- Google announced a multi-billion-dollar investment in Malaysia
- Microsoft and Alibaba have also shown an interest in building out their cloud footprints there
- Government policies are helping attract cloud providers to the country
Tech giant Google announced that it would invest $2 billion in Malaysia over the next four years to establish a cloud region and its first data center in the country at Elmina Business Park in Greater Kuala Lumpur.
The investment by Google will contribute around $3.2 billion to the country’s GDP and 26,500 jobs by 2030, according to a Google-commissioned evaluation by AlphaBeta. The Google Cloud region in Malaysia will join its 40 regions and 121 zones across the world. The investments also include artificial intelligence (AI) initiatives to strengthen the country’s digital capabilities.
Google’s data center in Malaysia will drive several of its services, including search, Maps and Workspace. On the other hand, the Google Cloud region will be supported by Google Cloud’s “Dedicated Cloud Interconnect locations in Cyberjaya and Kuala Lumpur, which provide direct connections between an organization’s on-premises network and Google Cloud’s global network.”
This follows a collaboration between the Government of Malaysia and Google in November 2023 to create growth opportunities for people and domestic companies using AI and cloud technology.
“This investment builds on our partnership with the Government of Malaysia to advance its 'Cloud First Policy' including best-in-class cybersecurity standards,” said Ruth Porat, President and Chief Investment Officer of Alphabet and Google.
Booming cloud investments
Google’s announcement follows that of rival Microsoft, which previously revealed plans to invest $2.2 billion to boost AI and cloud infrastructure there. As part of its investment, the company will set up an AI Center of Excellence and provide education and training to around 200,000 people in Malaysia.
Last year, Amazon Web Services (AWS) announced that it would be investing around $6 billion by 2037 to set up a cloud region in Malaysia. “This will be our largest investment in Malaysia to date, unleashing further innovation and driving productivity for individuals, governments and businesses, alike,” an AWS press release stated.
A key reason for the surge in cloud investment in Malaysia is favorable government policies coupled with the growing digital transformation of enterprises.
For instance, the Malaysian government’s Cloud First Policy is designed to boost the adoption of cloud in the public sector segment. It is designed to encourage cloud adoption by enterprises and boost the country’s digital economy. These kinds of initiatives appeal to the cloud providers to grow their presence in the country.
Apart from the strong push from the government, Malaysia’s strategic location allows cloud providers to serve both the domestic and growing neighboring markets. In addition, the country is home to booming e-commerce and fintech industries, contributing to the growth of the cloud industry.
Further, the growing adoption of AI has led to an increase in demand for cloud and data centers. And Malaysia's young and digitally savvy population means that data consumption growth is unprecedented. All these factors mean that cloud technology will continue to grow in the country for many years.
According to data from Statista, public cloud revenue in Malaysia is set to grow from $1.8 billion in 2024 to $3.1 billion by 2028. Cloud service providers like Google, Microsoft and AWS want to grab the maximum share of the pie.
Another reason is the growing competition between American and Chinese cloud providers, who would like to outdo each other in the growing Malaysian market. Alibaba Cloud announced recently that it would be establishing more data centers in Malaysia, among other nations.