Microsoft to Invest $1.7 Billion in Indonesia

On Tuesday, April 30, Microsoft announced its intention to invest $1.7 billion in Indonesia over the next four years.

Microsoft to Invest $1.7 Billion in Indonesia

The mentioned funds will be used to build a new cloud and artificial intelligence infrastructure in the specified country. Part of the technology giant’s investment is also intended to train 840,000 Indonesians and support the local developer community.

Also on Tuesday, Microsoft CEO Satya Nadella held a meeting with Indonesian President Joko Widodo. The head of the company said that artificial intelligence is changing the way people live and work everywhere. Separately, he noted that the corresponding tendency of the current stage of global technological development also extends to Indonesia.

Microsoft CEO is planning to visit Malaysia and Thailand later this week.

Satya Nadella also stated that investments in digital infrastructure, skills training, and developer support will help the mentioned country to thrive in a new era. It is likely that in this case, the CEO of Microsoft meant the era of artificial intelligence.

According to Satya Nadella, the revolution in the AI industry will be the next major bend in the curve of GDP growth. In this context, he separately noted that this tendency will affect, among other things, Indonesia, where 10-12% extra growth is expected.

Currently, Satya Nadella is a kind of technological visionary. He urges companies and countries to invest in technology and train the population. Moreover, the CEO of Microsoft focuses on artificial intelligence as a significant economic factor with the potential for widespread impact on states.

The technology giant also announced its intention to work with governments, organizations, and communities to provide machine intelligence skilling opportunities to 2.5 million people living in countries that are members of the Association of Southeast Asian Nations by 2025.

During Satya Nadella’s meeting with Joko Widodo in Jakarta, issues such as artificial intelligence and technological breakthroughs that will provide conditions and opportunities for Indonesia’s progress were discussed. The relevant information was made public by local media.

Currently, the Indonesian government is focused on achieving goals that will shape the economic system and social environment appropriate to the notion of a developed country. Specifically for the movement in the appropriate direction, a concept was formulated, called Golden Indonesia-2045. In this case, it is assumed that the country should become one of the world’s economic centers by 2045. In this context, interaction with companies such as Microsoft is absolutely the right decision, since currently the level of a country’s capabilities largely depends on the level of its technological development. With a high degree of probability, the corresponding correlation will only increase. This assumption is supported by the fact that many analysts characterize artificial intelligence as the main driving force of the future progress of human civilization. Against the background of such realities, a country with a low level of technological development will face limited opportunities, including in the political dimension.

For Microsoft, cooperation with Indonesia is a profitable project, since there is currently an increase in demand for cloud computing services in this country. For Jakarta, access to advanced technologies means additional economic opportunities and productivity opportunities that result from the use of artificial intelligence. The corresponding statement was made by the technology giant.

Indonesia’s Coordinating Minister for Human Development and Culture, Muhadjir Effendy, said the country is currently facing significant difficulties in leveling up the skills of its workforce. Solving the relevant problem is of critical importance in the era of technology and globalization. In this context, the issue of the country’s competitiveness is also becoming more acute.

Currently, there is a growing number of young people in Indonesia with a high level of technical literacy. Generation Z, those born between 1997 and 2012, make up almost 28% of the country’s population, or 75.49 million people. A similar proportion of millennials who were born between 1981 and 1996 is at around 25.9%. The number of representatives of this generation in Indonesia is 69.9 million people.

Microsoft opened its first regional data center in Indonesia in 2021. This facility is designed to meet the data storage needs of local customers. Also about three years ago, the technology giant opened its first data center in Malaysia.

Indonesian Communications Minister Budi Arie Setiadi told reporters that Joko Widodo had offered Microsoft to base new data centers on the resort island of Bali and in the new capital city Nusantara, which is currently under construction in the jungles of Borneo.

It is worth noting that the technology giant is nowadays actively investing in artificial intelligence infrastructure and cloud services around the world. Microsoft sent the corresponding financial injections of $2.9 billion to Japan. The company also invested $1.5 billion in the firm G42, which is based in the UAE and operates in the artificial intelligence industry.

Coordinating Maritime and Investment Affairs Minister of Indonesia Luhut Panjaitan announced the readiness to provide Microsoft with investment incentives. In this context, the desire to offer incentives that surpass support measures in other countries was noted separately. The local government has also announced plans to grant dual citizenship to skilled diasporas as part of efforts to stem the talent drain.

Satya Nadella’s visit to Indonesia took place two weeks after Apple CEO Tim Cook held a meeting with Joko Widodo, during which the construction of a manufacturing facility was discussed.

It is worth noting that Jakarta is currently rapidly strengthening its position as a potential global production center. In the past, large companies focused their attention mainly on India and China as part of their business interaction with Asia. At the same time, amid rising geopolitical tensions, firms are seeking to diversify their production networks. In this context, the most sensitive factor is the significant deterioration of relations between Washington and Beijing. Fearing sanctions from the United States, companies are seeking to move production facilities outside China, but at the same time maintain their presence in Asia.

Microsoft views Asia as a major market and talent pool. Currently, the company is striving for unambiguous leadership in the technology sector, relying on generative artificial intelligence. Moreover, the technology giant has joined forces with OpenAI to challenge Google’s dominance in the sphere of internet search. The company has integrated artificial intelligence into many of its assistants and other functions. The technology giant is spending heavily to meet the growing demand for artificial intelligence services. In the first quarter of the current year, the corresponding capital expenditures reached the $14 billion mark.

It is worth noting that Satya Nadella, who became CEO of Microsoft ten years ago, has repeatedly stated the potential of Southeast Asia in the context of technological development prospects.

As we have reported earlier, Microsoft Releases Quarterly Earnings.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.