Microsoft Pledges $1.7B Investment In Emerging Asian Powerhouse As Tech Giants Bet Big On AI

Microsoft Corporation MSFT has committed to a $1.7 billion investment in Indonesia’s cloud services and artificial intelligence (AI) over the next four years.

What Happened: Microsoft CEO Satya Nadella announced the investment during his visit to Jakarta, Reuters reported on Tuesday. The funds will be utilized to expand cloud services, AI, and build data centres in the country. This announcement comes as the first stop of Nadella’s Southeast Asian tour aimed at promoting Microsoft’s generative AI technology.

Nadella had discussions with outgoing President Joko Widodo and his cabinet ministers about joint AI research and talent development. Widodo proposed that Microsoft could set up its data centers in Bali or the under-construction capital city, Nusantara.

“We’re going to lead this wave in terms of AI infrastructure that’s needed,” Nadella mentioned.

Microsoft aims to train 2.5 million people in Southeast Asia in AI use by 2025, including 840,000 in Indonesia.

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Why It Matters: Nadella’s visit to Southeast Asia was primarily focused on AI-related discussions with government officials and developers. This investment is a part of Microsoft’s global efforts to support AI development, following recent investments in Japan and the UAE.

Tech giants like Microsoft, Meta Platforms Inc, and Google parent Alphabet Inc, are heavily investing in AI infrastructure in 2024. This investment trend indicates a shift from AI chatbots to the less glamorous, yet critical, "AI plumbing."

Apple CEO Tim Cook also visited Indonesia two weeks ago where he expressed interest in building a manufacturing facility.

Price Action: As per Benzinga Pro, Microsoft shares closed at $402.25 on Monday, with an after-hours price of $402.05. The company’s 52-week high is $430.82 and its 52-week low is $303.31.

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