Southeast Asia is rapidly emerging as an attractive destination for the technology industry. Recently, the CEOs of “giants” Apple, Microsoft and Nvidia … have all visited Southeast Asia and committed to investing billions of dollars.
An activity by Apple CEO Tim Cook in Indonesia last April.
Amazon this month unveiled its $9 billion investment plan to thousands of people in a giant auditorium in central Singapore. In April, Apple CEO Tim Cook toured Southeast Asia, visiting Vietnam, Indonesia and Singapore.
Notably, Microsoft CEO Satya Nadella announced major commitments to build a new regional data center in Thailand on May 1. In addition, Nadella revealed that Microsoft will invest $1.7 billion in Indonesia over the next four years to build cloud computing and AI infrastructure.
Bloomberg (USA) assessed that after decades of being second only to China and Japan, the Association of Southeast Asian Nations (ASEAN) with about 675 million people is attracting more technology investment than ever. Typically, for data centers alone, many of the world's largest corporations are expected to invest up to 60 billion USD in the next few years.
Southeast Asia is poised to see more Western investment in technology as China becomes more aggressive with U.S. companies. Silicon Valley is eyeing countries with business-friendly governments, rapidly growing talent pools, and rising incomes. The advent of AI is helping tech leaders pursue new sources of growth, building the digital infrastructure of Southeast Asia’s future.
Thai Prime Minister Srettha Thavisin (center) with Microsoft CEO Satya Nadella (left) and Microsoft Asia President Ahmed Mazhari.
Mr. Sean Lim at NWD Holdings (Singapore) analyzed: "Countries like Singapore and Malaysia have largely remained neutral in the face of geopolitical tensions with China, the US, Ukraine and Russia."
Southeast Asia’s growing workforce is making it a viable alternative to China, with major tech companies looking to the region as a talent hub to support their global operations.
As Southeast Asian governments push to upgrade education and infrastructure, the region is becoming an attractive base for everything from manufacturing and data centers to research and design. “Southeast Asian governments are investing across borders in a professional manner and have a strong talent pool,” says Sean Lim.
Southeast Asia is also becoming a major market for online devices and services. Southeast Asia’s young population is embracing video streaming, online shopping and artificial intelligence (AI). The Singapore government estimates that about 65% of Southeast Asia’s population will be middle class by 2030, with growing purchasing power. That will help double the region’s internet-based services market to $600 billion.
Faced with great potential, Apple is opening more stores in Southeast Asia. CEO Cook recently shared: “These are markets where our market share is low. The population is large and growing. And our products are really making a lot of progress.”
Southeast Asia’s appeal is clear as Silicon Valley struggles to lay the groundwork for AI, which is set to become an industry-defining technology. In the coming weeks, two major AI-themed events in Singapore will feature top leaders from OpenAI, Anthropic, Microsoft and others to further promote the technology’s potential for Southeast Asia.
Prime Minister Pham Minh Chinh with NVIDIA CEO Jensen Huang.
Accelerating AI adoption in Southeast Asia could inject an additional $1 trillion into the region’s economy by 2030, according to a report by consulting firm Kearney. That means more data centers are needed to store and process the massive amounts of information being transmitted between content creators, companies, and customers.
Data center demand in Southeast Asia and North Asia is expected to grow about 25% annually through 2028, according to Cushman & Wakefield data. The figure is 14% in the US.
Hotspots include the southern Malaysian region of Johor Bahru, where Nvidia has partnered with a local company to plan a $4.3 billion AI data center in 2023.
Nvidia is also eyeing Vietnam, which CEO Jensen Huang sees as a potential “second home” for the company. Nvidia sees Hanoi, Ho Chi Minh City, and Da Nang as potential locations for investment. Keith Strier, Nvidia’s vice president of global AI initiatives, toured the cities last month.
Southeast Asia is not the easiest market for global companies to operate in, according to Sean Lim. Risks include difficulty adjusting to local work cultures and fluctuations in different currencies. But for now, big tech companies are taking advantage of Southeast Asia’s advantages, such as a highly skilled and relatively low-cost workforce.
Most companies have announced training programs with local governments, with Microsoft revealing on April 30 its plan to provide AI skills training opportunities to 2.5 million people in ASEAN countries by 2025.
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