Microsoft CEO pledges $1.7b AI, cloud investment in Indonesia

Indonesia is Southeast Asia's biggest economy and has a population of around 280 million across its sprawling archipelago, with a growing demand for data centres and AI tech in the region. 

Satya Nadella held talks with President Joko Widodo, popularly known as Jokowi, at Jakarta's presidential palace before delivering a keynote speech about AI in the Indonesian capital. 

"The thing I am really excited to announce today is the expanded announcement of data centre investment, so $1.7 billion to bring the latest and greatest AI infrastructure to Indonesia," Nadella told a crowd, adding data centres would be built in Indonesia soon. 

"We are going to lead this wave in terms of the next generation of AI infrastructure that's needed," he said. 

"Our mission ultimately is to empower every person and every organisation in Indonesia to take advantage of this next big AI wave." 

He said the tech giant would provide AI training for hundreds of thousands of Indonesians. 

"I'm very pleased to announce that we at Microsoft are going to train 2.5 million people by 2025 across the ASEAN region. In fact 840,000 right here in Indonesia alone," he said. 

Microsoft said in a statement the investment would be over four years. Dharma Simorangkir, Microsoft Indonesia's president director, said it "sets a new milestone for Indonesia's digital landscape". 

Regional tour 

Nadella earlier told Jokowi the tech giant's pledge was the "single biggest investment value" in the 29-year history of its business in Indonesia, Minister of Communication and Informatics Budi Arie Setiadi said in a statement. A Microsoft statement later confirmed it was the company's biggest investment in the country. "The investment announced today will enable Microsoft to meet the growing demand for cloud computing services in Indonesia," it said. 

Research by global consulting firm Kearney showed AI was poised to contribute $1 trillion to Southeast Asia's GDP by 2030, with Indonesia predicted to see more than a third of that, the statement said. 

Budi told reporters Jakarta was lobbying Microsoft to open a research and development centre in Indonesia, including in the planned new capital Nusantara that is due to open from August. 

"We offered several places: Bali, IKN [Nusantara]," he said. 

Microsoft has been hugely rewarded by investors since it aggressively pushed into rolling out generative AI, starting with its $13 billion partnership with OpenAI, the creator of ChatGPT, in 2023. 

Nadella said last week sales in the January-to- March period rose by 17 per cent from a year earlier to $61.9 billion, with net profit up 20 per cent to $21.9 billion. 

The embrace of AI has boosted sales of Microsoft's key cloud services such as Azure, which have become the core of its business under Nadella's leadership. 

Nadella's visit comes just weeks after Apple CEO Tim Cook met Jokowi and President-elect Prabowo Subianto as the tech giant explores ways to diversify supply chains away from China. 

Cook said Apple was looking at potentially investing in manufacturing in Indonesia. 

Nadella is travelling on to Thailand and then Malaysia this week on a regional tour to promote Microsoft's AI tech.