By Kimberley Kao


Microsoft will invest $1.7 billion in cloud and artificial-intelligence infrastructure in Indonesia over the next four years, ahead of an expected boom in demand for AI computing in the world's fourth most populous country.

The U.S. tech giant said Tuesday after a meeting between Chief Executive Satya Nadella and Indonesian President Joko Widodo that the investment will build on plans to build the company's first data center region in Indonesia and mark its single biggest investment in Southeast Asia's largest economy.

Microsoft said the investment would help meet growing demand for cloud computing services in Indonesia and help its goal of training 2.5 million people across the region in AI skills.

The company said more than 3.1 million developers in Indonesia use GitHub, its software development and collaboration platform, making the country its biggest user base in the Asia Pacific after India and China. The number of public generative AI projects on the platform in Indonesia tripled in 2023, it said.

Microsoft, which competes in the cloud and data center space in fast-growing Southeast Asia with the likes of Alphabet, Amazon and Alibaba, has been ramping up its cloud services amid an expected boom in AI computing demand. The company said last week that its Azure cloud business grew 31% on year in the first quarter, with 7 percentage points of the growth coming from its AI services, helping to fuel 17% growth in the company's topline.

Spending on data centers and other infrastructure to host rising demand took the company's capital expenditures to $14 billion in the first quarter, up from $11.5 billion in the preceding quarter. Microsoft's cloud business hosts ChatGPT, software made by startups like Mistral and Cohere, and models made by tech giants including Meta.

Nadella is currently on the first leg of a trip to Southeast Asia, and is scheduled to meet with the leaders of Malaysia and Thailand in the coming days.


Write to Kimberley Kao at kimberley.kao@wsj.com


(END) Dow Jones Newswires

04-30-24 0053ET