Google will invest $2 billion in Malaysia to open its first data center, the government announced on Thursday, making it the latest tech giant to pour money into the region in search of growth opportunities.
The government said the funding would support 26,500 Malaysian jobs across a range of sectors including healthcare, education and finance, and comes days after Prime Minister Anwar Ibrahim targeted investment of at least $107 billion in the semiconductor industry.
In April, Anwar said he planned to build Southeast Asia's largest integrated circuit design park, offering incentives such as tax breaks and subsidies to attract global tech companies and investors.
Ruth Porat, president and chief investment officer of Google and its parent company Alphabet, said: “Google's first data centre and Google Cloud region marks our largest investment plan to date in Malaysia, where Google has been a proud home for 13 years.”
“This investment builds on our partnership with the Malaysian government to advance their 'Cloud First' policy, which includes best-in-class cybersecurity standards.”
Minister of Investment, Trade and Industry Tunku Zahur Abdul Aziz said the funding would “greatly advance” Malaysia's digital ambitions outlined in the 2030 Master Plan.
He added that data centres and cloud regions “will enable our manufacturing and services industries to leverage artificial intelligence (AI) and other advanced technologies to move up the global value chain.”
Microsoft announced earlier this month that it would spend $2.2 billion on AI and cloud computing in Malaysia, and CEO Satya Nadella pledged to invest billions of dollars in Thailand and Indonesia during a tour of the region.
Amazon also announced that it will invest $9 billion over the next four years to expand its cloud computing capabilities in Singapore.
The facility announced on Thursday will be located in a business park west of the capital, Kuala Lumpur, and will power Google's popular digital services including search, maps and workspaces.
“Once operational, Malaysia will join 11 countries where Google has built and currently operates data centres to serve users around the world,” the statement said.
The company added that the Google Cloud region will “provide high-performance, low-latency cloud infrastructure, analytics, and AI services to large enterprises, startups, and public sector organizations.”
Malaysia, a major player in the semiconductor industry for decades, is estimated to account for about 13 percent of global back-end manufacturing, according to German tech giant Bosch.
According to a study by global consulting firm Kearney, AI is expected to contribute $1 trillion to Southeast Asia's gross domestic product by 2030, with more than a tenth of that predicted to be contributed by Malaysia.
“Many large US tech companies are now diversifying their investment risks away from China and Malaysia, with its traditional involvement in the tech industry, is well placed to welcome them to relocate their operations,” said Oh Aye San, an analyst at the Malaysian Pacific Studies Centre.
JSM/MBA/Dan
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