Google to invest $2 billion in Malaysia and build data center to capture rising AI demand

Google on Thursday said it will invest $2 billion in Malaysia, with part of the funds going toward building its first data center and cloud region in the country, as the demand for AI and cloud services rises.

"This investment builds on our partnership with the Government of Malaysia to advance its 'Cloud First Policy,' including best-in-class cybersecurity standards," Ruth Porat, president, CFO, and CIO at Alphabet and Google, said in a statement.

Porat added that the investment will be Google's largest yet in Malaysia in its 13 years of operation there.

The data center will power Google's digital services, such as Search, Maps, and Workspace, while the cloud region will provide services to companies and organizations in the public and private sectors. Google also launched two AI literacy programs in the country for students and educators.

These investments and programs are expected to contribute more than $3.2 billion to Malaysia's GDP and support 26,500 jobs by 2030.

The Malaysia cloud region is the latest addition to Google's network of 40 regions and 121 zones in the world, the U.S. tech giant said.

This comes after Microsoft said earlier this month it will invest $2.2 billion in Malaysia to advance new cloud and AI infrastructure. It also announced investments in Indonesia and Thailand this year.

Tech giants like Google and Microsoft have pledged billions of dollars to Southeast Asia to capitalize on the rising demand for AI and cloud computing services.

The AI boom has boosted demand for cloud computing services and data centers, as large amounts of data are required to train AI models and the cloud provides access to vast datasets. Data centers are facilities that contain servers and other infrastructure needed to store data and run applications or services.

"Google's $2 billion investment in Malaysia will significantly advance the digital ambitions outlined in our New Industrial Master Plan 2030," YB Senator Tengku Datuk Seri Utama Zafrul Aziz, minister of investment, trade and industry, said in a press release.

The minister added that Google's investments will enable manufacturing and service-based industries to leverage AI and other advanced technologies so that they can "move up the global chain."