Microsoft Expands Cloud Region in Johor Bahru to Boost AI Transformation

Microsoft is expanding its cloud region in Johor Bahru, Malaysia, to accelerate AI transformation across Southeast Asia. This strategic move aims to meet the rising demand for trusted cloud services and foster long-term economic growth, while solidifying Malaysia’s leadership in the regional digital economy.

The new cloud region, known as Southeast Asia 3, will complement Microsoft Azure’s global network of over 70 regions, reinforcing the company’s commitment to responsible innovation and digital transformation.

Commitment to Digital Leadership

YB Gobind Singh Deo, Malaysia’s Minister of Digital, highlighted the significance of this collaboration in strengthening Malaysia's position as a leader in digital assets. Judson Althoff, CEO of Microsoft’s Commercial Organization, announced the expansion at the AI Tour in Kuala Lumpur, emphasizing Microsoft’s focus on helping governments, businesses, and communities innovate responsibly.

Sustainability and Community Initiatives

Microsoft’s initiatives in Johor Bahru are guided by its Datacenter Community Pledge, with key projects including:

Skills2Work Datacenter Foundations Program: Training 150 graduates for datacenter careers in partnership with The Asia Foundation and Universiti Teknologi Malaysia.
Social entrepreneurship: Training 200 trainers from 20 social enterprises in collaboration with UNDP Malaysia and BPEN Johor.
Renewable energy: Utilizing biofuel for backup generators to reduce carbon footprint.
Water-efficient cooling: Implementing chip-level cooling to eliminate water evaporation.
Clean water access: Installing rainwater harvesting systems in 42 Johor schools.
Mangrove restoration: Partnering with Belia Prihatin and WWF Malaysia for ecological restoration projects.

Driving Malaysia’s AI Transformation

Microsoft is enabling businesses in Malaysia to evolve into Frontier firms, maximizing impact through AI. Examples include:

AFFIN Group: The first bank in Asia Pacific with a digital core banking platform on Microsoft Azure.
PETRONAS: Embedding AI to enhance decision-making and accelerate innovation.
RHB Bank: Leveraging Azure OpenAI in Microsoft Teams to streamline processes.

Inclusive Skills Development

To ensure inclusive transformation, Microsoft is investing in skilling initiatives through AI for Malaysia’s Future (AIForMYFuture). This national program aims to equip 800,000 Malaysians with AI-related skills by the end of 2025. To date, over 734,000 individuals have been trained across various sectors.

BINA AI Malaysia: Accelerating National AI Innovation

In May, Microsoft launched BINA AI Malaysia to accelerate the nation’s AI transformation. A key initiative under this program is the Microsoft National AI Innovation Center (NAIC), established in partnership with EY, the National AI Office (NAIO), and the PETRONAS Leadership Centre.

One notable project involves Microsoft and EY collaborating with the Employees Provident Fund (EPF) to develop an AI-powered platform for enhancing financial literacy and retirement planning for its 16 million members.

Microsoft’s expansion in Johor Bahru reflects its commitment to driving AI innovation, sustainability, and economic growth in Southeast Asia, positioning Malaysia as a regional leader in the digital economy.