looking to accelerate their digital transformation, though the actual impact on Malaysia's digital ecosystem will only be measurable once the facilities are operational. 

"As Microsoft commits to transforming Malaysia's cloud and AI infrastructure, the upcoming Malaysia West cloud region will enable Malaysian companies to scale their innovation in a more seamless way, while offering global businesses a gateway into Malaysia with integrated technological readiness," said Dr Andrew Lau, Director of Strategic Programs for Microsoft Malaysia. 

"We are optimistic that the new cloud region will enhance the country's global competitiveness in a rapidly evolving digital landscape, propelling Malaysia to be at the forefront of an AI-powered future."

Industry analysts note that while local cloud infrastructure typically reduces latency issues, organizations will still need to evaluate whether Microsoft's offerings align with their specific technical requirements and cost considerations compared to existing alternatives.

Dashveenjit Kaur contributed to the article.