Microsoft boss charms Indonesia with $1.7B AI, cloud injection

Promises to train 850,000 workers and build datacenters

Microsoft CEO Satya Nadella says the company will invest $1.7 billion in expanding its presence and building datacenters in Indonesia.

Nadella announced the investment during his grand tour of Southeast Asia, the same region Apple CEO Tim Cook visited earlier this month. During his trip to the island country, Nadella met Indonesian President Joko Widodo and his cabinet to discuss AI. In a blog post, Microsoft said it plans to "transform the nation into a global economic powerhouse."

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

To support this infrastructure, Microsoft will train 840,000 Indonesians in AI, a big chunk of the 2.5 million AI trainees envisioned across Southeast Asia. It seems plans for the datacenters aren't set in stone yet, but according to Reuters, President Widodo said the small island of Bali just east of Java and the soon-to-be new capital city of Nusantara on the island of Borneo would both be good options.

Indonesia might be appealing to Microsoft for a few reasons. While it is a developing country, it has an emerging tech industry with a 3.1 million member GitHub community, the third largest in the Asia-Pacific region behind India and China. Microsoft predicts the country will be in the top five developer communities in the world by 2026 thanks to its fast growth.

Indonesia also has a sizable population of over 270 million, meaning there's plenty of labor for Microsoft to tap into. That's well behind India and China, but Indonesia is the fourth most populous country in the world, right behind the US at 335 million.

But perhaps most importantly, Indonesia isn't China, a country not on the best terms with the US, where Microsoft is based. Given the mutual sanctions each country has slapped on the other, investing significantly into China, a more obvious candidate than Indonesia, isn't the best idea right now.

The $1.7 billion investment in Indonesia just barely surpasses the $1.5 billion Microsoft set aside for United Arab Emirates-based G42 just a couple of weeks ago. The deal apparently involved the AI company switching away from Chinese hardware to use US tech; a similar rule may be enforced in Indonesia.

The island country is only the first stop on Nadella's tour of Southeast Asia. He also plans on visiting Thailand tomorrow and Malaysia on Thursday. Just like in Indonesia, he will meet with each country's respective leaders, and we possible that Microsoft will announce new investments in the two countries since the CEO likely isn't out there on vacation. ®

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