Microsoft building

Microsoft pledges $1.7 billion to improve Indonesia’s cloud, AI infrastructure

Tech giant Microsoft (NASDAQ: MSFT) has confirmed plans to invest $1.7 billion to improve the existing infrastructure for artificial intelligence (AI) and cloud capabilities in Indonesia.

In an official announcement, Microsoft disclosed that the investment will be spread over four years and complement Indonesia’s digitization ambitions. The sum, expected to be deployed across several verticals, is Microsoft’s largest investment in the Southeast Asian country in its 29-year history.

A chunk of the investment will be used to equip 840,000 Indonesians with AI skills in the coming years. The nationwide upskilling program will focus on women for gender balance while targeting young persons from underrepresented communities to improve their employability.

“This new generation of AI is reshaping how people live and work everywhere, including in Indonesia,” said Microsoft CEO Satya Nadella. “The investments we are announcing today—spanning digital infrastructure, skilling, and support for developers—will help Indonesia thrive in this new era.”

The upskilling efforts aim to transform 10,000 local developers into “AI subject matter experts” with accreditation from Microsoft. The drive will provide talent for local firms and global AI service providers seeking to set up shop in the country.

Outside upskilling, a significant portion of the funds will be put toward building new data centers for the Southeast Asian country to improve existing cloud and AI capabilities. The injection of fresh capital follows Microsoft’s 2021 Empower Indonesia initiative that birthed the country’s first data center in the region.

“Indonesia’s collaboration with Microsoft on AI perfectly aligns with our ambition for a future driven by digital innovation,” said Indonesia’s IT Minister Budi Arie Setiadi. “I am confident this partnership will open up new horizons for Indonesia, positioning us not only as consumers of technology but as pivotal contributors to the global technological supply chain.”

At the moment, several large enterprises in Indonesia are embracing Microsoft’s AI offerings to improve their productivity and efficiency. 128-year-old Bank Rakyat Indonesia (BRI), mining firm BUMA, and Universitas Terbuka have integrated Copilot and other generative AI offerings into their existing processes.

No sign of slowing down

Strong Q1 earnings indicate that Microsoft may continue its investment drive as it seeks to pull away from the rest of the competition for emerging technologies. The U.S.-based tech giant has unveiled similar investments in the U.K. and Australia while inking partnership deals with Coca-Cola (NASDAQ: KO), KPMG, and Vodafone (NASDAQ: VOD).

To keep pace with innovation, Microsoft is bolstering its staff strength with a wave of high-profile hires from competing firms in a strong show of intent. Despite the searing pace, there are fears that Microsoft could face strong regulatory headwinds over its partnership with OpenAI by anticompetition authorities.

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