Key Takeaways
Since April, Microsoft has committed to spending at least $6.8 billion to expand its cloud business in Asia.
The Big Tech firm’s growth in the region comes as investors are circling Asian data center operators, which are benefiting from rising demand for cloud and AI services.
In 2023, mergers and acquisitions in the Asia-Pacific data center space hit a record high of $3.45 billion. The biggest deal of the year was Bain Capital’s $3.16 billion agreement to take Chindata private.
But, 2024 could top last year’s total. With deals worth $840.47 million closed so far, several massive acquisitions are rumored to be in the works.
Recent reports suggest Japan’s NEC is considering selling its data centers in the country for between $400 and $500 million.
Meanwhile, the state-owned Telkom Indonesia could reportedly offload its data center business for more than a billion dollars in the coming months.
However, the most valuable deal in the pipeline belongs to AirTrunk. The Australian firm operates some of the largest data centers in the region and its current owners aim to value the business at up to $9.8 billion .
As international investors focus their attention on regional operators, major cloud providers like Microsoft are also building new APAC infrastructure.
At present, Microsoft’s Asian data centers can be found in Japan, Korea, Singapore, India, Hong Kong and mainland China. But it has plans to significantly bulk out its operations in the region.
Last month, the company committed to spending $2.9 billion on new cloud and AI infrastructure in Japan, a further $1.7 billion in Indonesia and $2.2 billion to launch a new Azure region in Malaysia.
In total, Microsoft has committed to spending at least $6.8 billion in the Asia Pacific region over the next few years.
The majority of this will go toward building new data centers and upgrading existing ones. But the company is also investing in AI training programs to upskill local workforces.
In statements announcing its Asian investments, Microsoft has emphasized the concurrent employment benefits it will create.
To coincide with its Southeast Asian infrastructure projects, the firm said it will create “AI skilling opportunities” for 2.5 million people in the region by partnering with local education providers.
Many of these initiatives will be directed at Indonesia, Malaysia and Thailand. But other countries that aren’t yet recipients of Microsoft’s infrastructure investments will also benefit.
Compared to some of their neighbors, countries like Vietnam and the Philippines have some way to go before AI has any considerable impact on their economies. But Microsoft is already preparing for the day when demand for AI cloud services in those countries will also require massive infrastructure investments.