Microsoft to invest $1.7 billion in Indonesia to expand cloud infra

Microsoft is planning to invest $1.7 billion in Indonesia to expand its cloud infrastructure in the country, the company said on Tuesday.

The investment spread over the next four years will see the company update its infrastructure to support AI workloads and upskill 840,000 people in AI.

The new allotment of funds to Indonesia, according to the company, builds on Microsoft’s Empower Indonesia initiative launched in February 2021, which also included a plan to launch a data center in the country.

That data center, which has been in the works in Jakarta under the name Indonesia Central, is yet to commence operations, Microsoft’s page detailing global infrastructure for Azure showed.

In contrast, Google launched a data center in the same city as early as June 2020. AWS launched its data center in Jakarta in December 2021.

Microsoft as well as rival hyperscalers have been rapidly expanding its cloud infrastructure to support AI workloads as overall demand for such workloads continues to outstrip supply.

When Microsoft posted its quarterly earnings last week, its CFO Amy Hood said that customers wanted more cloud compute for their AI workloads than the company could supply.

Analysts say that other hyperscalers, such as AWS and Google Cloud, too face the same issue.

Microsoft, according to analysts, has penned down a budget of over $50 billion for 2024 to update and expand its data center infrastructure.

The company recently said it was investing $2.9 billion and $3.16 billion to expand its infrastructure in Japan and the UK.

On the other hand, AWS reportedly is expected to invest $150 billion over 15 years to expand its infrastructure to support AI demand. 

In January this year, the company said it was committing $15.24 billion to expand its cloud infrastructure in Japan by 2027 in order to meet growing customer demand for its cloud services, including generative AI.

Google, too, has been trying to increase its data center footprint with the latest investment coming this week in the form of $3 billion to set up a data center campus in Indiana and expand sites in Virginia.  

In order to train 840,000 people in AI, the company said it would teach students via the AI Teach for Indonesia program and help women build careers in cybersecurity via the Ready4AI&Security program.

The company also said it plans to train developers in Indonesia via its AI Odyssey program, which is expected to help 10,000 Indonesian developers become AI subject matter experts by learning new skills and earning Microsoft credentials.